Research and analysis
Responsiveness of commercial transactions to Stamp Duty Land Tax
This report evaluates the impact of Stamp Duty Land Tax (SDLT) on commercial transactions.
Applies to England and Northern Ireland
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This paper evaluates the impact of Stamp Duty Land Tax (SDLT) on commercial transactions. It uses the change in tax, as a result of the policy at Budget 2016 which moved commercial SDLT from a slab basis to a slice basis, to estimate the responsiveness of commercial transactions to a change in SDLT.
Our preferred regression estimates that a 1% change in the Effective Tax Rate (tax paid ÷ value of transaction) leads to a 11.7% change in commercial transactions. This is higher than the equivalent semi-elasticities for residential property of 5% to 7% and much higher than the previous commercial semi-elasticities of 5.4%.