Impacts of stamp duty on residential mobility and travel behaviour
Creators: name: JAHED SHIRAN, Solmaz
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 330403
subject: Housing markets, development and management
classificationCode: 330409
subject: Transport planning
classificationCode: 490108
subject: Operations research

description: Understanding interactions of travel and residential behaviour is imperative for formulating urban policies and planning urban infrastructure. Residential mobility and location choice shape urban structure and may contribute to negative externalities generated by travel such as congestion, air pollution, urban decline, and urban sprawl.

While there is considerable research on the interactions of residential mobility and travel, the consequences of impediments to residential mobility for travel behaviour are not explored adequately. The literature commonly reports that stamp duty reduces residential mobility and constrains the choice of location and creates lock-in effects for homeowners, yet, the implication of stamp duty on travel behaviour is not well explored. Research on residential mobility, stamp duty and travel behaviour has tended to examine these issues in isolation. This research aims to link these by exploring the implications of stamp duty on patterns of both residential mobility and travel behaviour of individuals. The overarching research questions addressed in this thesis examines, if stamp duty leads to a decrease in residential mobility and constrains residential location choice, does this in turn negatively impact travel behaviour? Further, would reducing or eliminating stamp duty improve travel behaviour and mitigate negative externalities such as congestion?
 
The research questions are addressed in two phases. The first phase explores the interactions of residential mobility and travel behaviour, applying regression analysis and descriptive statistics to both cross sectional and longitudinal data. The reasons for residential moves and specifically the role of travel and accessibility as criteria for location choice for Melbourne residents is explored. Further, travel behaviour of individuals before and after relocation, and comparisons between behaviours of house movers and non-movers is investigated. Various aspects of the travel consequences of residential relocation, such as tenure transitions and direction of moves in the process of residential mobility and the consequent travel behaviour is explored. The results indicated the importance of transport factors in residential location choice and that employed individuals reduce their commute distance and time after a residential move. Further, tenure transitions from renting to owning and vice versa found to be significant for changes in commute time and distance. House movers are also found to own fewer cars and use public and active transport more often compared to non-movers. A further longitudinal analysis using Mobility Biographies approach was performed. The results again confirmed the significant role of residential relocations in reducing travel times in Melbourne. I also found that people with longer commute times have higher probability to relocate and reduce their travel time within the next year. These findings suggest that residential relocation is associated with an improvement in travel behaviour.

The second phase of this study focuses on the effects of stamp duty on residential mobility and subsequently on commuting. I explored the likelihood that homeowners subject to higher stamp duty get locked in, and face longer travel as a result. Binomial and multinomial fixed effect logistic regression models were employed for the analysis of this part. Results indicated that stamp duty significantly reduces residential mobility, especially for ownership to ownership moves. To explore the lock-in effect of stamp duty on travel behaviour, I applied a conditional logit model with which joint decisions about moving and commuting are combined in three ways: a) not moving and short commuting, b) moving, and c) not moving, but long commuting. The results confirmed the hypothesis that higher stamp duty rates increase the likelihood of choosing not to move and thus spend longer times commuting. Further, commuting times were positively correlated with increases in stamp duty rates.
 
The findings of this thesis create a case for reducing or removing stamp duty as a means for increasing residential mobility and colocation of housing and services, thus reducing the negative externalities of long travel such as congestion. This research therefore adds a new perspective through which policy makers can consider the broader policy implications of stamp duty on travel behaviour. Removing stamp duty and replacing it with more efficient taxing, e.g. land tax, would result in more mobile households. Thus, people can change their residence more easily and move closer to locations with better access to their place of employment and other services. This in turn would result in reduced travel time and distance and hence overall reduction in traffic congestion.