The case for scrapping stamp duty

IN RECENT YEARS many rich-world politicians have at last woken up to the blight of expensive housing. Theresa May, Britain’s prime minister, describes pricey houses as “the biggest domestic policy challenge of our generation”. Justin Trudeau, Canada’s prime minister, has promised a “robust, comprehensive, life-changing” impact on the housing market. Australia’s new prime minister has fretted that youngsters are putting off parenthood while they save up for homes. Recognition is growing that rapid house-price inflation has caused intergenerational inequity, destabilised finance and constrained economic growth.If only the rhetoric was matched by action. Dysfunctional government policies, which have coincided with lower real interest rates, have pushed prices up (see ). The fundamental mistake is excessive regulation of house-building in and around successful cities. But a second senseless distortion makes things worse: taxes on property transactions.