This paper studies how unexpected changes in real estate transfer taxes (RETT) affect housing and consumption across generations. Local governments rely on RETT, higher rates can deter transactions and intensify lock-in among elderly home owners. Using the German Socio-Economic Panel (GSOEP) and local market indices, I estimate that a 1 pp increase in RETT reduces downsizing by \(0.5\) pp, while a \(1\) pp rise in local purchase prices increases it by \(0.7\) pp. A quantitative life-cycle model replicating German home ownership patterns (2006–2019) shows that financing lower RETT via income taxes benefits retirees but reduces long-run consumption by \(-0.54%\). Financing via a property tax lowers house prices, increases younger households’ consumption, and raises long-run consumption by \(0.16%\), with a smaller decline in home ownership.