The reforms changed the previous SDLT system from a slab structure, where buyers paid the same rate of tax on the whole property price, into a slice system similar to the income tax structure. Buyers now pay the tax rate on the part of the property which falls within each specific band.
The new system, coupled with a slowdown in sales of premium properties that fall into the higher bands of SDLT, has cost the Treasury £662m over the calendar year, London estate agent Chestertons has revealed.
Nick Barnes, head of research at Chestertons, said the changes to Stamp Duty had made a huge impact on homes valued between £1.5m and £5m. He said this has had a knock-on effect across the market, especially in London.
Guy Gittins, executive director at Chestertons, said: “Buyer habits have also changed significantly over the past year or so, many of those looking to move up the ladder into somewhere bigger are simply not prepared to pay a six-figure tax bill to do so.”
He said City workers, who traditionally invest in prime properties, have been biding their time or looking elsewhere for better value. He added that overseas buyers have also been changing tactics to side-step the increase in property taxes.
“UK investors too are switching tack, looking for smaller properties or negotiating price reductions to offset the increased tax bill on their purchases,” he said.