The slab structure was completely abolished, with purchasers paying the marginal tax rate on the relevant elements of the purchase price. 98% of buyers will pay the same or less tax; only those purchasing homes costing between £937,500 and £1,000,000 or more than £1,125,000 are set to pay more (see chart below).
The new marginal SDLT should help to remove the distortions caused by the slab structure, which led to a clustering of transactions. The greatest impact is likely to be for homeowners looking to buy property just above £250,000, who could save around £5,000 in tax (or c2% of the purchase price).
Based on 2013/14 transactions data from the Land Registry, nearly 590,000 purchasers in England & Wales would benefit under the new regime, with an average benefit of c£1,600. Using this data Nationwide are also able to examine the impact of these changes at a parliamentary constituency and government office region (GOR) level. The average SDLT paid is expected to be lower in 97% of constituencies under the new system.
The benefits tend to be greater in areas where average house prices are higher and thus a higher proportion of transactions are liable for stamp duty. Nationwide estimates that 86% of transactions in London and the South East government office regions would benefit from the changes, compared with around 50% across the North East, North West, and Yorkshire and The Humber.
The London region sees the highest proportion of transactions benefiting, but also the highest proportion paying more stamp duty. This reflects that house prices in the capital are substantially higher than elsewhere, meaning almost all transactions in the capital are liable for stamp duty.
Only a very small proportion of purchasers in England & Wales will pay more stamp duty under the new system and the majority of these are in London. Nonetheless, most people buying property in London will benefit from the changes (an estimated 100,000 would benefit based on 2013/14 transactions), with only those buying properties above £937,500 facing a higher tax bill (an estimated 8,400 would pay more tax in London).
The Carshalton and Wallington parliamentary constituency in Sutton has the highest proportion of transactions benefiting (based on 2013/14 data), with an estimated 95% seeing a reduction in the level of SDLT payable.
In contrast, Kensington has the lowest proportion of beneficiaries, as a result of very high house prices. In fact, this is the only constituency in the country where the majority of purchasers would be worse off under the new system, with 51% expected to pay more.
