The basis on which stamp duty is charged is being changed in a move that will benefit most purchasers of property.

The old system applied a single rate of stamp duty based on the value of the purchase. This 'single slab' system led to some creative apportionments of the purchase price between the property itself (subject to stamp duty) and the contents (not subject to stamp duty), as an adjustment of just a few pounds could lead to a reduction of thousands of pounds in the total cost to the buyer.

Under the new system, stamp duty will be payable in 'slices'. There will be no tax payable on the first £125,000 of the purchase price, 2 per cent payable on the next £125,000 and so on. The top rate of stamp duty (12 per cent) will apply to the slice of consideration above £1.5 million.

The move will see a fall in the stamp duty payable for the large majority of property sales, but will create considerably higher liabilities on the purchases of the highest-priced properties.

The higher charges will be felt particularly by purchasers of properties in the more affluent areas of London, where many of the 'top end' properties are bought by foreigners.

Non-resident purchasers will also be hit by the proposed changes in Capital Gains Tax on the surpluses on sale of residential properties. These limit the ability to elect which one of two (or more) properties is to be treated as the 'principal private residence' of the taxpayer and thus eligible for private residence relief. This election will no longer be available unless the property is occupied for at least 90 nights a year if the property owner is not resident in the country where the property is situated.