But what if a sale contract has already exchanged before that date, can the lower rate of 4% still be claimed?
5% will apply only apply to transactions by reference to their "effective date" not the date the contract is exchanged. The "effective date" is usually the date of legal Completion but technically it is when the sale contract is "substantially performed".
The Inland Revenue's website states that "substantial performance" means inter alia payment of at least 90% of the price or occupation of the property.
Could a purchaser therefore avoid paying the additional 1% by taking up post-exchange occupation before 6 April 2011, thereby substantially performing the contract and triggering the liability to pay SDLT before the rate goes up - even if completion occurs after 6 April 2011?
The answer depends on the circumstances but in relation to the sale of a freehold or the sale of an existing lease, pre-6 April 2011 early substantial performance of a purchase by way of actual occupation will enable the purchaser to save 1% SDLT. However, simply claiming that the purchaser has moved in without actually taking up occupation will not be sufficient. Of course this ignores the practical situation of the Seller's own occupation, and whether the Seller is actually willing to allow pre-completion occupation.
Could a purchaser therefore avoid paying the additional 1% by paying over 100% of the money (fully completing) before 6 April 2011, but the Seller rents the Property back as they may need more time to actually move out. Yes, but the Buyer needs to make sure that this does not breach the terms of any mortgage that they used to complete their purchase - with the result that the Lender calls in the loan or converts it to a buy-to-let at much higher interest, so early consultation with your lender is now critical .
The above options may not apply to many, but residential purchasers are urged to take immediate legal advice by speaking to their Conveyancer about them, if they want to avoid the increase.