Transfer of Equity
A Transfer of Equity is where a jointly owned property is sold or transferred to one of the other owners or when more or one persons are added to the ownership of a property by a single owner. Equity is the usual legal term for how much of the property you own which would be its value minus any outstanding mortgage.
Transfer of Equity – What You Need to Know
A transfer of equity can happen for several reasons – new partners moving in together, separation or divorce, tax planning, or other personal circumstances. Whatever the situation, the legal process and requirements can vary depending on whether a mortgage is involved and the purpose of the transfer.
Costs of a Transfer of Equity
The cost of a transfer of equity can vary depending on the complexity of the matter, whether a mortgage needs to be changed, and whether Stamp Duty Land Tax applies. At Fishers Solicitors, our fees typically start from £995 + VAT, with additional charges depending on specific requirements and third-party costs.
Types of Transfer of Equity
1. Transfer of Equity Involving a Mortgage
If a property is to be transferred from one to two names for example where two parties come together and decide to live together, if there is a mortgage on the property already, the mortgage lender i.e. the Bank or Building Society have to provide consent and that lending institution will need to be contacted first before any legal work is done for that consent to be provided. They would then write to Fishers directly with their instructions and the legal process can begin.
Where a property is owned jointly with a mortgage, then again the Bank or Building Society need to be made aware and consent obtained. Usual credit checks for the intended sole owner would be carried out to check affordability. Sometimes at this point a re-mortgage could also be considered i.e. the party staying in legal ownership pf the property decides to move to a new mortgage lender.
2. Transfer of Equity Following Separation
Often the reason for a transfer of equity results from a divorce or separation if your relationship has broken down. Some couples chose to remain joint owners and sell the property whilst others may choose to remove one party so that the other can keep the house to live in, perhaps with children.
When it’s time to move on and you start a new relationship, you might want to consider adding your new partner onto the title to the property through a transfer of equity.
3. Transfer of Equity for Tax Purposes
Another reason for a transfer of equity may be because of tax efficiency. A property transfer could be treated as a gift minimising the tax owed when transferring it. If you are considering transferring equity for tax reasons it is highly recommended you seek advice from your Accountant or expert Tax Solicitor before taking any action.
Transfer of Equity FAQs
Do I need Legal Representation for a Transfer of Equity?
How long does a Transfer of Equity Take?
Transfer of Equity and Separation
Transfer of Equity for Tax purposes
Do I have to pay Stamp Duty Land Tax (SDLT) on a Transfer of Equity?
What does a Solicitor have do for a Transfer of Equity to take place?
How much does it cost to do a Transfer of Equity?
Moving to a jointly owned property
When a new party is added onto a property title, the matter of joint ownership then has to be considered. Everyone’s circumstances are different and there is no one size fits all; you could elect to hold as Joint Tenants or Tenants in Common in equal or unequal shares. Following on from that, a Declaration of Trust maybe appropriate and you should also consider whether this change in property ownership means you need to consider a changes to your Will or whether a Co-Habitation Agreement is also necessary.
FISHERS SOLICITORS
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