What is a transfer of equity?
A 'transfer of equity' is when an existing owner of a property (or land) adds or removes one or more people to the title (ownership) of the property, or transfers full ownership of the property to another person.
You might, for example, wish to transfer equity if you decide to:
- Sell your share in a property
- Buy out an ex-partner after a separation
- Buy out a joint owner
- Adding a new partner or spouse to the deeds of your home
- Gift a property (or share in a property) to a child or other family member
You may also need to transfer equity to reduce the value of your estate when estate planning for Inheritance Tax (IHT).
Will I need a solicitor when transferring equity?
Yes. If you are transferring equity on a mortgaged home, you will need a solicitor to carry out the legal work needed to complete the transfer.
If there is no mortgage then you don't necessarily need to use a conveyancing solicitor. The process is complex, however, and there could be tax implications if you make an error. Transfer of equity legal fees are inexpensive, so most people prefer to use a solicitor.
What is the legal process of transferring equity?
Your solicitor will work closely with all parties involved in the legal transfer, including the mortgage lender (if there is an existing mortgage).
The legal process will include:
- Obtaining and reviewing the title deeds
- Transfer deeds and other legal documents are drafted and completed
- Third parties, including mortgage lenders, banks, building societies and landlords, are notified and relevant consents obtained
- The new deeds are signed and witnessed
- The new interests in the property are registered at HM Land Registry (HMLR)
What if there is a mortgage on the property?
If there is an existing mortgage, the lender will need to consent to the transfer of equity.
You want to add someone to the deeds if, for example, you are getting married, entering into a civil partnership or moving in with a partner or friend. In this case the person being added to the deeds will become equally liable for the mortgage.
If you are removing someone from the deeds, the mortgage lender will need to confirm that the remaining owners will be able to pay the mortgage.
If the mortgage lender will not consent to the transfer, the mortgage will need to be paid off, either in cash or via a remortgage.
Your solicitor will need to be on the lender's approved panel of conveyancing solicitors. Our panel of solicitors are approved by over 100 banks and building societies. You will be assigned a conveyancing solicitor who can act for your existing mortgage lender.
What if I am remortgaging at the same time?
You may be remortgaging the property when transferring equity. The legal work for your remortgage can be completed at the same time as the legal work for your transfer of equity.
Do I pay Stamp Duty Land Tax (SDLT) on a transfer of equity?
When transferring equity held in property or land, Stamp Duty Land Tax (SDLT) is payable on the 'chargeable consideration'.
When buying a property, chargeable consideration is the amount of money a buyer pays for the property.
However, when equity in a property is transferred from one person to another, chargeable consideration is the amount of debt transferred or taken on.
SDLT would, therefore, normally be payable on the amount of the mortgage being taken on by the new owner.
If you are transferring equity in a second property, the Second Home Rate may apply.
How much Stamp Duty will I have to pay?
|Chargeable Consideration||SDLT % Rate||Second Home SDLT % Rate|
|Up to £125,000||0%||3%|
|The next £125,001 - £250,000||2%||5%|
|The next £250,001 - £925,000||5%||8%|
|The next £925,001 - £1.5m||10%||13%|
|The amount over £1.5m||12%||15%|
For more detail see:
How is a property valued when transferring equity?
The value of your equity in a property would be calculated as follows:
(Current Market Value - Outstanding Mortgage) x % Share in the Property
In some circumstances, you will need to get the property professionally valued as part of the transfer process.
If you are separating from a partner, for example, you would probably need to obtain a valuation. If you need to pay Capital Gains Tax (CGT) you will also need to professionally assess the property's value.
You would normally obtain an independent property valuation through a chartered surveyor.
We can arrange an independent valuation with a RICS chartered Surveyor as part of the process.
How long does the transfer of equity process take?
The conveyancing for a transfer of equity usually takes around 4 weeks.
If there is an existing mortgage, or if you are remortgaging the property at the same time, the process can take longer - depending on how responsive the lender is.
Leasehold transfers can take longer if, for instance, the freeholder (landlord) is unresponsive. If you intend to transfer equity on a leasehold property, we recommend that you notify the freeholder as early in the process as possible. Otherwise, your solicitor will prioritise notifying your freeholder at the start of the process.
How much does transfer of equity conveyancing cost?
There is usually less legal work involved when transferring equity in a property than there is with a property sale or purchase. There are fewer third-party costs (disbursements). Property searches, for example, are not needed when transferring equity.
Who pays the legal fees on a transfer of equity?
It depends. If you are getting married, moving in with a partner, separating or divorcing, both parties are effectively clients as mutual consent must be obtained.
The legal costs and fees would typically be paid by both parties, but the legal fees could be paid by an individual party if preferred.
If the property is being gifted to a child or family member, for example, the donor would usually pay the fees.
What's included in my transfer of equity conveyancing quote?
The price we quote is the price you pay to complete the legal work for your transfer of equity. All of the legal fees are included in our 'All-inclusive' fee guarantee.
Third party costs (disbursements), such as HMLR land registration fees, are recharged to you at cost.
Our fixed fee service means there are no hidden additional extras.
What do other conveyacning solicitors charge?
The following is a table of typical fees charged by solicitors when transferring equity in a property:
|Fee/Disbursement||Typical solicitor cost|
|Conveyancing fee||£250 - £900|
|TT Fee||£15 - £35|
|Bankruptcy search||£2 - £12|
|Official copies||£3 - £18|
|ID verification||£8 - £20|
|Searches or search indemnity fee||£30 - £350|
|HM Land Registry fee||£20 - £135|
Your next step
Whether you are gifting a property to a child, getting married or separating, or transferring equity for any other reason, we can help you find an expert conveyancing solicitor. Even if you are just looking for advice, we can help.
If you are also planning to remortgage as part of the transfer process, the remortgage legal work can be completed at the same time as your transfer of equity.
- Transfer of equity experts
- No Completion, No Fee Guarantee
- CQS-accredited panel solicitors
- Fixed fees - All-inclusive Quote
All-inclusive quote from £384 inc VAT