How much does it cost to transfer equity in a property?

A transfer of equity is carried out when an existing owner of a property either adds or removes one or more people to the title of the property. A transfer can happen for several reasons, such as a couple getting married or divorced or when a property is gifted to a child.

The cost of transferring equity will depend on various factors. -solicitors/transfer-of-equity-quotes">Get an instant transfer of equity quote here.

What does a transfer of equity cost?

ItemAmount
Solicitor fees£250 to £500 + VAT
Identity checks£9 per party
TT Fees (if applicable)£20 - £40
HM Land Registry fees£20 - £455
Search Indemnity insurance£50 - £150
Leasehold (freeholder consent)£0 - £250
Stamp Duty (if applicable)0% to 15% of value

Solicitor fees

Legal fees are usually relatively inexpensive, ranging from £250 to £500. In some circumstances, both the transferor (the person giving a share in the property or being removed from the deeds) and the transferee (the person getting a share in the property or the new owner) will need separate legal representation so there will be additional legal fees.

If you are intending to remortgage at the same time, the solicitor will usually carry out the legal work for the remortgage at the same time. This will normally add £200 - £500 to the cost.

Who pays the legal fees on a transfer of equity?

The answer to this really depends on the circumstances. With a marriage, separation or divorce, both parties are effectively clients as mutual consent must be obtained. The legal fees would typically be paid by both parties but there is no reason why they cannot be paid by an individual party. If the property is being gifted to a child, for example, the donor would usually pay the fees.

See also: Do both parties need a solicitor when transferring equity?

Identity checks

The solicitor will need to confirm the identity of both the transferor and transferee. This can usually be completed electronically at a cost of £9 per person.

TT fees

If the new owner is paying for the equity, the money will be transferred from the transferor to the transferee. The solicitor will charge a TT fee for the safe electronic transfer of the money. TT fees range from £20 - £40.

HM Land Registry fees

The new owner will need to be registered on the title at HM Land Registry (HMLR).

If the new owner is paying for the equity, the fee payable to HMLR is based on the ‘value’ of the equity. The value will be calculated as follows:

  • Entire property being transferred - Market value of the property minus the outstanding mortgage amount.
  • Share in the property being transferred - If, for example, the ownership is split 50:50, the value will be 50% of the full market value. Similarly, if the new owner will own 30% of the property, the value will be 30% of the full market value.
  • Share in the property with an outstanding mortgage - If there is an outstanding mortgage, the property value is calculated by first subtracting the outstanding mortgage from the property value. The remaining amount is then apportioned in accordance with the equity split. For example, if Mark is transferring 30% of a property worth £500,000 with an outstanding more of £200,000 to Emma, the value is calculated as follows:

    Value = 30% of (£500,000 - £200,000) = £90,000.

If the new owner is paying for the equity

HMLR Scale 1 fees will apply:

Equity ValueHMLR Scale 1 Registration Fee
0 – £80,000£20
£80,001 – £100,000£40
£100,001 – £200,000£95
£200,001 – £500,000£135
£500,001 – £1,000,000£270
£1,000,001 and over£455

If the new owner is not paying for the equity

HMLR Scale 1 fees will apply:

Equity ValueHMLR Scale 2 Registration Fee
0 – £100,000£20
£100,001 – £200,000£30
£200,001 – £500,000£40
£500,001 – £1,000,000£60
£1,000,001 and over£125

Search indemnity insurance

If there is an outstanding mortgage on the property, the existing lender may require search indemnity searches in lieu of a full set of property searches. Search indemnity insurance protects the lender from anything that property conveyancing searches might have discovered that could affect the value of the property.

Search indemnity insurance will depend on the value of the property and varies from provider to provider. The policy will normally cost between £50 and £150.

Leasehold (freeholder consent)

If the property is leasehold, the freeholder or managing agent may charge a fee to consent to the transfer of equity. Fees will typically range from £0 - £250.

Stamp Duty Land Tax

In some circumstances, Stamp Duty Land Tax (SDLT) will be payable to HMRC. For more information on how SDLT is calculated, see: Do I pay Stamp Duty Land Tax (SDLT) on a transfer of equity?

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.

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Chris Salmon, Director

Author:
Chris Salmon, Director