The Transfer of Equity Process Explained

A Transfer of Equity occurs when an existing owner of a property either adds or removes one or more people to the title (ownership) of the property. This can happen for several reasons, such as when a couple gets married or separate.

The following guide explains the transfer of equity process.

Transfer of Equity Process

See also:

What does 'Equity' mean?

‘Equity’ is the value of a property minus the amount of the mortgage outstanding.

For example;

If a property has a value £500,000 and the outstanding mortgage (the amount required to pay the mortgage off) is £400,000, then you have £100,000 equity in the property.

Why would I need to transfer equity?

A transfer of equity may be necessary in the following circumstances:

  • Adding a partner or spouse to the title
  • When separating from a partner or spouse
  • Transferring equity from one partner or spouse to another
  • Gifting ownership or part ownership to a family member or child
  • Transferring equity for tax purposes
  • Taking a name off the mortgage

Key steps in the transfer of equity process:

Step Comment
Instruct a solicitor Your solicitor will work closely with you and your lender to complete the transfer
Verify ID Solicitors are required to verify the identification of clients before they can act for them.
Review the Title Deeds The solicitor will obtain and review a copy of the property's title from the Land Registry
Prepare transfer deed documents The solicitor will complete the necessary legal documents for the transfer
Sign the transfer deed The transfer documents are signed and witnessed
Register the deed transfer The new owner/s are registered at HM Land Registry

What if there is a mortgage on the property?

If you are relinquishing equity and there is a mortgage in place, you will need to be released from the terms and conditions of the mortgage.

If you are adding someone to the title, that person will become jointly liable for the mortgage.

The solicitor will seek the consent of the lender to carry out the transfer.

What if the lender will not agree to the transfer of equity?

The lender may not approve of the transfer for any number of reasons e.g. the new owner does not meet the lender's lending criteria. In these circumstances, the mortgage will need to be paid off before the transfer can occur. This could be by way of a cash payment or remortgage with another lender.

What if the property is leasehold?

If the equity being transferred is held in a leasehold property, the following steps will also be carried out:

Step Comment
Obtain a copy of the lease The conveyancing solicitor will also obtain and review a copy of the lease
Contact the freeholder/landlord The solicitor will write to the freeholder to confirm whether a notice fee is payable to register the change of owner
Notify the freeholder/landlord The freeholder will be notified of the change of ownership, and a notice fee (essentially an administration fee) will need to be paid (if applicable)
Obtain consent from the freeholder This may be required to register change of ownership at the Land Registry

Do I have to pay stamp duty?

When transferring equity you may have to pay Stamp Duty (SDLT)*:

Circumstances SDLT Payable Comment

No mortgage


Stamp Duty is only payable on the mortgaged part of the property. If the property is wholly owned then no stamp duty is payable

Getting married, entering into a civil partnership or moving in together


SDLT is payable if the equity being transferred is greater than the SDLT threshold

The transfer is a gift


If there is no consideration, SDLT does not usually apply

If one person takes on a larger share


If a property is jointly owned and the equity is split equally, no SDLT will be payable. However, if one person takes on a larger share, SDLT maybe payable. If the larger share is given as a gift then there is no consideration and SDLT will not be payable.

Transfer of outstanding mortgage


If one person takes over another person’s ownership of a property, the property is mortgaged, and the consideration is above the threshold, SDLT will be payable.

Divorcing/dissolving civil partnership


No SDLT payable. Also applies if the marriage is annulled or a legal separation is entered into.

You are left the property in a will


No SDLT is payable, even if you take on the mortgage on the property from the date te person died.


*As with all tax matters, SDLT can be complicated. You should speak to a conveyancing solicitor to confirm your position with respect to SDLT. To speak to a solicitor, without obligation, call 0800 612 7456.

See also: Do I Pay Stamp Duty Land Tax (SDLT) on a Transfer of Equity?

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To get a quote call 0800 612 7456 or click here to get a transfer of equity quote online.

Helen Goddard, Legal researcher

About the author

Helen is an award-winning legal researcher and author. She is an experienced court litigation report proofreader and has written extensively on legal matters.

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