What is a transfer of equity?
You can transfer equity in a property or land by adding someone to, or removing them from, ownership of that property, without selling it. Equity is the value left in the property after any mortgages or loans are paid off.
Why would I transfer equity in my property?
- You may move in with someone who already owns a property and you want to own part of it
- Someone might move into a property you own and you want them to own part of it
- You get married or enter into a civil partnership and both of you want your name on the title
- You may be separating and wish to transfer equity to one or the other
- You may wish to transfer equity to your family
- Tax reasons
- Inheritance planning
How do I transfer equity?
Our property experts have dealt with many transfers of equity and will guide you through the complexities, making sure that you understand the process. The transfer will be affected by whether or not you have a mortgage and whether any money is changing hands.
Without a mortgage
If there is no mortgage on the property and no money will be changing hands, equity can be transferred straight away and we can deal with that fairly quickly. The Land Registry will normally register the new owners of the property within a few weeks depending on their workload at that time.
It is advisable that you consider how the property is to be owned when transferring equity. Please click here to see our pages on owning property jointly
With a mortgage
You’ll need permission from the lender if you want to transfer equity in a property that has a mortgage attached to it and you want to stay with the same lender. You will need to apply formally to them for their consent and they may want to be a party to the documentation. They will usually charge a fee for agreeing to this and, if no money is changing hands, they may require that we take out indemnity insurance on your behalf, and at your cost, to protect them in case of potential bankruptcy in the future. We can obtain a quote for you if required.
However, you could also apply for a new mortgage with a new lender in both of your names. This will not require the consent of your existing lender.
This process will take longer than a transfer of equity with no mortgage.
Money changing hands
It may be that someone is being removed from ownership, for example in the case of a divorce. In this case, the new sole owner may be making a payment to the person being removed and his/her name may need to be removed from the mortgage.
Again this is a longer process than a simple transfer of equity with no mortgage and we can carry out this procedure for you.
What payments will be involved?
Our fees will be based on the type and complexity of the transfer involved. We’ll give you a fixed cost for our work, along with the cost of any other actions we have to take, once we’ve discussed your case fully with you.
Stamp duty land tax (SDLT)
You might have to pay SDLT when adding someone to or removing them from the property title, depending on whether there’s a mortgage or any cash changes hands.
We’ll advise you as to whether you’ll have to pay SDLT when we’ve looked at your individual case.
Search indemnity insurance
You may have to pay a search indemnity insurance if there’s a mortgage involved in the property. It’s intended to protect the lender from financial loss if the value of the property is affected by anything that might have been revealed in searches that would have been carried out on a normal purchase.
The cost of the insurance will depend on the value of the property and the value of the mortgage. It is a one off insurance, not an annual policy.
Land Registry fee
You’ll have to pay a fee to the Land Registry for changing ownership of the property. The cost will depend on the value of the property and the value of the mortgage.
If you are transferring equity in a leasehold property, the freeholder might charge an administration fee.
Our property experts have helped many people successfully transfer equity in their property and can help you. Please contact us to discuss your matter or to make an appointment to see one of our lawyers.
Don’t forget that Graysons is accredited with the Law Society’s Conveyancing Quality standard, so you can rest assured that our expertise and quality of service is second to none.