What is the ‘equity’ of your property?
The ‘equity’ in a property is the total value of the property with any outstanding mortgage subtracted.
For example, if your home costs £250,000 and you still owe £150,000 on your mortgage, the equity is £100,000. If you co-own or want to co-own a property, you split the equity value, not the overall property value.
Why transfer equity?
The transfer of equity process essentially adds or removes someone to or from the title deeds of the property.
You might want to do this for several different reasons. For instance:
- Your living arrangements are changing – maybe your spouse or partner is moving in, or you’re getting divorced and one of you is moving out
- You want to gift some of the equity to a family member, for example to your children over the age of 18
- You’ve received a court order for the transfer of equity
- A financial advisor has recommended transferring your share
What is involved in the transfer of equity process?
When you instruct us to transfer equity on your behalf we will go through the following steps:
- We will request an official copy of your property’s title documentation. Your property’s title documentation is held by the Land Registry, which safeguards land and property ownership. If your property is unregistered, we will require the title deeds from you in order to check the title.
- After we receive your property’s title documentation we will review the same and prepare the ‘transfer of equity deed’. We will also clarify whether this transfer of equity is for consideration or not. If consideration is involved, we will need to assess whether stamp duty is payable. Consideration can also be in the form of an existing debt i.e. existing mortgage. If you are removing a party from the title, they will need separate representation.
- If you have an outstanding mortgage on the property, you will need to check with the lender to see if they are happy to proceed with the transfer of equity. They might require a remortgage application, therefore it is best to check with your existing lender first. The mortgage lender needs to agree to the transfer of equity, as the person added to the property title becomes responsible for the mortgage as well. If the property ownership is being transferred to one person, they will become fully responsible for the mortgage on their own. If the lender insists on a new mortgage, we will have to re-quote you fees for a transfer and re-mortgage transaction.
- Once everything is in order, we will invite you to the office to sign the documents.
- Once all documents are signed, we then register the transfer of equity deed with the Land Registry.
We will always keep you fully informed throughout the transfer of equity process and will be available to answer any questions you may have.
Stamp Duty Land Tax (SDLT)
In England you are required to pay Stamp Duty Land Tax when you buy a residential property worth over a certain amount. Stamp Duty Land Tax needs to be paid on any residential property – leasehold or freehold – whether it’s bought outright or with a mortgage. In Wales the equivalent tax is called LTT Land Transaction Tax.
During a transfer of equity, a share of the property ownership is transferred to a new party, which is why SDLT may need to be paid again, even if it was during the initial purchase.
For properties with a transfer sum over £40,000, you’ll likely need to pay Stamp Duty Land Tax.
When you get in touch, our solicitors can explain exactly what SDLT may be payable, as the rules are complex.
How long does it take to transfer equity?
A straight-forward transfer of equity generally takes between two and four weeks. However, each transaction is different, and in certain cases it could take longer.
When you instruct us to handle your transfer of equity, we will look at all the factors involved and advise you on how long we expect the process to take in your circumstances.
Our solicitors will always ensure that your transfer of equity is handled swiftly and without any unnecessary delays.
How our conveyancing team can help you
With our expert advice and guidance your transfer of equity will be dealt with professionally and in a timely manner.
Our conveyancing solicitors will guide you through the transfer of equity process with care and ease, whilst making sure everything moves on as quickly as possible.
To get started, get in touch. We will provide you with your tailored free no-obligation quote and explain what we will be able to do for you.
Starting the process couldn’t be more simple!
- Contact us Get in touch however suits you best and arrange a consulation with one of our solicitors
- Meet an expert You’ll meet the expert solicitor assigned to your case and discuss all the necessary details
- Authorise Once we’ve got all the details of your case and you’re happy to proceed, just give us the go-ahead
- We get to work It’s time for us to get to work! We’ll set up your file on our system and get to work right away
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