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Transfer of equity is the process of removing or adding someone to a property’s title deeds. This may be needed for a variety of reasons, including divorce or separation, moving on to a new relationship, resolving joint ownership issues, or for tax efficiency. If you are considering it, you may have many questions. So here we take a look at four of the most common queries.
What is the transfer of equity process?
The process will involve checks of the title deeds, identity verification and the preparation of transfer documents. Third parties, such as mortgage lenders will have to consent to the transfer. The deed will need to be signed and witnessed and the Land registry notified and paid for the changes. More details of this can be found on the Land Registry website.
A transfer of equity solicitor can help you through the process. More detail of what is involved is available at https://www.samconveyancing.co.uk/news/conveyancing/transfer-of-equity-process-3894.
How long will a transfer of equity take?
How long a transfer will take will depend on the complexity of the case. A simple transfer may only take between four and six weeks, but this can vary hugely on a case-by-case basis. A mortgage on the property will elongate the process, as will wider legal disputes, such as in the case of some divorce proceedings.
Can the transfer of equity involve a mortgaged property?
Yes, but the lender must provide written consent to anyone wanting to be accepted into or released from a loan agreement. Anyone added to a title will become liable for any mortgage and lenders will need to be sure that they will be able to afford this and that anyone remaining on the mortgage can make the repayments. The lender will also want to be satisfied that anyone leaving a mortgage has resolved their debt.
Will I need to pay stamp duty when transferring equity?
It may be necessary to pay SDLT or Stamp Duty Land Tax when you transfer equity. Your marital status and what kind of transfer it is will be among the determining factors.
HMRC guidelines say that it may be necessary to pay stamp duty if an interest in property or land is transferred in exchange for something of monetary value. This value is not just cash and can include mortgage value.
Other factors will also be considered, however. For example, stamp duty may be payable if the transfer goes with a marriage, civil partnership, or a cohabiting relationship but not in the case of the dissolving of a civil partnership, legal separation, or divorce. You can find out more at https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property.
