A transfer of equity could involve transferring ownership of a property to a family member, removing a person from the title, or making changes to joint ownership. The most common reasons for transfer of equity include divorce proceedings, a new relationship, resolving joint ownership, or for tax efficiency purposes. Lots of questions can arise, so let’s take a look at four of the most common.
What does the process involve?
The transfer of equity process involves copying the title deeds, preparing the transfer document, notifying the third parties, signing the deed, and notifying HM Land Registry.
What if a mortgage is in place?
If a mortgage or credit agreement is in place, anyone leaving or entering into the agreement will need to be either accepted or released by the lender.
How long does a transfer of equity take?
Each transaction is different, but the average process takes between four and six weeks. This may be longer if there is a mortgage involved.
Does stamp duty apply?
Stamp duty may be payable when part or all of an interest in land or property is transferred in return for something of monetary value, which is known as a chargeable consideration. The rules used to work out how much stamp duty is due are complex, so you should seek professional advice.
Transfer of equity solicitors
Transferring equity can be a complex legal process to navigate, so it is imperative that a specialist transfer of equity solicitor is instructed to guide you. For further information on the legal process and how a transfer of equity solicitor can help, contact a specialist such as parachutelaw.co.uk/transfer-of-equity-solicitor.
Some transfer of equity solicitors will undertake a transfer of equity on a fixed fee basis, meaning you know exactly where you stand in terms of costs.
What affects the cost of a transfer of equity
A transfer of equity moves part or all of the ownership of a property from one person to another, and everyone involved is advised to take independent legal advice. It is generally cheaper than buying a property, because the solicitor does not need to carry out the same title checks on restrictions and covenants.
The final cost depends on several factors, including the mortgage lender, any restrictions on the title, the type of ownership, the tenure and the value of the property. On top of the solicitor’s own fees for preparing the paperwork and carrying out any research and solvency checks, there are disbursements, the out of pocket expenses such as Land Registry fees, which should be agreed when you instruct a solicitor.
Stamp Duty Land Tax may also be due if an interest in the property is transferred in exchange for something of monetary value. Some solicitors offer fixed fee services for removing a party from the title deeds, which can be a quick and cost-effective option.