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Gorvins Residential What is a Transfer of Equity?

What is a Transfer of Equity?

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Do you want to give your partner or children a stake in your property? How about moving in together with a roommate and you want to share the property together?  

If you want to change who has legal ownership of your home without selling your property on the market, you’ll need to go through the transfer of equity process.  

However, if you’re not familiar with how the process works, we’ve got you covered with the key things that you need to consider to complete the paperwork in no time and navigate the transfer of equity smoothly.  

What is equity? 

In simple terms, equity refers to how much of a property you own.  

If you have a mortgage, you can calculate your equity as the difference between the current value of your home and the outstanding amount you owe to pay off your mortgage in full. For instance, if your houses values £250,000 and the amount you still need to pay to complete your mortgage is £150,000, then your transfer is equity is £100,000.  

What is a transfer of equity? 

A transfer of equity is the process where you change the ownership status of your house, whether you’re adding or removing someone from the title deeds of the property.  

For example, a transfer of equity might come in handy when you want to move in together with your partner and co-own the property. On the other hand, in the event of a divorce or separation, you can divide the assets and remove one party as an owner, thus you are becoming the sole owner of the house.  

In addition, you can transfer equity to your children or other family members to become more tax efficient.  

Do you need a solicitor for a transfer of equity? 

Depending on your situation, both you and your partner might need a solicitor to help you navigate the transfer of equity and achieve the desired outcome. 

If one party is buying out from the other one, the one who transfers his equity will need an independent legal representation to make sure the process runs smoothly and ultimately, both partners are satisfied. However, we recommend both parties to use a reliable conveyancing solicitor, no matter the circumstances, to ensure the transferor will get the same monetary value for his equity, while the transferee will be assured that he’s the only one who has a claim on the property moving forward.  

How does the process work? 

The transfer of equity is generally a straightforward process, however, hiring a conveyancer to handle it on your behalf will give you peace of mind that your interests are protected at all times.  

Your solicitor will help guide you through this process, however, we’ve outlined the main steps and what you can expect: 

  • Take a copy of the deeds – The first step is for your solicitor to review the title of your property, as well as check the identities and eligibility of both parties involved. 
  • Prepare the documents – Once your copy is reviewed, the solicitor will prepare the deed documents so they can be signed by both parties. 
  • Let any third parties know – The solicitor has a legal responsibility to notify all third parties involved, such as the mortgage lender or the bank so they can approve the transfer of equity.  
  • Sign the deed – Once the documents are ready to be signed and you got the consent of the lender, the next step is to meet with your solicitor and sign the paperwork. It’s also necessary to have an independent witness when the transfer takes place.   
  • Notify the Land Registry – Depending on the size and value of your property, you will have to pay a fee to the HM Land Registry and let them know about the details of the deed transfer. 

How long does a transfer of equity take? 

It’s generally estimated that a transfer of equity can last anywhere between 4-6 weeks.  

However, there are exceptional circumstances that can lengthen the process, such as a dispute or a divorce that hasn’t been finalised yet in Court.  

What are the costs of a transfer of equity? 

The cost of transferring equity will depend on a variety of factors, such as whether or not you use a solicitor and the value of your property. 

To give you an idea, you should consider the conveyancing fees which usually range between £250 to £500. As mentioned above, the solicitor’s job involves identity checks for both the transferee and the transferor, which can be around £9 per person 

Finally, you should consider the HM Land Registry fees, based on the value of your equity and your current mortgage plan. 

 The HM Land Registry is a non-ministerial department whose role is to register the ownership of land and property across England and Wales.  

What are the tax implications of an equity transfer? 

The tax implications of the equity transfer are based on the nature of the transfer. At the moment, there is no capital gains tax (CGT) being charged on transfers to a spouse or partner.  

For more information on tax planning, we recommend speaking with a professional solicitor that can advise you from the start about the tax implications.  

Can you transfer the equity of a mortgaged property? 

If a mortgage is involved, then the person leaving the property will need to be released from the terms of such an agreement.  

To resolve that, you can either pay off the mortgage in full or even remortgage the house in order to discharge the current mortgage and use the surplus to do a buyout.  

At Gorvins Residential, we specialise in all aspects of the transfer of equity process. Regardless of your needs and budget, we can help you reach the desired outcomes and navigate the transfer of equity process smoothly and hassle-free. 

Get in touch with our friendly team today for more details or if you have any questions.


Testimonials

Through a very stressful process buying a first home, Gorvins were confident and collected. Able to deliver what they promised and kept me updated through the stages. I was glad to have No Stress experience with our conveyancer in amongst the chaos of the rest of it.

Used as recommended by my mortgage advisor for a remortgage.  My case was dealt with by Natasha Sands and she made it complete smoothly and to my satisfaction.  Communication was great and all my questions answered promptly.  Will not hesitate to use again next time.

Fantastic service and for a fair price, special thanks to Joseph Hirst who dealt with my account from start to finish and was always on hand to deal with any queries I had, always got back to me in good time and made the whole process as stress free as possible.

Go with Gorvins, if you want peace of mind!

I recently instructed Gorvins to act on my behalf in the purchase of 5 apartments in Liverpool. I am happy to report that I was more than pleased with their performance.The services provided by the person in charge of the file at Gorvins was most professional, reliable and efficient. In fact she went out of her way to help in aspects which was not her responsibility and as a result the deal went­­ through smoothly.

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Gorvins Residential LLP

Gorvins Residential is the trading name of
Gorvins Residential LLP

Dale House,
Tiviot Dale,
Stockport,
SK1 1TA