Transfer of Equity: Is It Possible To Add A Name To My Property?

What Doeas Transfer Of Equity Mean?

The title deeds are an important legal document that records the names of all owners of a property and confirms the transfer of ownership from the seller to the buyer every time it is sold. Sometimes, it is necessary to add a name to the title deeds, for example, if a sole owner enters a new relationship or someone wishes to ‘buy out’ an ex-partner. In this situation, there is a legal process to follow to make the change, known as a transfer of equity.

What Is A Transfer Of Equity?

Equity is a legal word that describes the proportion of a property that you own. For example, if your home is worth £400,000 and your outstanding mortgage is £250,000, then the equity is the difference – in this case, £150,000. As you gradually pay off your mortgage, the amount of equity that you own increases.

A transfer of equity is the process of adding or removing a name from the title deeds of the property, in effect changing its ownership. When a couple has divorced and one party remains in the property, they effectively buy out the other. If a new partner is moving into a property, the equity is divided so that both parties become joint owners.

Both persons (the one being added to the title deeds, and the current owner) should be represented by a residential conveyancing solicitor.

What If There Is A Mortgage On The Property?

If the property is mortgaged, the transfer of ownership cannot take place without the mortgage company’s agreement. Once the transfer is completed, the new joint owner will usually be legally liable for the mortgage (the mortgage lender will have carried out their usual financial assessments, such as income and credit checks, in advance, and will make a formal mortgage offer in the usual way). In this situation, a property conveyancing solicitor will be instructed to follow any guidelines set out by the lender.

Can I Transfer Equity If The Property Is Leasehold?

If a property is registered as a leasehold, the freeholder or managing agent may be required to approve the transfer of equity. A residential conveyancing solicitor will be able to assist in this situation.

Is Stamp Duty Due When A Transfer Of Equity Is Completed?

Many people do not realise that adding a name to the title deeds through a transfer of equity may result in Stamp Duty Land Tax (SDLT). The minimum threshold for SDLT is currently £250,000, with increasing increments resulting in higher charges. When planning to add a name to the title deeds of a property, it is important to budget carefully and ensure that your solicitor has access to your correct financial information.

How Long Does A Transfer Of Equity Take?

The process is usually completed within 4 to 6 weeks.

Contact Astle Paterson For Professional Conveyancing Advice

At Astle Paterson, we provide expert advice and conveyancing for homeowners in and around Burton on Trent wishing to add or remove a name from the title deeds of their property.

To find out more, please call us on 01283 531366 or click here to send us an enquiry.

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