Transfer of equity is the name for the process that is used to add or remove someone from the ownership of a property. The ‘equity’ is the share of the property that a person owns.

So, if someone is given a share of a property that someone else owns, then that equity is being transferred to them. If two people own a property together and one of them gives up their share, then they would be transferring their equity to the other owner.

Transfers of equity can be used in various different situations. One common example is where someone owns a property and their partner or spouse moves in with them and it has been agreed that the partner/spouse will contribute to the mortgage in exchange for a share of the property. Another common scenario is where a couple who own a property separate and one of them buys out the other’s share.

Whatever the situation, a legal transfer of equity is required to make the new ownership arrangement legally enforceable.

The exact process required for a transfer of equity will depend on the circumstances, but the basic procedure involves several key steps:

• Agreeing exactly what transfer will be taking place.
• Having the property valued, so you know how much the equity being transferred is worth.
• Hiring a solicitor to handle the legal aspects of the transfer for you.
• Your solicitor will review the property’s title deeds to confirm the current ownership, the details of any mortgage or other loans taken out against the property and any other issues that could impact the transaction.
• Your solicitor will then prepare a legal document called a ‘transfer deed’ or ‘deed of transfer’ setting out important details such as: The current ownership of the property
• What the ownership will be after the transfer has taken place
• Any money that is changing hands with respect to the transfer
• Any additional relevant information, such as rights of way or restrictive covenants on the property
• Your solicitor will notify your mortgage provider (if you have one) of the change in ownership of the property – typically, the mortgage provider’s consent will be required for the transfer.
• Your solicitor will work out if any Stamp Duty Land Tax (SDLT) needs to be paid as part of the transaction.
• If Stamp Duty must be paid, then your solicitor will handle payment of this to HMRC
• If any money is changing hands for the transfer, then your solicitor will handle the payment.
• In some circumstances, it is possible that Capital Gains Tax (CGT) could apply to a transfer e.g. if a parent had an investment property that they were transferring to their children. If this is the case, your solicitor will inform you and handle payment of CGT for you.
• Your solicitor will submit the transfer deed to HM Land Registry to confirm the transfer of equity has taken place.

There is no set timeline for a transfer of equity, but they are normally relatively straightforward transactions that can be completed in around 4-6 weeks.

Where a transfer may take longer is if there is a mortgage on the property and you therefore need to wait for the mortgage lender to provide written confirmation that they consent to the transfer.

Your transfer of equity solicitor can give you a realistic estimate of how long the process will take at the outset and they should keep you informed of progress, including any potential delays.

The price for a transfer of equity will depend on the details of the specific transaction. Most solicitors will offer fixed fee transfer of equity conveyancing, giving you certainty over the costs involved.

To see how much your transfer of equity might cost, please use our simple conveyancing quote request form.

Stamp Duty may apply to a transfer of equity if money is being paid or something else of value is being given in exchange for a share of a property.

Situations where Stamp Duty may apply to a transfer of equity include where:
• You get married/enter a civil partnership and transfer a share of a property you own to your spouse/partner (or they to you)
• You jointly own a property and the other owner buys you out (or vice versa)
• You are given a property as a gift where there is an outstanding mortgage to pay
• A property is transferred to or from a company

Stamp Duty will normally not apply to a transfer of equity where:
• The value of any money or other assets transferred falls below the Stamp Duty threshold
• The property is gifted and there is no mortgage on it
• The transfer is the result of a divorce or separation and the transfer has been agreed as part of a financial settlement or has been ordered by a court

It is always important to consult an expert transfer of equity solicitor when planning a transfer to make sure you fully understand any tax implications ahead of time.