Transfer of Equity
Transfer of equity solicitors in Brighouse
At Valerie Holmes Law, we pride ourselves on guiding our clients through the transfer of equity process so that you can move forward with confidence. From our office in Brighouse, we proudly serve the local community, giving them the legal support they need during a time when things can feel overwhelming.
Transferring equity or changing the people on the title of the property can feel daunting. There are many things to consider, including whether you need to pay stamp duty or what to do if there’s a mortgage involved.
What is equity?
Before we get into what transfer of equity is, it’s important to understand the basics. Equity is the percentage of the property that you own. For example, if you have paid off your mortgage, or you have bought the house outright, you have 100% equity. The monetary value of the equity may vary due to the rise and fall in house prices, or whether you add value to the house, but the concept is the same.
Things become a little more complicated when you add a mortgage into the mix.
For example, if you had a house that was £250,000, but it still had £150,000 to pay on the mortgage, the amount of equity will be £100,000, not £250,000. This means that if two people owned the house 50/50 and one was giving up their share of ownership, they will only receive their share of the equity.
Meaning, in the example above, putting all complications to one side, they would be owed £50,000. Obviously, there’s more to it than that, and your best bet would be to get in touch with us, along with a financial adviser, so we can help you with your unique circumstances.
Please note: we cannot give you financial advice.
What is a transfer of equity?
Transfer of equity is when you add or remove someone from the title deed of a property, which will alter the ownership. Unlike when you sell a property, at least one of the original owners will still be on the title. This is why it’s called a transfer of equity rather than selling a property.
There are a few reasons for transferring equity. These include, but are not limited to:
Each transfer of equity case that comes through our doors is dealt with on an individual basis. The complexity of a case depends on many things, including the reason, disagreements between owners, or whether the house has a mortgage.
What if the property has a mortgage?
If the property has a mortgage, which most do, transferring equity is a bit more complicated. A mortgage is a credit agreement, meaning any changes need to be investigated and agreed by the lender.
For example, if someone is being added to the title, the mortgage lender will want to see if they will be able to afford the payments. Similarly, if someone is moving out and leaving the mortgage to be paid by one person, the lender will have to make sure they can afford the repayments before agreeing.
On top of that, if someone is being removed from the title and they were on the mortgage, like any other credit agreement, they can’t simply walk away from the contract. They would have to address the debt that they owe, but there are options for this.
There is also the option of remortgaging a property with a new lender if an agreement can’t be made with the current mortgage lender. Again, all these options are dependent on the reasons behind the change of ownership and the financial position of the parties. The circumstances will usually help people decide which is the best option.
Do I need to pay stamp duty?
Stamp Duty Land Tax (SDLT) is a lump sum of money that you pay to the government when you purchase a property or piece of land that costs over a certain amount. The amount you pay depends on your circumstances and the price of the house or land you buy. But what about when you’re transferring equity, do you still need to pay SDLT?
It depends. There are some circumstances where SDLT doesn’t apply, such as during a divorce or the dissolving of a civil partnership. Primarily, it depends on whether there is any money changing hands. If there is money changing hands during a transfer of equity, this is called consideration value and SDLT may apply to this, depending on the amount of consideration.
The current threshold for SDLT (£125,000), still applies in the case of transfer of equity. So, if the amount of consideration is below that amount, there won’t be any SDLT due to pay.
However, if the consideration does come above this amount, you will be liable to pay SDLT at the relevant rate.
It is also worth noting that if there is a mortgage on the property, this is also classed as consideration for the purposes of SDLT. For example, if you have an outstanding mortgage debt of £150,000.00 and pay £100,000.00 for the other party’s share in the property, SDLT is calculated on £175,000.00 (£75,000.00 half mortgage debt and £100,00.00 lump sum payment).
We know how complicated this all sounds, and you might feel like you’re in over your head. But don’t worry, our experienced team of conveyancers are here to help.
How long does a transfer of equity take?
The length of time a transfer of equity takes depends on the case. If there is no mortgage, things should be straightforward and take a few weeks. When a mortgage is involved, this will prolong the process, as you will need to get written consent from your mortgage lender.
When you go with us for your transfer of equity, we will make sure we act promptly and diligently to keep on top of the legal work. We can make sure we’re chasing people when necessary and complete the transfer in as timely a manner as possible. Although we can only go as quickly as other people involved in the process, such as the mortgage lender.
The costs included in transferring equity
Although the concept of transferring equity sounds simple, like all processes in property law, there’s more to it than that. There’s a lot involved and with that comes costs. Some of the costs include, but are not limited to:
- Solicitor fees
- Land registry fees
- Stamp duty land tax (if applicable)
- Mortgage lender fees in some cases
As each case is unique, the costs involved vary. There could also be costs incurred for things like identity checks and obtaining documents, but this is dependent on the fees of the professionals involved and the complexity of the process.
We understand that this can sound like a lot, and we want to make sure the process goes as smoothly as possible when it comes to the legal work. At Valerie Holmes Law, we’re here for you.
How we can help
As we’ve discussed, there are many reasons that someone might deem transferring equity appropriate. Whatever it is, we’re here to help. We will deal with your case sensitively and efficiently.
At Valerie Holmes Law, it’s our passion to serve the local community and make sure that they are kept up to date every step of the way.
Here’s what you can expect from us:
So you know how much your conveyancing will cost from start to finish.
Our Friendly team
A friendly team that responds quickly to calls and emails.
Proactivity
We will chase the other side and push for progress. No delays will ever come from our side.
Regular updates
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