Equity transfer explained
In 2020, there were 103,592 divorces granted in England and Wales.
Circumstances change. We get that. But what happens when there’s property involved?
Transferring equity can be a simple process but unfortunately, that’s often not the case. Add in messy breakups, disagreements, mortgages and taxes, and it can soon start to feel like a legal minefield.
But don’t worry. Help is at hand.
Here GD Property Solicitors offer an overview of equity transfer. Outlining what it is, why you might need it and the key things you need to be aware of. For more detailed help and advice with equity transfer, get in touch with the team or access your free quote now.
What is equity?
Equity is the term used to describe the percentage you own of a property and its value.
For example, a home worth £250,000 with £100,000 left on the mortgage, will mean you have £150,000 in equity.
If your name is on the title deeds, then the equity value is attributed to you and any other names listed.
So what is the transfer of equity?
In simple terms ‘transfer of equity’ is adding or removing names from the title deeds of a property.
The property isn’t being sold – and at least one original owner will remain the same – but it’s the process of adding or removing other owners.
Reasons for equity transfer
There are a number of reasons why you might need to transfer equity. Common motives include:
· Divorce or separation
Married or not, if you’re separating from a long-term partner, you’ll need to divide up more than just the CD collection!
It may be that you both agree to sell up and move on, keeping things relatively simple. Although, if the breakup involves children, it’s more likely that one parent will take over ownership of the home to allow the family to continue living there and minimise disruption.
· A new relationship
Moving in with a new partner? Then it might be worth discussing getting your name on the deeds. No one wants to spend years contributing to the finances of a property only to have nothing to show for it should the relationship not work out.
· Moving on from joint ownership
With property prices rocketing and the first rung of the property ladder feeling like an increasingly bigger step, it’s no wonder many first-time buyers now join forces with friends and family.
This is a great way to break into the property market but not a situation that you’re likely to envisage lasting forever. So when the time’s right to move on, you’ll need a transfer of equity.
· Tax efficiency
Transferring property equity into someone else’s name – perhaps another member of the family or a child – can prove to be more tax efficient. The property is treated as a gift reducing the tax that needs to be paid.
How do you transfer equity?
So you now understand why you may need to transfer the equity of your property, but just how do you go about it?
The basic key steps of the process are outlined below:
Step 1: Review the deeds
To begin the process, your solicitor will need to review an official copy of the title deeds.
Step 2: Prepare the transfer documents
Next, a transfer deed document will need to be prepared ready for signing.
Step 3: Inform third parties
Mortgage providers, banks, building societies – any third parties involved will need to agree to the transfer and provide written evidence of this consent.
Step 4: Sign the new deeds
Once new title deeds have been prepared, they will need to be signed by an independent witness.
Step 5: Notify the Land Registry
The final step in the process is to register the deed transfer with the Land Registry. There is a charge for this – usually anything from £50 – £1000 – depending on property value.
How long will a transfer of equity take?
Every transaction is unique, so it can be difficult to pinpoint exactly how long it will take to complete a transfer of equity. As a guide, you can usually expect a simple transfer to take anywhere from 2-6 weeks. However, if there are disagreements and complications, the process can take much longer.
How much does a transfer of equity cost?
Depending on your individual circumstances, there can be several fees associated with the transfer of equity – such as search fees, certificate charges etc. However, the key expenses everyone must pay are:
- Solicitor’s legal fees
- The Land Registry fee
There’s no escaping the fact that solicitors’ fees are a significant part of the expense, so it’s crucial to work with a conveyancing firm offering a reliable, efficient and competitively priced service.
Get expert help with equity transfer
If you’re considering transferring the equity in your home, now is the time to speak to the team at GD Legal.
Highly experienced, we can guide you through the legalities, ensuring the process moves as quickly and efficiently as possible.
To speak to a member of the team in more detail about equity transfer, and the service we provide, get in touch today.