Transfer of equity
A transfer of equity occurs when you, as the owner of a property, add or remove other people to the legal register alongside yourself.
Why would you be considering it? Possibly following a divorce settlement, or to add your partner when you’re in an established relationship. We’ve also advised on many cases where parents want to make a gift to their adult children by adding them to the property.
Whatever your situation, we can only advise you, not both parties; they’ll need to take legal advice independently to ensure that there’s no conflict of interest.
It’s a simple enough process in itself, but if your property has a mortgage secured against it, you do need your lender’s consent to the transfer. You don’t have to apply for a new mortgage, but the lender may either issue a new mortgage offer or simply give their consent to the transfer.
If you add someone to the property, they will have to undergo reference and credit checks; if a person is being removed, the lender will want to see proof that you can still afford the repayments.
We can advise you whether there may be stamp duty implications if a payment is made to a person being taken off the property, or by a person coming on. There could also be implications for inheritance tax planning if, for example, the property is being gifted to a child by parents.
For more information on transferring equity and to start a conversation on how we can help you please contact Liz Cashinella, Conveyancing Executive, Residential Property.