The process of transferring equity involves removing and/or adding an individual to the title deeds of a property, thereby removing or installing them as an official owner. This process is markedly different from the sales process because at least one of the property’s original owners will remain the same.
Why Might a Transfer of Equity Occur?
There are numerous reasons why you may wish to complete an equity transfer, including:
– Separation or Divorce
If you experience a relationship breakdown with a partner you co-own a property with, you will need to decide how this asset will be dealt with. Some couples opt to retain joint ownership in order to sell, but if one party wants to keep the house an equity transfer is often the best option.
– New Relationship
A transfer of equity can be used to add a new partner to the deeds of a property you already own.
– Joint Ownership Resolution
As house prices have increased, there have been many more instances of friends or family members purchasing a property together to successfully get on to the property ladder. If one party wishes to buy out the other parties at any point, an equity transfer will need to take place.
– Tax Reasons
If you are looking to improve the efficiency of your tax arrangements, it is possible to transfer equity to your children or other members of your family. Property can be classed as a gift, which will minimise the amount of tax owed during the transfer process. It is imperative to access independent legal advice before transferring equity for this reason to ensure that it is the best option for you.
What Does the Equity Transfer Process Involve?
1. When the equity transfer decision has been made, you will need to find a conveyancing solicitor to guide you through the process.
2. Your solicitor will begin by obtaining a copy of the title deeds to determine whether there are any restrictions that could impact or complicate the transfer process.
3. After checking the identities of each person involved, your solicitor will create the transfer deed document. This will need to be signed by all parties.
4. All third parties must be notified of this process, as any relevant lenders, building societies or banks will need to give their written permission.
5. After the paperwork has been signed and independently witnessed, the Land Registry will need to be informed. There is a fee associated with this step, and you can see a complete list of the potential costs that you might incur during the equity transfer process here: https://www.samconveyancing.co.uk/news/conveyancing/transfer-of-equity-process-3894.
Depending on your circumstances, the process will take between four and six weeks to complete.