Owning property often comes with big life changes, and sometimes those changes mean adjusting who legally owns your home. Whether you’re adding a partner to the title, removing an ex-spouse, or gifting property to family, the process is known as a transfer of equity. It’s not as complex as buying or selling a home, but it still needs to be done correctly to avoid issues later.
If you’re wondering when, why, and how to approach it, this guide will walk you through the essentials so you feel confident moving forward.
Understanding Transfer of Equity
A transfer of equity means legally changing the names on the property’s title deeds while at least one of the original owners remains. Unlike a sale, you’re not transferring full ownership, but you are altering the share of ownership.
Common reasons include adding your partner, removing a joint owner after separation, or passing on ownership to children. Since legal ownership is at stake, solicitors usually handle the process to ensure the paperwork is accurate and accepted by the Land Registry.
The Transfer Of Equity Process
The transfer of equity process is usually more straightforward than a full property transaction, yet there are still several steps involved. A solicitor prepares the Land Registry TR1 Form and ensures all parties sign. If there’s a mortgage, lender consent is essential before the transfer goes ahead.
For leasehold properties, the freeholder might also need to approve the change, which can slow things down. Once everything’s in place, the solicitor submits the documents to the Land Registry, and the update is recorded.
Why It’s Done And What To Expect
People complete transfers for different reasons. For some, it’s about sharing ownership with a partner who’s contributing financially. For others, it’s part of divorce proceedings or gifting property as part of future planning. In each case, the reasons shape the process.
For example, transfers linked to divorce usually don’t trigger stamp duty, while those involving mortgage debt or cash payments might. That’s why understanding the motivation behind the transfer is as important as the paperwork itself.
How Long Does It Take?
Most transfers take between three to eight weeks to complete. The speed depends on how quickly the lender consents, whether there’s a remortgage, and if the property is leasehold. Once documents are with the Land Registry, it can take months before the official record is updated, though you’ll usually have legal confirmation much sooner.
Delays often happen when disputes arise over equity value or when freeholders take time to confirm leasehold notices.
Tax Considerations You Can’t Ignore
Equity transfers can have tax implications. Stamp Duty Land Tax (SDLT) is payable if money changes hands or mortgage debt is taken on, as it counts as consideration. For instance, if you’re adding someone to a property with an existing mortgage, their share of that debt is factored into stamp duty calculations.
On the other hand, transfers ordered by courts during divorce or civil partnership dissolution usually don’t attract SDLT. Capital Gains Tax may apply if you transfer a second home, and inheritance tax rules can also come into play when gifting property.
Costs And Fees
Solicitors usually charge between £450 and £1,000, depending on whether the property has a mortgage or is leasehold. You’ll also pay Land Registry fees, plus possible charges for ID verification and freeholder notices.
While you might be tempted to attempt a DIY transfer, it often carries risks such as errors on Land Registry forms or missed tax filings. A solicitor helps reduce those risks and ensures the transfer is legally binding.
Final Thoughts On Doing It Right
A transfer of equity can feel straightforward on the surface, yet it carries legal and financial weight. The key is knowing why you’re doing it, understanding the tax and cost implications, and making sure all consents are in place before moving forward.
By handling it carefully, you’ll protect both your property rights and your financial position. If you approach it step by step with the right support, you’ll complete the transfer smoothly and with peace of mind.
