Transfer of Equity Solicitors

Written by Nicola Ryan Reviewed by Carol O'Leary

23rd Jan 2023 (Last updated on 18th Apr 2024) 15 minute read

Do Both Parties Need a Solicitor for Transfer of Equity?

Why Would I Need to Transfer Equity?

Hiring a solicitor is legally required for the transferee (the party receiving the transferred equity). The transferor (the party giving the transferred equity) does not legally have to hire a solicitor. However, it is highly recommended. In most cases, all parties tend to have representation due to the legal paperwork involved.

A specialist transfer of equity solicitor will be able to guide you through the process. Some firms have an expert panel of solicitors or a conveyancing team that solely works on transfer of equity cases.

There are a variety of reasons why homeowners proceed with a transfer of equity. You can choose to transfer full or part ownership of a property.

Here are some of the most common cases:

Adding another person to the title

This usually occurs when marrying, co-habiting, or entering a civil partnership. Adding someone such as a new spouse or partner to the title gives them financial interest in your home. If you are transferring equity to an existing partner, one of the current owners must be listed at the time of the transfer.

When adding someone to the title with unequal shares, you should get a Deed of Trust. This is a legal document that ensures your equity is protected.

Removing someone from the title

When splitting or divorcing from a former partner, you may want to remove them from the title deeds and separate your finances. A specialist transfer of equity solicitor will be able to assist with complicated or acrimonious cases.

Going from joint to single ownership

For properties purchased with a friend, you may wish to buy the other person out and acquire full ownership of the property. Transferring a jointly owned property to sole ownership can be complex. However, your solicitor will liaise with the parties involved and guide you through the process.

Gifting full or part ownership

You may want to gift full or part ownership of the property to a family member or child for inheritance or tax reasons. Gifting your children can help to reduce the amount of inheritance tax that will be owed. However, this is not guaranteed and it’s always best to discuss this with your conveyancing team.

Conveyancing Process for Transfer of Equity

Do I Need a Solicitor for Transfer of Equity?

Below are the steps in the transfer of equity legal process:

1. Appoint a Transfer of Equity Solicitor

If someone is joining the title, both parties can be represented by the same solicitor. If someone is leaving the title, the transferor and transferee need separate representation.

Your solicitor will then obtain an official copy of the title deed for the property from the Land Registry. One of the primary documents your solicitor will complete is a TR1 form. This document transfers ownership of a property from one party to another.

Your solicitor will require identification and any relevant documents on the property. For example, if the property is leasehold, your solicitor will need a copy of the lease. You will need to hire a leasehold solicitor to do this.

2. Review the Mortgage

Your solicitor will check any outstanding mortgages or other property charges. If there is a mortgage on the property, you’ll need the existing mortgage lender's consent to go ahead with the transfer. This is because all parties listed on the legal title are equally liable for the mortgage.

The same applies when removing someone from the property deeds and becoming the sole owner. The mortgage lender will want to be sure you can afford the mortgage on your own. If they don’t agree to the transfer, you’ll need to repay the mortgage cost outright.

3. Completion

When the transaction is complete, your solicitor will arrange the transfer of any funds between parties. They will also file the relevant documentation with the Land Registry.

A qualified professional is required for transfer of equity cases. Legally, the party who currently holds the deed does not legally require a solicitor. However, in most cases, both parties tend to have legal representation. This is due to the amount of paperwork involved.

If the current holder does not have conveyancing experience, it can be an overwhelming experience.

When Do I Need a Transfer of Equity?

What Does a Solicitor Do in a Transfer of Equity?

You can choose to transfer full or part ownership of a property. Here are some of the most common cases:

Adding Another Person to the Title

Adding a new partner or spouse to the title gives them a financial interest in your home. This typically occurs when marrying or entering into a civil partnership.

If you are transferring equity to an existing partner, one of the existing owners must be listed at the time of the transfer. This is especially important in instances of unequal shares and if you are transferring equity in joint names.

Removing Someone From the Title

When splitting or divorcing from a former partner, you may want to remove them from the transfer deeds and separate your finances. Both parties will need to negotiate how much will need to be paid to buy out the remaining equity.

Going From Joint to Single Ownership

Transferring a jointly owned property to sole ownership can be complex. This is because additional changes will need to be made to the existing deed. However, your solicitor will liaise with the parties involved and guide you through the process.

Gifting Full or Part Ownership

You may want to gift full or part ownership of the property to a family member or child for inheritance or tax reasons.

Gifting ownership to your children can help to reduce the amount of inheritance tax that will be owed and is common when tax planning. Bear in mind that there may be tax implications if the transfer falls through.

Use as a Deposit

Those looking to invest in a second property may sell part of their equity to use as a deposit. Other people may use the money to make improvements to the property in a bid to raise its value. This can be beneficial considering moving house.

There are various tasks your solicitor will conduct when working on your behalf. They will provide you with legal advice and carry out legal aspects of the transaction. This includes the following:

There are various tasks your solicitor will conduct when working on your behalf. They will provide you with legal advice and carry out legal aspects of the transaction. This includes the following:

• Drafting the transfer deed
• Pay Stamp Duty Land Tax (SDLT) and Capital Gains Tax on your behalf
• Liaising with the existing mortgage lender
• Researching current mortgages on the property

Read our guide on What is a Conveyancer and What Do They Do?

Conveyancing Process for Transfer of Equity

Transfer of Equity Costs and Fees

You'll need to hire a conveyancing solicitor to transfer equity to take care of the legal side. Below are the steps in the transfer of equity legal process:

Transferring equity takes between one to two months on average to complete. However, there is a chance of delays that can prolong the process.

1. Appoint a Solicitor

If someone will be joining your title – for example, adding a new partner – both parties can be represented by the same solicitor. But if someone is leaving the title deeds – such as an ex-partner – each party will need separate legal representation. All parties will need to provide identification to their solicitor.

Find out How to Find a Conveyancer or Solicitor

2. Review the title deeds

Your solicitor will obtain an official copy of the title deed of a property from the Land Registry. They will check any outstanding mortgage or any other charges on the property.

3. Is there a mortgage?

If there is a mortgage on the property, you’ll need the consent of the mortgage lender to go ahead with the transfer. Adding someone to the title will make them equally liable for the mortgage so the lender will want to carry out an affordability assessment.

The same applies if you are removing someone from the property deeds and becoming the sole owner. The mortgage lender will want to be sure you can afford the mortgage on your own. It may want to change the terms of the mortgage at this point.

If your current lender doesn’t agree to the transfer, you’ll need to repay the mortgage before pursuing the transfer. This can be done with cash (if you have sufficient funds) or by remortgaging to another lender in the name of the new owner or owners of the property.

Things are more straightforward if there isn’t a mortgage on the property. This is because you don’t need the lender’s consent to proceed.

4. Is the property leasehold?

If the property is leasehold, your solicitor will also need to obtain a copy of the lease. Your leasehold solicitor will also need to obtain consent from the freeholder for the change of ownership – there may be a fee for this.

5. Complete the TR1 form

A TR1 form is the transfer of equity form used to transfer the legal ownership of a property from one party or parties to another party or parties. Your solicitor will fill in the form, outlining the transferor(s) (current owners), and the transferee(s) (new owners).

Each party will need to sign the TR1 form in the presence of a witness, and your solicitor will file it with the Land Registry.

6. Completion

When the transaction is complete, your solicitor will arrange the transfer of any funds between parties. Outgoing parties will need to complete and sign a Land Registry ID1 form to confirm their identity, in the presence of their solicitor.

Your solicitor will file the relevant documentation with the Land Registry. The average Land Registry fee is £438, depending on the value of the property.

Transfer of equity costs an average of £5,298 plus 1%-5%, depending on the circumstances. Many factors can impact the total cost including whether you have a mortgage.

Here is a breakdown of the average cost*:

How Do I Transfer Ownership if There is a Mortgage on the Property?

How Much Do Solicitors Charge for Transfer of Equity?

When you transfer equity, the new owners will be responsible for the mortgage payments. The remaining owners will have to apply for a new mortgage offer.

They will have to pass the mortgage lender’s eligibility and affordability checks like you need to when you buy a home. The lender will also check you have residency rights in the UK and are within the appropriate age range as it is a credit agreement.

If you plan to own the property solely, you will need to ensure that you earn a high enough income to pass the affordability checks. Many people remortgage for a higher amount than their existing mortgage. They then use the surplus cash to pay off the other person.

You may also have to pay off some of the loans with cash savings or remortgage to a different lender, depending on your circumstances.

The average transfer of equity cost is £5,298 including VAT. Some solicitors will provide the quote with VAT while others may not. This cost includes various fees including the solicitor’s transfer of equity legal fee of £540.

Therefore, it’s best to double-check with your solicitor beforehand to avoid any surprise costs.

Use our Conveyancing Fees Calculator to find a full estimated cost that includes any transfer of equity fees.

Do I Have to Pay Stamp Duty for Transfer of Equity?

How Long Does a Transfer of Equity Take?

Stamp Duty Land Tax may be payable depending on your circumstance. For example, if you are giving and receiving something of monetary value, you will likely have to pay SDLT or Capital Gains Tax. This is known as a “chargeable consideration”.

You will have to pay SDLT when:

1. Transferring equity to a spouse or partner
2. Buying out another party
3. Receive a property with an outstanding mortgage

You will not have to pay SDLT if:

1. The value of the transfer is under £125,000
2. Receive a property with no mortgage
3. Equity transfers are a result of divorce or legal separation and the transfer has either been agreed upon or court ordered

It’s best to discuss SDLT payments with your solicitor beforehand to avoid any unexpected costs.

Transferring equity takes between one and two months on average to complete. However, there is a chance of delays that can prolong proceedings.

If there’s no mortgage on the property, the transfer of property ownership can be completed in a matter of days or a couple of weeks. You can speed up the process by arranging for both parties to sign the transfer papers at the same time.

It normally takes longer to transfer equity if there’s a mortgage to sort out. For example, if you need to remortgage to buy out a partner the timescale will be dependent on the remortgage process and can be up to six to eight weeks.

Complex cases such as separations or divorces can also slow things down, especially if one party doesn’t consent to the transfer. Make sure you consult with your solicitor to avoid any legal implications.

Do I Have to Pay Stamp Duty for Transfer of Equity?

How Long Does a Transfer of Equity Take?

Stamp Duty Land Tax (SDLT) may be payable and the amount differs between property transactions. This tax is paid in England and Northern Ireland. In Scotland, it is called Land and Buildings Transaction Tax (LBTT) and in Wales, it is Land Transaction Tax (LTT).

For example, if you are giving and receiving something of monetary value, you will likely have to pay this or Capital Gains Tax. This is known as a “chargeable consideration”.

You will have to pay SDLT when:

• Transferring equity to a spouse or partner
• Buying out another party
• Receive a property with an outstanding mortgage

You will not have to pay SDLT if:

• The value of the transfer is under £125,000
• Receive a property with no mortgage
• Equity transfers are a result of divorce, legal separation or court order

It’s best to discuss SDLT payments with your solicitor beforehand to avoid any unexpected costs. You will then receive a Stamp Duty certificate.

If there’s no mortgage on the property, the transfer of property ownership can be completed in a matter of days or a couple of weeks. You can speed up the process by arranging for both parties to sign the transfer papers at the same time.

It normally takes longer to transfer equity if there’s a mortgage to sort out. For example, if you need to remortgage to buy out a partner the timescale will be dependent on the remortgage process and can be up to six to eight weeks.

Complex cases such as separations or divorces can also slow things down, especially if one party doesn’t consent to the transfer. You’ll need legal advice in this situation.

How Do I Transfer Ownership if There is a Mortgage on the Property?

Finding a Conveyancer

When you transfer equity, the new owners will be responsible for the mortgage payments. So, the mortgage lender will want to be sure the mortgage is affordable to the new owners and that they meet the lender’s criteria.

The new owners will have to pass the mortgage lender’s eligibility and affordability checks in the same way you need to when you buy a home. The lender will also check you have residency rights in the UK and are within the appropriate age range.

If you plan to solely own the property, you will need to ensure that you earn a high enough income to pass the mortgage lender’s affordability checks. Many people remortgage for a higher amount than their existing mortgage. They then use the surplus cash to pay off the other person.

You may also have to pay off some of the loans with cash savings or remortgage to a different lender, depending on your circumstance.

At Compare My Move, we can connect you with up to 6 licensed conveyancers to assist you with your transfer of equity. Fill out the comparison form to compare conveyancing quotes and save up to 70% on your fees.

All our conveyancing partners must provide proof that they are regulated by one of the following regulatory bodies:

• Solicitors Regulation Authority (SRA)
• Council for Licensed Conveyancers (CLC)
• Law Society of Scotland (LSS)
• Law Society of Northern Ireland (LSNI)
• Chartered Institute of Legal Executives (CILEX)

Another way to find a solicitor is to ask friends and family for recommendations. They can provide a first-hand account of their experience. Regardless of how you find your conveyancer, always check reviews online. This ensures you find a reputable company that is right for your needs.

Finding a Conveyancer

At Compare My Move, we can connect you with up to 6 licensed conveyancers to assist you with your transfer of equity. Fill out the comparison form to compare quotes and save on your conveyancing fees.