Finance and ownership
Transfer of equity
Adding someone to the title of your home or removing an owner, with lender consent and any property tax worked out on what is paid or taken on.
Every cost on its own line: the law firm's legal fee, VAT, the searches and other third-party costs, and any property tax. Your quote opens as soon as you send the form.
Everyone on the title before and after the change will need to sign, so make sure all of them agree to the transfer before you instruct.
A transfer of equity changes the legal ownership of your home without a sale. Common reasons are adding a partner after moving in together or marrying, removing a former partner after a separation, or one family member buying out another's share. The property stays the same; only the names on the title, and often the mortgage, change.
This service is for freehold homes. The instant quote asks what share is moving, any money being paid and the mortgage owed, and from that estimates the property tax on the chargeable consideration, which is the money paid plus the share of the mortgage the new owner takes on. A leasehold property has its own page, leasehold transfer of equity.
If you go ahead, Keyfolio introduces you to a regulated law firm that deals with your lender, prepares the transfer and registers the change at HM Land Registry.
What is involved
A transfer of equity usually follows these steps:
- Instructions: confirming who will own the property afterwards, in what shares, and whether any money is changing hands.
- Identity and independence checks: everyone involved is identified, and the conveyancer makes sure anyone giving up a share understands the consequences and is acting freely, sometimes recommending separate advice.
- Lender consent: if there is a mortgage, the lender must approve the change. Adding someone usually means they become a borrower too; removing someone usually needs the remaining owner to pass affordability checks or take a new mortgage, often through a remortgage at the same time.
- Tax: working out the chargeable consideration and any property tax due, and checking exemptions such as transfers between spouses or civil partners on separation under a court order or agreement.
- Documents: drawing up the transfer deed, normally form TR1, and a declaration of trust if the shares will be unequal.
- Signing and completion: all the owners, old and new, sign, any money is paid and any new mortgage completes on the same day.
- After completion: filing any tax return and registering the new owners, and any new charge, at HM Land Registry.
What the legal fee covers
- Identity checks on everyone joining, leaving or remaining on the title
- Checking the title and any mortgage or restrictions
- Obtaining the lender's consent, or acting on a new mortgage
- Working out the chargeable consideration and any property tax
- Preparing the transfer deed
- Arranging signing and witnessing
- Filing any property tax return
- Registering the change at HM Land Registry
Costs you may see on top
- The HM Land Registry fee for registering the transfer
- A fee where a mortgage is transferred, repaid or replaced
- Identity checks for each person and the bank charge for sending money
- Your lender's fees for considering the change or arranging a new mortgage
- Stamp Duty Land Tax, or the Welsh equivalent, if the chargeable consideration is large enough
- A declaration of trust if the owners will hold unequal shares
- Separate legal advice for the person leaving the title, if recommended
What to have ready
- Names of everyone on the title now and after the change
- The share that is moving and any money being paid
- Your mortgage balance, lender details and the lender's consent or new offer
- Any court order or financial agreement, if the transfer follows a divorce or dissolution
- Photo identification and proof of address for everyone involved
- Details of any other property owned by the person joining the title
How long it takes
A transfer of equity commonly takes 4 to 10 weeks, and the lender usually sets the pace. If the lender only needs to consent, things can move quickly; if a new mortgage or remortgage is needed, allow time for the application and offer. Without a mortgage, a straightforward transfer between people who agree on the terms can be done in a few weeks. Delays often come from waiting for everyone to sign, or from separating couples who have not yet agreed the financial terms.
Things to watch for
- The person leaving the title stays liable for the mortgage until the lender formally releases them. Do not sign the transfer until the lender has agreed.
- If you are buying out a former partner, agree a value for the home first, ideally from an independent valuation, and make sure any new mortgage covers both the buyout payment and the existing loan.
- Check whether any other loan is secured on the property, such as a second charge. Every lender with a charge registered against the home will usually need to consent to the transfer.
- Adding someone to your title gives them a legal share of your home. If you are contributing more, record it in a declaration of trust before the transfer completes.
- If the person joining already owns another home, the higher rates for additional homes can apply in some cases, so tell your conveyancer about any other property.
Questions people ask
How is stamp duty worked out on a transfer of equity?
It is based on the chargeable consideration: any money paid for the share, plus the part of the mortgage the person receiving it takes on. For example, if you transfer half of a home with a £240,000 mortgage to your partner, who pays you £20,000 and takes on half the mortgage, the consideration is £140,000. In England that would usually mean 2% on £15,000, which is £300. See GOV.UK for more.
Do we need the lender's permission?
Yes, if there is a mortgage. The mortgage is secured on the whole property, so the lender must agree to any change of owner. When someone is added they usually have to become a borrower, and when someone is removed the lender checks that the remaining owner can afford the payments alone. Some lenders treat this as a simple consent, others require a new mortgage application.
What if we are divorcing or separating?
A transfer to your spouse or civil partner as part of a divorce, separation or dissolution, under a court order or an agreement, is usually exempt from Stamp Duty Land Tax. The financial terms should be settled, ideally with a court order, before the transfer completes. Your conveyancer handles the property side, while the settlement itself is a matter for your family lawyer.
Should we be joint tenants or tenants in common?
Joint tenants own the whole property together, and it passes automatically to the survivor when one dies. Tenants in common each own a share they can leave in their will, and the shares can be unequal. A transfer of equity is a good time to decide which suits you. The GOV.UK joint ownership page explains the difference.
Who does the work
Your matter is handled by a law firm regulated by the Solicitors Regulation Authority, the Council for Licensed Conveyancers or CILEx Regulation, or in Northern Ireland by a solicitor regulated by the Law Society of Northern Ireland. At the moment the law firms on our panel act for property in England and Wales, so for property in Northern Ireland we tell you whether a firm can act for you before we pass your details to anyone. The firm confirms who will work on your file, their experience and its terms before you instruct it. How we choose our firms.