A transfer of equity involves moving ashare in a property or piece of land through an addition or a removal of a party from the title deeds. This can come about as part of a gift to someone, due to a divorce, death or marriage. There are many reasons why people want to transfer equity, perhaps to add a family member to the title deeds.
What is equity?
Equity refers to how much of a property a person owns. This would equal the market value of the property minus any loans or mortgages. In some circumstances, one person may pay money to the other party for a share of the equity in a property. To raise the funds for this, the property can be remortgaged or mortgaged at the time of the transfer. For helps finding Conveyancing Solicitors Birmingham, contact a business like Sam Conveyancing who can find Conveyancing Solicitors Birmingham on your behalf.
Transferring as a gift
If the transfer is part of a gift, no money is passed and the property is mortgage free, it should be straightforward and with no strings attached. The transfer deed will contain details of the gift and no stamp duty land tax will be due.
Divorce or Separation
When a property is mortgaged, the consent of the mortgage lender must be sought before the transfer can take place or the property will need to be remortgaged with a new lender. There will be no stamp duty land tax payable if the transfer is subject to a court order in family proceedings or in the case of a separation and if the transfer took place before court order.
Should the property be held in two names, on the death of one of the named, that party can be removed from thetitle on submission of the death certificate. When a property has one name only, the person dealing with the estate of the deceased must transfer the title on the property and no stamp duty land tax is payable.
Can the same solicitor act for both parties?
A solicitor cannot act for both parties in a transfer of equity. One party will have to seek independent legal advice, even in the case of the transfer being a gift. This is to avoid any conflict of interest, suggestions of duress or undue influence.
Is a transfer of equity easy?
Most times a transfer of equity is straightforward, however things can get more complicated if the property is leasehold, for example. In this case, the landlord or management company will need to provide consent to the transfer.
It’s important to get some financial advice if the intention is to make a transfer as a gift as some transfers will have an impact on Capital Gains Tax or Stamp Duty Land Tax. Expert advice will help with determining the best course of action.