Adding Or Removing A Name From The Title Deeds
A guide to transferring ownership of your home, often by adding or removing a joint owner.
If you own or co-own a home, there may come a time where you wish to switch the ownership of the property. This commonly happens when there is a change to a relationship you’re in. For example, if you own a property as a single person, then you may wish to add your spouse to the legal title when you get married. The same is true when a couple splits or gets divorced, and the property should be moved back to a single ownership after they’ve bought out their ex. Both of these scenarios are referred to as a transfer of equity. Read on to find out more.
What Is Equity?
If you have used finance, typically a mortgage, to purchase a property, then the amount of equity you have is what’s left after the mortgage has been paid back. So, if you own a home that is valued at £400,000 and your mortgage is £200,000, then the amount of equity you have is the remaining £200,000. The amount of equity you own usually increases over time as you gradually repay back the capital to your lender. It is this equity you must decide how to split.
How Is The Share of Equity Calculated?
A team of conveyancing solicitors Essex wide explains that those named on the legal title of the property can make a decision about how to change the share of the equity in the transfer. For example, if you currently own 100% of the equity, and wish to add your fiancé to the deeds, then you may choose to go 50/50. To give you another example, if you own commercial premises and have taken on two business partners with an equal share in your company, then you might each require a 33.3% share of the equity. But in this scenario, if you are to remain as a senior partner, above your other two junior partners, then the split may be more like 60% to you, and 20% to each of the others. It’s really your decision and your conveyancer will be able to act for you based on your wishes.
Ready To Arrange A Transfer of Equity?
Once you’ve made your decision about how you’d like to adjust the equity balance in your property, then next step is to instruct a reputable conveyancer with experience in equity transfers, which is often a straightforward job. Your solicitor will act on your behalf to ensure that you remain fully protected throughout the transfer. In some cases, the person you’re transferring equity to will have arranged their own solicitor to act for them. Initially, your conveyancing solicitor will draft up a Deed of Transfer document for all parties to sign. Where a change in mortgage or remortgaging is necessary, they will also liaise with the lender. The lending agreement should all be finalised prior to the official signing of the Deed of Transfer.
The final steps are for your solicitor to complete a stamp duty tax return form for HMRC, which is necessary even when no stamp duty is due. They will then register the change of ownership at the Land Registry and the title change will be complete!
