What is a transfer of equity?

A transfer of equity is the legal process of changing who owns a property without selling it. You might be adding someone to the title deeds, taking someone off, or changing how much of the home each owner has. The property stays where it is, and usually so does at least one of the owners.

It sounds like paperwork, and mostly it is. But if there's a mortgage, the lender has to agree. Depending on how the change is structured, there may also be Stamp Duty to pay, even when no money changes hands.

What a transfer of equity actually is

"Equity" is the share of the property you own outright, meaning its value minus anything still owed on the mortgage. A transfer of equity moves some or all of that ownership from one person to another and records the change at HM Land Registry.

It's different from a sale, because the property isn't going on the open market and there's no chain. It's also different from a remortgage, although the two often happen together when the lender needs a new mortgage in the new owners' names.

When people need one

Most transfers of equity come from a change in someone's personal life. The common ones are:

Moving in with a partner, getting married or entering a civil partnership, and adding them to the deeds.

Separating or divorcing, where one person buys the other out or takes over the home.

Gifting a share of a home to children or other family members.

Changing the split between joint owners, for example moving from a 50/50 split to 70/30 after one person has paid in more.

Updating the title after a joint owner dies, although that's often a simpler process than a full transfer.

How the process works

Every transfer is slightly different, but most follow the same four steps.

Talk to your lender first

If there's a mortgage, nothing can be registered without the lender's consent. The lender will want to check that whoever is left on the mortgage can afford the repayments. If someone is being added, they'll normally need to be added to the mortgage too.

Instruct a conveyancer

A conveyancer or solicitor checks the title, drafts the transfer deed, deals with the lender and works out whether any tax is due. If you're joint owners changing how you hold the property, it's a good moment to think about whether you want to own it as joint tenants or tenants in common.

Sign the transfer deed

The change is made on a Land Registry transfer form, usually a TR1, which everyone involved signs in front of a witness. If there's a mortgage, the lender's new or amended mortgage deed is signed at the same time.

Pay any Stamp Duty and register the change

Once the transfer completes, your conveyancer files a Stamp Duty Land Tax return if one is needed, pays any tax and sends the application to HM Land Registry. The register is then updated to show the new owners.

Transfer of equity with a mortgage

This is the part that causes most delays. A lender won't let a borrower walk away from a mortgage just because the deeds have changed. So if you're taking an ex-partner off the title, you'll usually have to show you can afford the whole mortgage on your own income.

Some lenders will handle it as a straightforward change to your existing mortgage. Others will ask you to apply for a new product, and a few will insist on a full remortgage. If your current deal has early repayment charges, it's worth checking with your existing lender before you look elsewhere. You can read more in our guide to remortgaging after a change in circumstances.

How much a transfer of equity costs

There are three main costs: the legal fee, the Land Registry fee and, in some cases, Stamp Duty.

Legal fees for a simple transfer with no change to the mortgage start from around £350 plus VAT at some firms. Expect to pay more if a remortgage is involved, because the conveyancer is also acting for the new lender. Some firms charge well over £1,000 plus VAT for a combined transfer and remortgage.

The Land Registry fee depends on whether the transfer is a gift or is for value. If money or mortgage debt is being taken on, HM Land Registry charges on its Scale 1, based on the amount being paid. If it's a gift, it charges on its lower Scale 2, based on the value of the share being transferred.

On top of that, there are small costs for identity checks and Land Registry searches, and the cost of any valuation your lender asks for.

Do you pay Stamp Duty on a transfer of equity?

Sometimes, and it catches a lot of people out. Stamp Duty is based on what HMRC calls the chargeable consideration. On a transfer of equity, that's any cash you pay plus the share of the mortgage you take on.

So if you take over half of a £250,000 mortgage, HMRC treats that as £125,000 of consideration, even though no money leaves your bank account. In England and Northern Ireland, the standard rates start at 2% on anything above £125,000.

There are two important exemptions. Gifts don't attract Stamp Duty as long as there's no mortgage being taken on. And transfers between spouses or civil partners as part of a divorce or dissolution, under a court order or a formal agreement, are exempt altogether. Unmarried couples who separate don't get that exemption.

Even when there's no tax to pay, your conveyancer may still need to file a Stamp Duty Land Tax return. If you already own another property, check with your conveyancer whether the higher rates for additional homes could apply. They don't apply to a transfer between spouses or civil partners where no one else is involved, but they can catch other arrangements. HMRC's guidance on transferring ownership of land or property covers the rules in detail.

Scotland and Wales have their own taxes, Land and Buildings Transaction Tax and Land Transaction Tax, with different rates and thresholds.

Other taxes worth checking

Stamp Duty isn't the only tax to think about. Transfers between spouses and civil partners who live together don't usually trigger Capital Gains Tax. Gifting part of a home to anyone else can, although if it's been your main home the whole time you've owned it, Private Residence Relief will usually cover the gain.

A gift of property can also count towards your estate for Inheritance Tax if you die within seven years of making it. If you're gifting a share to your children, our guide to gifting property to children and the tax involved goes through it in more detail. For anything beyond a straightforward case, it's worth speaking to a tax adviser.

How long a transfer of equity takes

A simple transfer with no mortgage changes can be done in two to six weeks. Once a lender is involved, it's more likely to take four to eight weeks, and longer if the lender needs a valuation or a full remortgage application.

After completion, HM Land Registry has to process the application. That can take a few more weeks, and the change isn't formally finished until the register shows the new owners.

Can you do a transfer of equity without a solicitor?

If there's no mortgage, yes. You can complete the Land Registry forms yourself. Anyone who isn't represented by a conveyancer has to prove their identity, usually on form ID1, which a conveyancer or other qualified professional has to check and sign.

If there's a mortgage, doing it yourself isn't realistic. Lenders almost always insist on a conveyancer from their panel, because they need their own mortgage properly registered. It's also worth remembering that a transfer is hard to undo, especially if it's a gift. Getting the tax wrong or missing a restriction on the title can cost far more than the legal fee you've saved.

Most transfers of equity are quick and relatively cheap once the lender is on board. If you're ready to get started, you can compare conveyancing quotes through Moving Compared and find a conveyancer who handles transfers of equity regularly.