What is the Cost of Splitting Title Deeds?
Want to divide and conquer your property? Splitting your title deeds can be a strategic move, whether you’re looking to sell a portion of your land or gift property to loved ones.
From solicitor fees to Land Registry charges and tax implications, the costs of splitting title deeds vary and depend on the complexity of the split but could potentially set you back around £1,000.
Here is a basic breakdown of the average costs to split a title deed, we go into more detail on costs further in the article.
Service | Cost |
|---|---|
Service Legal fees | Cost Average around £750. |
Service Land Registry fees | Cost Scale 1 or Scale 2 fees for property application and registration. |
Service Survey and valuation fees - if applicable | Cost If you're buying a property to split, you'll need a Level 3 survey. We offer this from £499 EXC VAT. |
What is a title split and why would you split title deeds?
A title split, or title severance, is the legal process of dividing a single property title into two or more separate titles. This can be necessary for various reasons, such as:
- If you want to sell a portion of your land, splitting the title allows you to sell that specific part without affecting the ownership of the rest of the property.
- Selling a strip of excess land to a neighbour to raise funds without giving up too much of your property.
- Splitting the title can be a convenient way to gift a portion of your property to family members or other beneficiaries.
- If you jointly own a property with someone else, splitting the title can separate your ownership and create individual titles for each owner. This could avoid potential future disputes.
- If you plan to sell the property in the future, splitting the title can make the process smoother and potentially increase its market value.
If you own a freehold property in the UK, you can divide it into multiple leasehold units. This involves splitting the property's title at the Land Registry.
To do this, you must provide scale drawings of the proposed units. Our conveyancing solicitors can guide you through the entire process, including the legal aspects and registering the new leasehold titles.
Types of title deeds
Freehold Title:
- Grants absolute ownership of the land and any buildings on it.
- You can split a freehold title vertically or horizontally into separate leasehold titles.
- Offers the highest level of property ownership.
Leasehold Title:
- Grants ownership of a property for a fixed period, often 99 or 125 years.
- Leasehold properties are subject to ground rent and service charges.
- You cannot split a leasehold title because you don't own the land itself; the freeholder has the ultimate ownership rights.
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How do you split title deeds with a mortgage?
When splitting a title deed, you'll need to consider the implications for your mortgage. If you have an existing mortgage on the property, you'll need to obtain consent from your lender before proceeding with the split.
It's important to note that the part of the property that you retain after the split will need to be of sufficient value to cover the remaining mortgage debt.
Splitting your property without your lender's consent could be a breach of your mortgage agreement, potentially leading to repossession.
However, the lender's charge at the Land Registry likely prevents splitting the property title deeds without their consent.
- You may need to remortgage under new terms due to the change in LTV (loan-to-value ratio) after the deed split.
- Be aware of any potential early repayment charges that may apply if you pay off your existing mortgage and have to remortgage with a new lender.
Even with lender consent, there may be limitations. Most major lenders restrict subdivisions to a maximum of four units. Additionally, for properties converted within the past six years, lenders often require a Professional Consultant Certificate (PCC). A PCC confirms building regulation compliance and assigns liability for future issues to the consultant.
How does one divide a property into two addresses?
Vertical division
Vertical division involves splitting the freehold title into separate titles for each floor or section of the property. This can be complex and may require significant legal and technical expertise.
- Obtain planning permission and building control consent before starting.
- Ensure that the proposed division doesn't compromise the structural integrity of the building.
- Each new title should have independent access to the property.
- Arrange for separate utility meters and service connections for each new title.
- SAM has a panel of surveyors, structural engineers, and legal professionals to help you navigate the legal and technical aspects of the split.
Horizontal division
Horizontal division involves creating leasehold interests within a freehold property. For example, you could create a leasehold for the ground floor and a leasehold for the upper floors.
This approach can be more straightforward than a vertical division, but it's important to consider for future ownership and management.
- Consider all of the above points for vertical splits.
- Determine the length of the leasehold terms for each unit.
- Establish the ground rent payable by leaseholders to the freeholder.
- Determine how service charges, such as maintenance and insurance costs, will be allocated and collected.
- Consider whether a management company is necessary to oversee the property and collect service charges.
Example: splitting a house into flats
If you already have a freehold house that you want to convert into flats, you could keep the freehold title for the land and register a leasehold title for each flat. The leasehold titles would grant the leaseholders the right to occupy and use their respective flats for a specified period, subject to the lease terms.
As the freeholder, you will manage the freehold title and collect service charges and ground rent from the leaseholders.
You can keep the leasehold titles yourself if you transfer them into a company name and rent the units out, or you could transfer each leasehold title into joint names with someone else.
Alternatively, you can sell them outright, but be prepared to be liable for Stamp Duty Land Tax and corporation tax rather than income tax on the rental income.
The Land Registry doesn't require planning permission to split your property into multiple dwellings, but your local council likely will. It's best to consult with your local building control department before starting any construction work to ensure compliance with regulations.
Additionally, your property's title may contain restrictive covenants that limit certain types of development. Our conveyancing solicitors can help review these covenants to identify any potential restrictions.
Would you like to run through your Land Registry needs with a really helpful person?
Call us at 0333 344 3234 or request a callback/email to answer your queries about our Land Registry application services. SAM's UK-based team will explain which of our solicitor services are required to make changes to the title.
There's no obligation to instruct. We'll make sure you understand your options and provide a free, fixed-fee quote for our best-value service to meet your needs. No robots, no call centres. Property challenges solved.
How much does it cost to split the title?
The cost of splitting title deeds can vary significantly depending on several factors, including the complexity of the property and the specific services required.
Legal fees
Conveyancing solicitor costs that cover all the legal work required to split the title like drafting contracts and overseeing the official transfer at the Land Registry. The costs for this can vary depending on the complexity of the transaction, but average at around £750.
If you require tax advice or dispute resolution, this is likely to command extra fees. Additionally, ID checks, pre-completion searches, and Land Registry fees may apply.
Land Registry fees
Fees charged by the Land Registry to process the application to split the title and register the new titles.
These fees are calculated based on two scales: Scale 1 and Scale 2. The scale used depends on the nature of the transaction and whether it involves monetary consideration.
Scale 1 fees are higher and based on the value of the land or property and typically apply to applications in registering unregistered land, transfers, or leases in a property transaction.
In the context of a title split, if the transaction involves a sale or purchase of part of the property, Scale 1 fees would apply.
Scale 2 fees are lower and based on the value of the land or property, or, for mortgages, the amount secured by the mortgage. This fee scale is used for transfers of property that are not sales like gifts or beneficiary transfers under a will.
In the context of a title split, if the transaction involves a transfer of part of the property without monetary consideration (e.g., a gift or inheritance), Scale 2 fees would apply.
Survey and valuation fees - if applicable
If you're buying a property intending to split the deeds, you'll need a Level 3 survey. We offer this service from £499 EXC VAT which includes assessing the home's condition and identifying any potential issues.
Taxes and other potential costs
If you're buying the property or land, or you're transferring the title deeds to a company, you will be liable to pay SDLT on the transaction. The amount of SDLT payable will depend on the value of the property and the specific tax rules in place at the time.
If the subdivided units generate rental income, this income must be declared on your tax return.
If your property value has appreciated since purchase, splitting the title and selling or transferring parts of it could trigger Capital Gains Tax (CGT) liabilities.
If planning permission is required for alterations or extensions, you may need to pay planning fees or fees for building regulations approval, which is necessary for any structural work or alterations.
Our solicitors can draft your Deed of Assignment within 1 to 2 working days.
- Assign any amount of beneficial interest from 1% to 100%.
- Change the beneficial interest at a future date for Capital Gains Tax purposes.
- For tenants in common.
£240 INC VAT
How to split title deeds
The time it takes to split a title deed can vary depending on several factors, including the complexity of the property, the efficiency of the legal process, and any unforeseen delays. Generally, the entire process can take anywhere from a few months to several months.
Instructing a solicitor
A solicitor or conveyancer will act on your behalf with the Land Registry; they will be able to advise you on the best approach for your situation. For example, you might just be transferring part of your land from an existing title to create a new title, or you might be creating multiple new leaseholds from an existing freehold title.
You must discuss your reasons for splitting the title and assess the legal and financial implications such as mortgage lender consent, any restrictions or easements associated with the property, and how the title split could affect the overall property value.
If the split involves physical alterations to the property, you are likely to require planning permission from your local authority.
Timeline: Typically a few days to a week.
Land Registry application
Your solicitor will prepare the necessary documentation including the property deeds, plans, and identification documents and apply to the Land Registry with the required fees.
The Land Registry reviews the application and assesses the proposed split. If additional information or clarification is required, this will cause delays.
Timeline: Several weeks to a few months.
Survey and valuation - if applicable
If you're physically altering the property, such as removing a load-bearing wall, you must commission a structural engineer to assess the condition and ensure the planned work will leave the property structurally sound. A valuation might be necessary, especially when creating separate leasehold flats from a freehold property.
This is because you'll need to determine the value of the new leasehold interests. SAM'S RICS surveyors can provide a valuation for this purpose; this information will be used to determine and calculate applicable taxes.
Timeline: A few weeks, depending on the availability of surveyors and valuers. We have availability from .
Legal Agreement
You and your solicitor will draft a legal agreement outlining the terms of the split which includes ownership shares, responsibilities for maintenance and repairs, and any other relevant terms and conditions.
Timeline: A few weeks.
Completion and registration
Once all legal formalities are complete, the final documents are submitted to the Land Registry and the new titles will be registered. Upon registration, you will receive each new title deed for the newly created properties.
Timeline: A few weeks to a month, depending on the Land Registry's processing time.
We can help with your Transfer of Part
Included in our Transfer of Part fixed fee:
- Draft contracts issued with Land Registry compliant plan, title documents, and utilities/plot information.
- Replies to enquiries.
- (If applicable) receive mortgage lender consent for the title split or transfer of part.
- Exchange of contracts and completion.
We will charge extra for Rights of Way, drafting new leases, and setting up a management company for the freehold.
Contact us to receive a free, no-obligation fixed-fee quote.
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