Transfer of Equity Cost
What drives up the transfer of equity cost?
The transfer of equity fees will vary depending on the:
- value of the property;
- property tenure (leasehold or freehold);
- ownership (tenants in common or joint tenants);
- mortgage lender;
- number of restrictions on the title; and
- money changing hands (consideration).
How are transfer of equity costs calculated?
The legal fees are cheaper than the conveyancing solicitors costs on a purchase because they don't have to check the title and report on the restrictive covenants/easements, but they do have to satisfy themselves that the restrictions are adhered to and the parties are adequately informed around their beneficial interest.
For example, an owner isn't giving up their share in the property for under what it is worth.
Transfer of Equity Solicitor Costs
The transfer of equity fees are paid to your solicitor, based on the amount of work required:
Solicitor Work | Average Legal Fees |
Transfer of Equity Legal WorkThis includes checking the legal documents, including title deeds, for restrictions, drafting the transfer documents (TR1), handling completion, submitting the stamp duty land tax form, and registering the property with the new owners' names. | £450 - £750 Our fee starts at £399 INC VAT |
We'll include any applicable additional transfer of equity legal costs in your fixed fee quote, according to the details you provide to us.
Additional legal work | Average Legal Fees |
(If leasehold) Leasehold WorkThis includes contacting the freeholder to confirm notice fees, service charges and ground rent liabilities, and settling the same upon completion and filing the notice to the freeholder post-completion. | £200 - £300 |
(If using one solicitor) Land Registry ID1 FormThis is payable if the party leaving the title doesn't have a solicitor acting for them. The reason for this cost is that the Land Registry requires the owners' ID verified by a solicitor, or else they won't update the legal title. | |
(If party leaving the title is being paid under value) Declaration of SolvencyThis is payable if the party leaving the title is being paid less than the market value for their share. This transfer of equity cost protects the remaining owners from having the transfer reversed if the leaving party is made bankrupt. | |
(If an LL restriction applies) Anti-Fraud Restriction RemovalThis is payable if, when you purchased the property, you applied the Form LL Restriction to the title to protect yourself from someone fraudulently selling your home. | |
(If tenants in common) Remove a Form A RestrictionIf you currently own the property as tenants in common, there is a Form A restriction applied to the title. The restriction stops a sale/transfer by any one party (No disposition by a sole Proprietor) and as such, to remove the restriction dated when the parties applied it, you will need to make a Statement of Truth (Land Registry ST5 Form) and sign a Land Registry RX3 Form. The ST5 confirms the remaining party/ies hold the beneficial interest in the property and that no beneficial interest in the property has been separately mortgaged or charged, and that no beneficial owner is or was subject to a charging order or bankruptcy proceedings (a registered mortgage does not count). Where there is a deed confirming the position of the current owner’s beneficial interest, then a certified copy of this will need to be provided to the Land Registry with the application to remove the Form A restriction. | £299 |
(If remortgaging) Discharging the old mortgage and applying a new oneOne bank transfer to pay off existing mortgage, obtaining a mortgage redemption statement from your existing lender, receiving your new mortgage offer, reviewing the lender’s special conditions and terms, receiving the mortgage advance and removing the original restriction and applying the new lender’s at the Land Registry. | £399 |
Transfer of Equity Cost of Disbursements
The disbursement costs are fees paid to third parties such as HMRC and the Land Registry. We include your fixed disbursement costs in our transfer of equity quote.
Disbursement | Average Cost | |||||||||||||||||||||
Stamp Duty Land TaxIf you are transferring equity and the transaction provides an individual with an interest in land, stamp duty land tax (SDLT) or land transaction tax (LTT) will be payable by reference to any chargeable consideration given for it. Chargeable consideration is defined in the Finance Act 2003 and confirmed by HMRC. Consideration can be cash changing hands or the taking on of a debt (such as a mortgage or personal loan). To work out the total consideration you add the cash/money being paid for the assignment and the new owner’s share of the existing mortgage/loan debt. If the total consideration exceeds the stamp duty threshold, then stamp duty is payable at the prevailing rate. Any stamp duty land tax should be declared and paid to HMRC within 14 days after completion of the transaction; otherwise, you may incur penalties. You can file your stamp duty land tax return with HMRC at Gov.UK, and pay any liability. | £TBC | |||||||||||||||||||||
Land RegistrationThe Land Registry cost is based on the full price of the property. Land Registry Scale TWO Fees
| £20 - 305 | |||||||||||||||||||||
Online ID ChecksChargeable per client. Find out what ID our solicitor accepts | £15 | |||||||||||||||||||||
Official Copy of Register & Title Plan (per title) | £6 | |||||||||||||||||||||
Priority and Bankruptcy Land Registry Searches | £10 | |||||||||||||||||||||
(if undervalue) Insolvency Indemnity InsuranceOnly payable if you are transferring equity under market value. The insurance protects if the party coming off becomes bankrupt and their trustees seek to reverse the transfer to pay off their debts. This only applies if the transfer is for under market value in an arm's length transaction. | ~ £60 to £100 | |||||||||||||||||||||
(if leasehold) Official Copy of the Lease | £3 | |||||||||||||||||||||
(if leasehold) Payments to freeholdersuch as Notice fees, licence to assign or engrossment fees | £TBC |
How much does the equity being transferred cost?
Often, on transfers between spouses and family, no consideration is paid for the equity. If you need to work out the value of the share being transferred, you'll need a current market valuation. The value of the equity is the full value times the percentage share. For example: If you are transferring a 50% share in a property valued at £300,000, the cost for the share would be £300,000 x 50% = £150,000.
If someone is buying you out of the share you are transferring, and you're not sure how much is fair, read our article How to Calculate Buying Someone Out of a House, next.
* Mortgage lenders choose which solicitors they will or won't work with. Our panel solicitors are on 99% of mortgage lender panels. Our panel solicitors are currently not on the panel for Kent Reliance (when buying through Shared Ownership) and the Islamic Development Bank. Tell us who your lender is and we will assign you an approved panel solicitor.
** Our panel of solicitors are regulated by the Solicitors Regulation Authority and conveyancing work is accredited with the Law Society's Conveyancing Quality Scheme.
- Get up-to-date property tax advice on SDLT, CGT, IHT, Personal versus partnership versus company structure.
- Free 15-minute initial consultation with a qualified accountant from our panel of tax advisors.
- Ask your tax questions and get guidance on what you can do next.
- If there is some further accountancy work required, then you'll be quoted for this as a separate piece of work with no obligation to purchase.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
