Transferring a Property

There are times when ownership of a property changes which does not involve the sale or purchase of the same. This could include situations such as a married couple living together yet the property is only registered in the one owner’s name or where a property is owned by two or more people, but it is transferred to one of them solely. This is known as transfer of equity.

Where a property is owned by a husband and the wife is to be transferred onto the title too, it is important to establish whether any money is changing hands between the parties. For example, it may be that the husband is to receive money from the wife to become co-owner of the property. This is often referred to as “consideration”. One point to be mindful of is whether any consideration would trigger Stamp Duty Land Tax to HM Revenue and Customs.

Another point to consider is whether the property has a mortgage secured against it by the husband. If this is the case, then consent from the lender would need to be sought to enable the transfer of the ownership of the property to take place. On the basis that lender consents to the transfer of the property, the wife would be taking on half of any outstanding mortgage debt, which HM Revenue and Customs (HMRC) deems to be consideration. For example, if there is an outstanding mortgage debt of £250,000, half of this would be £125,000. If consideration is also changing hands between the parties, this would be added together with half the outstanding mortgage debt to establish any Stamp Duty payable.

There are of course also instances whereby a registered owner of a property needs to be transferred off the title. Again, it would be important to establish whether any consideration is changing hands between Party A and Party B.  If there is a mortgage secured against the property, consent would also need to be sought from the lender to transfer the property. If Party B is being transferred off the title and Party A is taking on the mortgage solely, HM Revenue and Customs deem half the outstanding mortgage debt to be consideration. Taking the example above, if the outstanding mortgage debt is £250,000, half of this would be £125,000.  In addition, if consideration is changing hands between the parties this would be added to half the outstanding mortgage debt figure to calculate any stamp duty payable.

There are several points to consider when transferring ownership of a property. It is a significant legal and financial step, and each situation may present unique considerations. Whether you are adding or removing an owner, or navigating the implications of mortgages and stamp duty, it is essential to seek professional advice tailored to your circumstances.

Engaging with experienced legal and financial professionals will help ensure that all requirements are met, risks are managed, and the process is completed smoothly.

Please contact Gail Anthony for more information ganthony@bussmurton.co.uk, 01892 502303