Transfer of Equity costs: How much will you have to pay?
For many people, the cost of a Transfer of Equity will be an important consideration. That's why we make sure our fees are competitive and transparent. Unlike many Conveyancers and Solicitors, we won’t add extra fees to add to the headline quoted fee.
In some cases, there may be unforeseen circumstances that require extra work. If this happens, we'll let you know what's required and how much it will cost. After all, we're here to make the process as quick and simple as possible.
No extra work? The quote you receive is the fee you'll pay for your Transfer of Equity.
Do I need to pay Transfer of Equity Stamp Duty Land Tax or Land Transaction Tax?
If budgeting for a Transfer of Equity, it's vital to provide accurate information to your Solicitor at the start. This includes why you're transferring your property and how much of your mortgage is still owed – plus any new mortgage amount or increase in your existing mortgage.
Your Solicitor will then provide a breakdown of the legal fees and disbursements involved. You'll also be told if, as part of your Transfer of Equity, Stamp Duty Land Tax* (SDLT in England) or Land Transaction Tax (LTT in Wales) will be payable.
It's important to know if SDLT or LTT needs to be paid so there aren't any nasty surprises.
SDLT on a Transfer of Equity is not usually payable if it's subject to a Court Order. But it may be payable if you get married and wish to transfer a property into joint ownership, for example:
- Mr Jones owns a property worth £500,000, with an outstanding mortgage of £400,000. Mr Jones marries Mrs Smith and transfers equity, with Mrs Smith being responsible for 50% of the existing mortgage i.e., £200,000.
- In this case, HMRC will charge SDLT on the amount paid for this property consideration i.e., £200,000, or 50% of the existing mortgage. The SDLT due is therefore £1,500.
Do you need to pay stamp duty on a property transfer between family members?
SDLT can be complicated. And it can often need the expertise of a specialist Transfer of Equity Solicitor to help you know where you stand. If you're planning a transfer between members of your family, SDLT may not apply if it is a 'gift'. This is because there's no transfer of monetary value involved, and your family members aren't taking on any liability for the mortgage.
In all cases, your Solicitor will review the reasons for making your transfer and the calculations. From this, they can tell you if SDLT is payable. For further details, please see www.gov.uk. You can also find other examples where SDLT is paid on a Transfer of Equity for reference.
*The UK Government has suspended Stamp Duty on the first £250,000 of all property sales in England and Northern Ireland until September 30. At this point, Stamp Duty will apply to property sales over £125,000 – as was previously the case.
Land Transaction Tax in Wales has returned to normal rates, meaning you won't pay anything on the first £180,000.