Transfer of Equity Cost
- 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
Solicitor Work | Average Legal Fees |
Transfer of Equity Legal Work This 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. | £363 INC VAT |
Leasehold Work This 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 |
Land Registry ID1 Form This is payable if the party leaving the title doesn't have a solicitor acting for them. The reason for this cost is the Land Registry require the owners' ID verified by a solicitor or else they won't update the legal title. | |
Declaration of Solvency This is payable if the party leaving the title is being paid less than the market value for their share. The reason for this transfer of equity cost protects the remaining owners from having the transfer reversed if the leaving party is made bankrupt. | |
Form LL Anti-Fraud Restriction This 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. | |
Remove a Form A Restriction If 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. | £108 |
Transfer of Equity Cost of Disbursements
Disbursement | Average Cost | |||||||||||||||||||||
Stamp Duty Land Tax If 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 Registration The Land Registry cost is based on the full price of the property. Land Registry Scale TWO Fees
| £TBC | |||||||||||||||||||||
Online ID Checks Chargeable 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 Insurance Only 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. | Circa £60 to £100 | |||||||||||||||||||||
(if leasehold) Official Copy of the Lease | £3 | |||||||||||||||||||||
(if leasehold) Payments to freeholder such as Notice fees, licence to assign or engrossment fees | £TBC |
* 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 structures
- 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 in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.
