When To Consider Transfer Of Equity For Your Home

If you own a property, you must do your bit to maintain it over the years. Besides keeping your place well-maintained, you may have to consider the transfer of equity at some point. Essentially, it is about adding or removing someone from the title of your property. You will probably want to do it when your life or relationships change. However, owners often overlook the transfer of equity or simply procrastinate because it involves a complicated process and lots of paperwork. But it is crucial to know when to transfer equity to prevent problems down the line. Here are some situations when you should consider it. 

Gifting inheritance

As a parent, you may want to gift your home to your children. Transferring ownership legally is crucial to keep things on track for yourself and the recipients. With gifting, there should be no duress or undue influence. Moreover, the person becoming a joint owner also gets the responsibility for issues such as structural problems or registered notices against the place along with the gift. Ensure that your child knows about the potential liabilities before proceeding with the transfer of equity.

Marriage 

Getting married is another valid reason to consider equity transfer, as you may want to transfer a part of ownership to your partner. Homeownership comes with a fair share of responsibilities, and the joint owner gets them along with the rights. It makes sense to let your partner know both sides of the deal before going ahead. You will also require the lender’s consent if a mortgage is in the picture. Consult an expert about Stamp Duty implications for a mortgaged home. 

Divorce or separation

Divorce or separation may also lead to a transfer of equity. It is the best option when the couple decides to give ownership to either of the partners instead of selling the home. They may do it as a part of the divorce settlement or for financial consideration. You must involve a conveyancing professional to tie the loose ends properly. The best way to do it is to get a Transfer of Equity quote for the process. Things can get complicated if a mortgage is there, and a conveyancer is the best person to guide you. 

Death

Another life-changing event when equity transfer becomes necessary is the death of the owner. The personal representatives have to take care of the transfer process to the legal beneficiary if the sole owner dies. Conversely, the right of survivorship applies in the case of joint ownership. The surviving owner gets the ownership, but they have to follow a process to complete the formalities. It includes informing the Land Registry and providing documentary evidence.

Financial planning

A transfer of equity makes a feasible decision for owners looking for financial planning benefits. For example, transferring a share to your spouse makes sense because it reduces the Capital Gains Tax liability when you sell the place. It is much less than the liability for sole ownership because both owners get Capital Gains Tax allowance as individuals. But remember to consult a tax expert before going ahead. 

Transferring equity is necessary in some cases, while you may want to do it as a choice in other situations. Whatever the reason, always have an expert conveyancer helping you through the process.