Transfers of Equity
A transfer of equity means the transfer of a persons share in a property. It could be that a person is either added on to the property or removed from the property.
The equity in a property is the net value of their share of the property. This means the value of the property minus any mortgage or loans secured on it.
A transfer of equity is the process whereby the current property owner relinquishes either a part or their whole stake in a property and transfers ownership to someone else.
Transfers of equity can take place for a number of reasons. Some of the most common examples are:
Marriage or living together
The new partner or spouse may take part ownership of a property that was previous owned in the other person’s sole name.
Divorce or separation
When a couple divorce or separate, the person leaving the property may wish to have their name, and legal liability for the property, removed. In some circumstances this will involve a cash payment being made, ie the person retaining the property will buy the other persons share out. This financial settlement will usually be worked out as part of a divorce settlement.
When a joint mortgage is in place on the property, the mortgage company’s consent will be required before someone can relinquish their liability to that mortgage and their name can be removed.
In some circumstances it may be beneficial for tax planning purposes to transfer ownership of a property, or part of a property, into someone else’s name, for example the owners children.
At Hoole and Co. we can advise you on all aspects of transfers of equity. We have carried out a large number of these types of transactions and we will guide you through the process with clarity.
Please contact us for a consultation.