Transfer of equity

A transfer of equity is when one, two or more co-owners want to move out of the property, and want to release their share of the equity.

Equity is the market value of a property after taking off any mortgages. So if your property is worth £250,000, and you have a mortgage or mortgages of £190,000, your equity is £60,000.

The current lender will have to agree to the arrangement, as they will have to be satisfied that the remaining owner will be able to meet the mortgage payments.

Stamp duty land tax (SDLT) may be payable on a transfer of equity, although if the transfer is because of divorce, no stamp duty land tax will be payable.

A transfer of equity may also be appropriate as part of a tax planning scheme.