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Transfer of Title

Property ownership and considering a transfer of title can be a little daunting yet often necessary. Along with your daily life and responsibilities, the idea of making significant legal and financial decisions might feel overwhelming. 

In this guide, we will cover the details of transfer of title, whether you're a first-time home buyer, considering a property transfer within the family, or navigating the complexities of joint ownership. 

We cover:

• What is a transfer of title?;

• Can you transfer the title of a house;

• Reasons for transferring title deeds;

• How do you transfer ownership of a property;

• Transfer of title into one person’s name;

• Transfer of title into joint names;

• Transfer of title to a family member;

• Transfer of title after death;

• Transfer of title with a mortgage;

• Do you need a solicitor for transfer of title;

• How much does it cost to transfer a property title;

• How long does a transfer of title take;

• Do you pay stamp duty on transfer of title;

• What documents do I need for transfer of title;

• Do you need proof of insurance to transfer a title;

• Does a transfer of title need to be notarised;

What is a transfer of title?

Transfer of title, sometimes known as a transfer of equity, is a common transaction where you change who officially owns something, like a house, car, or anything valuable (an asset). It's like passing the ownership baton from one person to another. 

‘Title’, in this context, typically refers to legal ownership of the property or asset. 

The transfer of title is a legal concept and often involves specific documentation, such as a transfer of deed in property transactions. This documentation makes the transfer official and legally binding. The exact process and required documents can vary depending on the type of property and the area in which the transfer takes place. 

So, a transfer of title is a legal way of saying, "You're the new owner now!"

Can you transfer the title of a house?

Yes, you can transfer the title of a house through a process known as conveyancing. Conveyancing is the legal process of transferring property ownership from one person to another.

You'll need a legal professional to carry out this transfer, either a conveyancer or a solicitor, to handle the legal aspects, dot all the i’s and cross all the t’s. They will guide you through the process, handle paperwork, and ensure everything is done correctly.

Reasons for transferring title deeds

There are many reasons why you might consider transferring title deeds for a property. 

Some of the most common scenarios are:

• Sale of Property: The most common reason for transferring title deeds is when a property is being sold. In a property sale, the ownership of the property is transferred from the seller to the buyer through the conveyancing process.

• Gift or Inheritance: Property owners may choose to transfer the title deeds as a gift to a family member or friend. Additionally, when someone passes away, their property may be transferred to heirs as part of the inheritance process.

• Change in Relationship Status: In cases of divorce or separation, one party may transfer their share of the property to the other. This is often part of a broader financial settlement.

• Refinancing or Mortgage Changes: If a property owner refinances their mortgage or makes significant changes to the mortgage arrangement, it may involve transferring the title deeds.

• Adding or Removing a Co-owner: Property owners may want to change the ownership structure. For example, a couple may decide to add a partner's name to the property deeds after marriage, or co-owners may decide to remove someone's name due to changes in circumstances.

• Trusts and Estate Planning: Property owners may transfer title deeds as part of estate planning, such as placing the property into a trust for the benefit of specific individuals.

• Settling Debts or Financial Obligations: In some cases, the transfer of title deeds may be part of settling debts or financial arrangements. For example, the property may be used as collateral, and a change in ownership may be required to satisfy financial obligations.

• Correction of Errors: If there are errors in the title deeds, such as incorrect names or details, a transfer may be necessary to correct these inaccuracies.

How do you transfer ownership of a property?

Transferring ownership of a property involves a legal process, conveyancing. The process is slightly different depending on whether you are transferring ownership of the property because you are buying or selling a property, or transferring the property into one or joint names. For any of the below, it is highly recommended to work with a solicitor who can guide you through and often in most parts complete the process for you. 

Transfer of title into one person’s name 

When a property is owned jointly by two or more people, but one name needs to be removed from the title, there is a process for this. This may happen in a divorce or separation. It can also happen if siblings or friends have purchased a property together and certain people want to be taken off the ownership.

You first need to fill in an AP1 form to change the register for a property, including changing your name. You will either fill in a ‘transfer of whole of registered title’ form, if you’re transferring your whole property. 

You must then complete the application form ID1 to prove your identity when lodging an application to HM Land Registry.

You can find out the correct fee using the ‘Scale 2 Fees’. Use the Land Registry fee calculator if you’re transferring part or all of a property as a sale.

There could be Stamp Duty Land Tax to pay. This doesn’t apply if the transfer of property ownership is as part of a divorce settlement, but if the transfer is happening for another reason then you will need to look into this. If there remains a mortgage on the property, this will also need to be transferred into the remaining owner's name.

Transfer of title into joint names

You might want to add a name to the title register, transfer a property into joint names, if you want to make a partner or family member a joint owner. In this case, you should follow the same steps as above to do so. 

Transfer of title to a family member

You might consider transferring the ownership of your property to a family member. This is often done to reduce the potential Inheritance Tax (IHT) liability on the individual’s Estate after their passing. If the person lives for seven years following the transfer, the property won't be considered part of their Estate.

You can transfer property ownership to a family member as a gift, meaning no money changes hands. This differs from a Transfer of Equity, where the owner stays on the title and adds someone else to it.

To gift a property, you'll need to complete a TR1 form and submit it to the Land Registry, along with an AP1 form. If neither party is using a Solicitor or Conveyancer, you'll also need an ID1 form.

Remember, gifting a property has significant implications, making it crucial to seek specialist advice from an estate planning expert first. Once you've given the property to that family member, you are no longer the legal owner, and theoretically, your family member could evict you. While this might seem unlikely, unforeseen circumstances beyond your relative's control, such as a divorce, could lead to the property being sold to raise funds, with their ex possibly having a financial claim over it.

Therefore, careful consideration is essential before deciding to transfer property ownership to a family member.

Transfer of title after death

The fate of a property following the owner's death hinges on the presence of surviving joint owners and the nature of the joint ownership, if this is the case. 

If the property was jointly owned as joint tenants, and there's a surviving joint owner, that individual becomes the sole legal owner. However, it's crucial to notify HM Land Registry to update the title and remove the deceased person's name. This involves completing a DJP form and submitting it to the Land Registry along with an official copy of the death certificate.

In the case of joint ownership as tenants in common, the Land Registry will also need to update the title by removing the deceased person's name. The deceased person's share will be safeguarded by a restriction on the register and will become part of their Estate.

In the absence of a surviving joint owner, the property's administration follows the terms of the Will, if available, or the rules of intestacy if not. If a Beneficiary is entitled to inherit the property, they can facilitate the transfer through a process called an Assent.

For an Assent, an AP1 form and an AS1 form must be submitted to the Land Registry along with the grant of probate or Letters of Administration. The correct fee should also be included, along with the ID1 form if not represented by a conveyancer.

Engaging a probate property conveyancer can be beneficial in assisting with the Assent process for a probate property.

Transfer of title with a mortgage

If you have a mortgage, things can get more complicated. It is absolutely possible to transfer ownership of a property with a mortgage, however the mortgage will either need to be paid off or the new owner will need to pass the lender’s eligibility checks.

All parties involved, including the current owner (transferor), the new owner (transferee), and the mortgage lender, need to be in agreement.

The existing mortgage lender must be informed about the intention to transfer the title. This is usually done by the current owner, and it's important to check with the lender if there are any specific requirements or conditions.

The mortgage lender will need to give consent for the transfer. They will assess the financial situation of the new owner to ensure that they can take over the mortgage responsibility.

Depending on the arrangement, the transfer of title with a mortgage can be done through a "Transfer of Equity" or a "Remortgage" process:

• Transfer of Equity: This is the process where the current owner's share in the property is transferred to the new owner. The existing mortgage remains in place, and the new owner assumes responsibility for the mortgage payments.

• Remortgage: In some cases, the existing mortgage is paid off, and a new mortgage is arranged in the name of the new owner. This may involve refinancing the property.

Legal documentation, including a Transfer Deed and possibly a new mortgage agreement, needs to be prepared and signed by all relevant parties. It's advisable to seek the assistance of a solicitor or conveyancer to handle the legal aspects.

The change of ownership must be registered with the Land Registry. This involves submitting the necessary documentation and paying any required fees.

If the existing mortgage is being replaced with a new one, the funds from the new mortgage are used to repay the existing mortgage.

Do you need a solicitor for transfer of title?

it is not a legal requirement to use a solicitor for the transfer of property title, however it is highly advisable and commonly practised. The process of transferring property ownership involves legal complexities, and having a solicitor or a qualified conveyancer can help ensure that everything is done correctly and legally.

How much does it cost to transfer a property title?

The cost of transferring a property title can vary based on several factors, including the value of the property, the complexity of the transaction, and the fees charged by the professionals involved.

According to average conveyancing fees data, transfer of title could cost up to £5,298 with an addition of 1%-5% of the property value, depending on the circumstances. This is based on the average price value of £277,000. 

It's essential to obtain a detailed quote from a solicitor or conveyancer, outlining all anticipated costs and fees. This can help you understand the total cost of the transfer and avoid any unexpected expenses.

There are some additional costs and disbursements payable to third parties that could affect your overall costs, including:

Charge for sending funds via bank transfer: £30 plus VAT per bank transfer (e.g., redemption of mortgage and payment of net proceeds to you on completion). These fees are payable to third parties and pertain to your purchase.

Up-to-date Land Registry title entries: £6.00 per title.

Land Registry pre-completion search: £3.00 per title.

Bankruptcy search: £2.00 per party and per person contributing funds (if applicable).

HM Land Registry fee: This varies based on the "consideration" (the sum being paid, including any existing mortgages) and/or the value of your property. 

You can calculate the amount using the Land Registry website. 

Electronic submission of Stamp Duty Land Tax (SDLT), if required: £4.80.

Electronic submission of Land Registry application: £4.80.

Archiving fee: £10.00 plus VAT.

Electronic identification/AML check per name: £7.20.

Stamp Duty Land Tax or Land Tax: This depends on the "consideration" changing hands, i.e., any funds being paid and any existing mortgage.

For England, you can calculate the amount using HMRC's website. If the property is in Wales, use the Welsh Revenue Authority's website to calculate the Land Tax payable.

Anticipated Disbursements

These fees vary by property and can sometimes exceed the provided ranges. An accurate figure can be provided upon reviewing your specific documents. 

The following may apply if the property is leasehold or involves a management company:

Companies House Fee: £15.

Landlord's notice fee: As outlined in the lease, often ranging from £50 to £100 plus VAT.

Landlord's deed of covenant fee: Provided by the property's management company, and the cost can be estimated between £100 and £200 plus VAT.

Landlord's certificate of compliance fee: To be confirmed upon receipt of the lease, with costs ranging from £100 to £300 plus VAT.

Remember, the above costs and property transactions may be subject to changes in government policies, such as updates to stamp duty rates, so it's essential to be aware of the current regulations and most up to date costs involved. 

How long does a transfer of title take?

The full transfer of title commonly takes between four and six weeks. However, this will naturally depend on the speed that your conveyancer works (if you are using one). A alrge part of the timeline will also depend on the mortgage providers involved and other third parties completing their duties within good time.

Do you pay stamp duty on transfer of title?

Stamp Duty Land Tax (SDLT) is generally applicable to most property transactions, including the transfer of property titles. The amount of SDLT you pay depends on various factors, such as the purchase price of the property and whether you already own another property.

Some key points related to SDLT and the transfer of property title are:

Gifts and Transfers Between Family Members: 

While there is usually no SDLT when gifting a property between family members, there are exceptions, and it's important to consider potential tax implications of gifting property.

Transfers Resulting from Divorce or Separation: 

In some cases, if a property is transferred as part of a divorce or separation settlement, there may be relief from SDLT.

Transfers Involving No Money Changing Hands: 

If the transfer involves no money changing hands (e.g., a gift), SDLT may still apply based on the market value of the property.

It's crucial to seek professional advice from a solicitor or conveyancer to understand the specific SDLT implications in your situation. The rules and rates can change, and professional guidance ensures that you are aware of your obligations and can plan accordingly. 

The HM Revenue & Customs (HMRC) website or a tax professional can provide up-to-date information on SDLT rates and exemptions.

What documents do I need for transfer of title?

The specific documents needed for a transfer of title can vary based on the circumstances involved as discussed above. 

A a general list of documents that may be required are:

• Transfer Deed (TR1)

• Official Copy of the Title Register

• Official Copy of the Title Plan

• ID1 Form

• Mortgage Deed (if applicable)

• Death Certificate (if applicable)

• Power of Attorney (if applicable)

• Forms for Land Registry

• Financial Documents (if applicable)

Do you need proof of insurance to transfer a title?

There isn't a standard legal requirement in the UK to provide proof of insurance when transferring the title of a property. The primary focus during a property transfer is on legal and ownership matters. However, the situation can change, and it's essential to check with your solicitor or conveyancer for the most up-to-date information, as requirements and regulations may have evolved since then.

While insurance may not be a mandatory part of the title transfer process, it is generally advisable to have appropriate insurance coverage in place for the property. This includes buildings insurance to protect against damage or loss to the structure of the property. Lenders often require evidence of insurance coverage when a mortgage is involved.

Additionally, even if not legally required during the title transfer, insurance is a critical aspect of responsible property ownership. It helps protect the owner and their investment in case of unforeseen events, such as fire, flood, or other types of damage.

Does a transfer of title need to be notarised?

Notarisation is not a standard requirement for transferring the title of a property in the UK. 

While notarisation is not a standard requirement for property transfers, it's important to note that certain legal documents, such as a power of attorney or an affidavit, may require notarisation. The need for notarisation can depend on the specific circumstances of the transaction and the requirements of the parties involved.

If you are involved in a property transfer, it's advisable to consult with your solicitor or conveyancer to determine the specific documentation requirements for your situation. They can guide you on whether notarisation is necessary for any of the documents involved in the process.

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