How do I add someone to my property's title deeds?
Adding a new joint owner to the title deeds of your home is known as a transfer of equity. Here's how the transfer of equity process works.
Why might I add someone to the title deeds?
A 'transfer of equity' is a legal process where an existing owner of a property (or land) adds or removes one or more other people to the ownership (title) of the property.
You might want to transfer equity in your home or property when you:
Add a new spouse, civil partner or partner to the title deeds
Putting someone 'on the property deeds' means changing the registered ownership of the property at HM Land Registry (HMLR).
When a couple gets married or enters into a civil partnership, it's commonplace to merge financial lives. You can pass your home to your husband, wife or civil partner when you die, without there being any Inheritance Tax (IHT) to pay.
If you are not married or in a civil partnership, you can protect your partner's interest in the property by registering them as a joint owner. This ensures that the surviving does not have to pay any IHT.
See also:
How do I remove someone from my property title deeds?
Gift a property (or share in a property) to a child or partner
Another common reason for transferring equity, is when a parent gifts a property, or share in a property, to a child, or when one partner gifts a property to another partner.
Gifting your property can reduce the value of your estate, thereby reducing or negating the amount of Inheritance Tax (IHT) your children will need to pay.
Read more:
The transfer of equity process
A 'transfer of equity' is where an existing owner of a property adds or removes another person to the title deeds of their home or property.
When transferring equity to add a name to your property's title deeds, your conveyancing solicitor will:
- Obtain and review a copy of the property's title from HM Land Registry (HMLR)
- Prepare the transfer deed (TP1 Form) and other legal documents
- Obtain the necessary consents from the mortgage lender and landlord (where applicable)
- Decide on the right type of joint ownership
- Arrange for all parties to sign and witness the legal documents
- Register the new owner/s interests with HMLR
Read more:
The transfer of equity process in detail
Choosing the right type of joint ownership
If you want to add a new person to your property deeds, you will need to think about what type of joint ownership is most suitable. You will also need to consider the implications for your mortgage.
In England and Wales, joint owners can be either:
Joint tenants
'Joint tenants' each hold an equal share of 50% of the property, and when one person dies, then the sole property ownership automatically goes to the other joint tenant under the 'Right of Survivorship'.
As a joint tenant, you cannot pass on your half of the property to anyone else but the other joint tenant when you die.
Tenants in common
'Tenants in common' can each own equal or different percentage shares in the land or property.
Tenants in common might, for example, collectively decide to adjust the ownership percentage split according to the financial contribution each party will be making.
This percentage ownership each tenant in common has in the property, is known as the 'beneficial interest'.
If one tenant in common dies, their share of the property will not automatically transfer to the other tenant/s in common. Instead, the share would be passed on in accordance with the terms of the will.
Ask your solicitor
There are pros and cons of each type of tenancy. Ask your solicitor to consider your individual circumstances and to advise on the right tenancy options for you and your partner.
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Deed of Trust
A Deed of Trust is a legally binding document that is often entered into at the same the as a transfer of equity. A Deed of Trust outlines the financial arrangements between joint tenants of a property and specifies how ownership shares are divided.
This legal agreement can be particularly useful when individual parties contribute unequal amounts to the property's purchase or maintenance. It details each party's rights, responsibilities, and what should happen if, for example, property is sold or a relationship breaks down.
A Deed of Trust is a simple and cost-effective way to ensure that individual financial contributions and ownership rights are clear, fair and protected.
Read more:
What happens if there's a mortgage?
If you have a mortgage on the property you will need the lender's consent before you can add someone else to the property deeds. The new owner will become equally liable for the mortgage repayments once the transfer takes place.
The lender will require a solicitor to carry out the remortgage legal work alongside the transfer of equity process.
What happens if the property leasehold?
If your property is a leasehold flat or house, you will need to obtain written consent from your freeholder or landlord.
The new owner may be required to execute a Deed of Covenant, for which the landlord is likely to charge a fee.
Your conveyancing solicitor will advise you if a Deed of Covenant is required.
Stamp Duty Land Tax (SDLT)
You will need to consider the broader tax implications of adding a partner to the title of your property.
Depending on the circumstances, Stamp Duty may be payable if the person receiving the equity is talking on mortgage debt, and the chargeable consideration exceeds the Stamp Duty threshold.
In the context of a transfer of equity, chargeable consideration is the amount of debt transferred or taken on (the mortgage) plus the amount being paid for the equity.
Find out how much Stamp Duty will be payable:
Stamp Duty Land Tax (SDLT) calculator
Capital Gains Tax (CGT)
In some circumstances, Capital Gains Tax might be payable on a transfer of equity if a parent is gifting a property to a child, or if a couple is getting married or separating.
Find out if you will have to pay Capital Gains Tax (CGT)
Can I do the legal work myself?
If you are transferring equity on a mortgaged home, the lender will require a conveyancing solicitor to carry out the legal work to complete the transfer of equity.
If there is no mortgage, then you don't necessarily need to use a conveyancing solicitor. The transfer of equity process can be complex, however, and there could be tax and legal implications if you make an error.
Transfer of equity legal fees are relatively inexpensive, so most people prefer to use a solicitor.
How can a solicitor help?
Most people find that engaging a conveyancing solicitor makes the process of transferring equity both straightforward and stress-free.
A solicitor will be able to advise on choosing the best tenancy options, compile the correct documentation, communicate with the lender and other related parties, and ensure that both of your interests in the property are correctly registered.
With the assistance of a solicitor, the process of adding a name to the property title deeds will usually take a few weeks.
