How do I Transfer Equity in a Help to Buy Property?
The transfer of equity process can be relatively straightforward, but if ownership is being transferred in a Help to Buy home, there are a few additional points to be aware of.
What is a transfer of equity?
Equity is the value of your interest in your home or property. A 'transfer of equity' is the legal process of transferring ownership of the equity held in a property from one person to another.
Transferring equity in a property is a formal legal process that is usually carried out by a conveyancing solicitor.
What is Help to Buy?
Help to Buy is a government-backed equity loan scheme that helps first-time buyers to buy their first home. Although the scheme will be phased out in March 2023, anyone with an equity loan in place after this date will still have to follow the Help to Buy equity transfer process.
Reasons you might decide to transfer equity
The most common reasons for transferring equity in a Help to Buy property include:
- Divorce or separation - buying out an ex-partner
- A new relationship - adding a new partner or spouse to the title of your property
- Buying out a joint owner - buying out a co-owner (joint tenant) when one of you decides to move
- Inheritance Tax (IHT) planning - Gifting a property (or share in a property) to a child or family member
Transferring equity in a property
The transfer of equity process for Help to Buy properties is broadly similar to transferring equity in any property.
If you decide to transfer equity in a Help to Buy property, your conveyancing solicitor will carry out the following:
| Step | Comment |
|---|---|
| Apply for remortgage or new mortgage | If you intend to remortgage or apply for a new mortgage, speak to your lender or financial adviser. Obtaining a Decision in Principle from the lender will confirm that your existing or new lender is happy with the proposed change in ownership. |
| Review the Title Deeds | The solicitor will obtain and review the property's title documents from HM Land Registry (HMLR). |
| Prepare transfer deed documents | The solicitor will complete the necessary legal documents for the transfer |
| Sign the transfer deed and mortgage deed | The transfer documents are signed and witnessed |
| Transfer funds | The solicitor will arrange for the correct apportionment of any funds and for those funds to be transferred to the relevant parties. |
| Register the deed transfer | The new owner/s are registered at HM Land Registry (HMLR) |
| Complete the Stamp Duty return | If payable, your solicitor will complete the Stamp Duty Land Tax return and file it with HMRC |
See also:
Get a transfer of equity conveyancing quote
Additional steps when transferring equity in a Help to Buy property
Depending on the circumstances, there will be further steps relating to the equity loan to complete:
I want to add a new owner
If you want to add someone new to the ownership of your home, the new homeowner will need to meet the equity loan eligibility criteria. These will be the same criteria that applied to you when you applied for the equity loan.
Specifically, the new owner must be a first-time buyer who does not, or has never owned a property in the UK or abroad.
The new owner will need to pass an equity loan eligibility check.
I want to remove an existing owner
You can remove an existing homeowner from the equity loan as long as:
- the owner/s named on the equity loan and the mortgage will be the same
- the owner/s remaining after the transfer of equity has completed, must be able to show that they can afford to service the mortgage and the equity loan
I want to replace an existing owner with a new owner
If you want to replace an existing homeowner with a new homeowner, the process would be to remove the existing owner and add the new owner in one application.
- The new owner/s named on the equity loan and the mortgage must be the same after the transfer of equity
- The new owner/s must be able to show that they can afford to service the mortgage and the equity loan
- The new owner/s will need to meet the equity loan eligibility criteria. Specifically, the new owner must be a first-time buyer who does not, or has never owned a property in the UK or abroad.
- The new owner will need to pass an equity loan eligibility check.
