Deciding to transfer ownership of property to another person is a matter that requires a lot of thought and may require a lot of planning. While the process is typically easier than the purchase or sale of a home, there are additional details to consider.
Mortgages May Need to Be Repaid
If there are no mortgages on the property, transferring property is a straightforward process. All parties sign a transfer deed that is then registered with the land registry. A stamp duty certificate may be needed if the value of the property is more than £40,000.
If there is still a mortgage, additional steps may be necessary. If the mortgage is to be repaid, it will likely need to be repaid before the transfer is completed. This will also require a discharge document and a redemption document to show that the mortgage is paid off.
There are also situations where you may choose to retain the mortgage. The party that you are transferring the mortgage to will retain the responsibility of completing the payments to the lender. However, the approval of the lender is required before this option can be considered. This also applies to situations where you add a party to the title.
Avoiding Claims on the Property
When removing a party from the title, you may need to speak with a legal professional. The process of removing a name from a title after a separation or divorce can quickly become complicated. Your ex may make a claim for his or her share of the property or dispute the transfer. Before you complete the transfer, you may need to retain legal counsel to explore your options.
Adding Names to the Property Title
You may also experience a situation where you want to add a name to the property title. For example, you may choose to add a spouse or family member as a joint owner. This may occasionally require a stamp duty to be paid before the transfer can be completed. This is often referred to as a transfer of equity.
If you choose to transfer the property to another name and remove your own name from the title, no money is changing hands. However, there are additional tax implications when gifting a property. Besides paying the stamp duty, you may need to pay additional capital gains tax.
Always Consult with a Legal Expert
The transferring of property ownership is a legal matter that often includes a variety of complex requirements and paperwork. If you are considering giving away property in Cumbria, you should think about consulting with an experienced solicitor.
Legal experts with experience in property transfers can help explain the risks and the process. Whether you are transferring ownership of your property to a family member or removing a party from the title, always talk to a professional to fully explore your options and to understand your rights and responsibilities.