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Habito transfer of equity: q and a’s

  • As things stand I have a joint Habito mortgage with my cousin and am looking into the possibility of him assuming responsibility for the outstanding mortgage and extracting myself from it, so as to enable me to buy a place with my fiance. The outstanding mortgage is in the region 300k, and the property value is in the region 500k. Is this a transfer of equity? Is stamp duty payable?
  • My decree absolute has gone through as is the consent order. Now I must sort out the transfer of equity at the land registry and the Habito mortgage. I have contacted Habito for the transfer of equity application. What are my next steps?
  • I am selling my equity in house in Warwick to my co-owners fiance, they are reapplying to Habito. We are in heated discussion as to who should pay the fees for the transfer of equity. Should this be split or is one party liable for the legal bill?
  • Law month I split up with my ex of twenty years. I'm now living with my mum and dad and she wants to remain in the apartment and pay me off. What percentage am I entitled to. Is it half of the equity after redeeming the Habito home loan? I assume proper valuations are necessary but I really need to be sure that I'm getting I am not being taken advantage of
  • My fiance and myself equally own a investment property. I am a higher rate tax payer. Preferably I would like to complete a transfer of equity into her name with a view to reduce our tax on the letting income. If Habito are fine with this the legal fees are inexpensive. However what happens when we sell? Would my GGT relief be lost.
  • I acquired a house with my cousin in 2009 Since buying the property, we have both got married. We are now intending to do a transfer of equity so my name is taken off the Habito mortgage. There is a meaningful difference between the 'rightmove estimate' and what the property would sell for currently. Can you offer any advice?
  • I am considering refinancing my apartment in Littleborough does my lawyer have to be on the Habito Solicitor panel. The conveyancing also involves a transfer of equity.

Examples of questions in a lawyer form concerning a Habito Transfer of Equity

Has consent been obtained from Habito to the proposed transfer of equity?

If you are adding someone on to the title deeds how do you wish to hold the property? Please provide your instructions by completing and returning a“Joint Ownership Declaration” Questionnaire.

Please provide the name(s) and addresse(s) of anyone to be extracted from the property title?

Who will be responsible for the costs of the Transfer of Equity?

Please let us know of you wish us to draft you Declaration of Trust. If so are you willing to pay for the additional fee (beyond the Transfer of Equity fee)?

Please give the details of anyone who jointly owns the premises with you?

General Advice to read in in addition to the above Habito transfer of equity information :

Tax and Legal

There are numerous potential tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Habito conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold titles

If your property is leasehold, the lease may require that you obtain the consent of the landlord. If such conditions are not complied with you may be in breach of your covenants under the lease. This could trigger the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made as a result of an Order of the Court, then Insolvency Indemnity Insurance is not required. In other situations, where a property is being transferred at less than market value between joint owners, an Insolvency Act Indemnity Insurance policy may be required. This is something that that your lawyer will check with Habito This is because, if the outgoing party is made bankrupt in the future, their Trustee in Bankruptcy could argue that they had transferred the property in order to avoid their creditors and apply to the Court to have the transaction set aside. If this happens, it could affect your lender or a future buyer from you as they would lose the property and the lender may not get back what they have loaned to you. The Insolvency Act Indemnity Insurance policy only protects lenders such as Habito or future buyers from you. If there is no mortgage and the outgoing owner is made bankrupt, there is a risk to you that you could lose your home if the transfer is set aside. The cost of the Insolvency Act Indemnity Insurance policy varies based on the valuation of the property at the conclusion of the transfer of equity conveyancing.
Your property may be repossessed if you do not keep up repayments on your mortgage with Habito.

Preparing the Transfer of Equity with a Habito Mortgage

When it comes to preparing the the Land Registry documents your conveyancer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If Habito is joining in the transfer to release someone from liability, put the release in the ‘additional provisions’ panel if someone is entering into a covenant relating to the charge, place it in the ‘additional provisions’ panel stamp duty land tax is not payable when there is no chargeable consideration for the transfer (Schedule 3, paragraph 1 of the Finance Act 2003). In the case of a transfer subject to a charge (even if the transfer is by way of gift) or if a property has been transferred for no value and there is an associated discharge, HMRC would view this as an assumption of an existing debt by the purchaser (Schedule 4, paragraph 8 of the Finance Act 2003) and stamp duty land tax may be payable if you wish you may state in the ‘additional provisions’ panel that ‘This transfer is made subject to a charge dated… in favour of…’

On form AP1, your conveyancing solicitor should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Content on this webpage is for general information and only applies to England and Wales. It should not be regarded as advice for members of the public who should contact their lawyer,mortgage broker, insurer and accountant for specific advice relating to transfer of equity. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.


Frequently asked questions relating to Habito transfer of equity