Frequently asked questions relating to Habito transfer of equity

• Me and a friend got a joint mortgage with Habito on a flat a couple of years ago. I am now looking to get a property by myself and my friend would like to buy me out. Once we have agreed a price what are the next steps? Would there be any potential issue with Habito with him being responsible for the total mortgage rather than only half of it?
• What are the average solicitors fees are for a transfer of equity? I need to transfer equity and remortgage - moving over to Habito - and have been quoted Three Hundred pounds including VAT by Habito's approved lawyer, Have I been over quoted?
• My current mortgage is with Habito. Can I transfer equity to someone less than 18 years old?
• My fiance and I have 50:50 shares in a investment property. I am a top rate tax payer. Ideally I would like to complete a transfer of equity into her name to mitigate tax on the letting income. Assuming Habito are content with this the legal fees are not high. However what happens when we sell? As I would no longer be on the title documents am I giving up my CGT relief.
• When it comes to transfer of equity conveyancing involving refinance with Habito should I be paying VAT on the following: (1) Land Registry fee on the transfer of equity (2) Pre - completion search fee (3) SDLT E submission on the transfer (4) Bank TT fee
• Can I transfer the equity held in my property with my Habito mortgage?
• I am filling out a Habito transfer of equity request and have arrived at the section that asks about defaults etc. I do some debts that I have been clearing since 2008, in fact they have long since disappeared from my credit score. Am I obliged to set these out?

Sample of questions in a conveyancer form relating to Habito Transfer of Equity

Important warnings to consider in further to the above Habito transfer of equity Questions and Answers :

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 properties

Should the tenure of your property be leasehold, provisions in the lease may have a requirement for notices to be served and that you obtain the consent of the freeholder. If such conditions are not complied with you may be in breach of the lease. This could trigger the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made pursuant to 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 conveyancer 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 is dependent on the valuation of the property at the time of completion of the transfer of equity conveyancing.

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 lawyer should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Information provided 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.