Splitting a freehold title

Maybe you have a detached property that is already split in the middle making two semi-detached properties, or you would like to split the property into two separate properties, the question is can you, and how to, split the freehold title.

Firstly you can split the freehold title of a detached property. It is known as a 'title split', and involves splitting the property into two separate freehold titles. It is advisable you speak to a solicitor if considering a 'title split', as it requires submitting the necessary documentation (AP1) to HM Land Registry, amongst other things. There are fees involved for land registry changes.

Speak to your local planning authority to ensure you won't require any planning permission, which is unlikely unless you are thinking of changing things structurally. If you are thinking of structural changes or even if not, it is also likely you will need a surveyor to draw up detailed plans of the proposed split, showing the boundaries of each property. In terms of the boundaries, you should ensure that each property has its own utilities, or a way to clearly separate usage.

In terms of financing or a mortgage, once the property has been split you can apply for a mortgage for each separately, as they will now be valued as separate properties, whereas you will not be able to do this before the official split, if wanting to finance the two independently. If the property is already mortgaged then you will need to speak to your lender before considering a 'title split' to ensure they are happy for this to happen. Some lenders have different rules on this matter.

Splitting a title shouldn't mean you will be paying extra stamp duty, as this is only applicable upon purchase.

It is worth noting that if you sell one or both properties in the future capital gains tax, CGT, may apply on any increased value. Speaking to a tax advisor is highly recommended, especially if you are thinking of selling or renting one, or both of the properties out. Putting the properties into a limited company is worth considering.