Can You Sell a House to a Family Member? A UK Guide

Can you sell a house to a family member? Yes. There's nothing stopping you from selling your home to your child, sibling, parent or another relative, whether you sell it for its full market value or agree a lower price.

However, keeping the sale in the family doesn't mean you can skip the usual legal and financial steps. You'll still need a solicitor or conveyancer, and selling below market value can have tax implications for both sides.

If you're considering it, getting an independent valuation and professional legal and tax advice before agreeing a price can help everyone understand exactly what they're signing up for.

Can you sell a house to a family member?

Yes. You can sell a property privately to a family member in much the same way as you would sell to anyone else.

You can agree the price between yourselves, including selling below market value. However, your relationship with the buyer can affect how the transaction is treated for tax purposes, so it's important to get professional advice before going ahead.

How to sell a house privately to a family member

You may already have your buyer, but there's still a proper sale process to follow.

1. Get an independent valuation

Start by finding out what the property would be worth on the open market. This is particularly important if you're planning to sell at a discount. Having an independent valuation gives you a clear record of the property's market value and helps you understand the size of any gift you're effectively making.

You can book your free valuation with Purplebricks to get started.

2. Agree the price

Once you know the market value, you and your family member can agree what they'll actually pay. For example, if a property is worth £300,000 and you sell it to your child for £250,000, the £50,000 difference may effectively be treated as a gift for some tax purposes.

3. Arrange the mortgage

If your relative needs a mortgage, they should speak to their lender or mortgage adviser early. Some lenders have specific requirements for sales between relatives or purchases below market value, sometimes referred to as concessionary purchases.

4. Instruct a solicitor or conveyancer

Even when you know and trust the buyer, both sides need the legal transfer handled properly. The conveyancing process covers the contract, searches, title checks, mortgage requirements and transfer of funds and ownership.

Our guide to Conveyancing for Sellers explains what to expect.

5. Exchange and complete

Once the legal work and any mortgage arrangements are ready, you'll exchange contracts before completing the sale and transferring ownership.

For more on the final stages, here are 8 Steps to Finalise Your Property Sale.

Can you sell part of your house to a family member?

Potentially, yes. For example, you might transfer a percentage share in a property to an adult child while retaining the remaining share yourself.

However, selling part of a property can be more complicated than transferring the whole thing. You'll need to decide how the property will be legally owned and consider the mortgage, tax and future sale implications. If there's already a mortgage secured against the property, you'll normally need to involve the lender too.

This is an area where taking legal and tax advice before changing the ownership is particularly important.

What are the tax implications of selling below market value?

Selling a £300,000 home to a relative for £200,000 doesn't necessarily mean every tax calculation will simply use the £200,000 sale price. Transactions between connected people, including relatives in many circumstances, can be subject to special tax rules.

Capital Gains Tax

Capital Gains Tax (CGT) may apply when you dispose of a property that isn't fully covered by Private Residence Relief, such as a second home or investment property. For CGT purposes, transfers between connected people can be treated as taking place at market value rather than the discounted price actually paid.

That means selling a property cheaply to a family member doesn't necessarily reduce a potential CGT bill. If the property has been your only or main home throughout your ownership and the relevant conditions are met, Private Residence Relief may mean there's no CGT to pay. Tax circumstances differ, so take professional advice rather than assuming a family discount changes your CGT position.

Inheritance Tax and the seven-year rule

Selling a property for less than its market value can create a gift equal to the discount. That gift may be relevant for Inheritance Tax (IHT). Broadly, gifts can fall outside an estate for IHT purposes if the person making the gift survives for seven years, subject to the relevant rules and exemptions.

There is an important catch if you give away a home but continue benefiting from it. For example, transferring your house to your child and continuing to live there rent-free can be considered a gift with reservation of benefit. In that situation, the property can remain relevant to your estate for IHT purposes.

Stamp Duty

Stamp Duty Land Tax (SDLT) is generally a tax for the buyer rather than the seller in England and Northern Ireland. The amount due depends on the chargeable consideration and the buyer's circumstances.

A property given entirely as a gift with no payment and no mortgage being taken on can be treated differently from a sale. If the recipient takes responsibility for an existing mortgage, that debt can count as consideration for SDLT purposes. Scotland and Wales have their own property transaction taxes, so the rules differ depending on where the home is located.

Is it better to gift a property to a family member?

It depends on what you're trying to achieve. Gifting a home removes the need for your family member to pay you a purchase price, but it doesn't remove the need to consider tax, legal ownership and any existing mortgage.

Giving away a property can also have major implications for your own finances and future security. Before gifting a home, it's sensible to speak to a solicitor and an independent tax adviser.

How much can you gift a family member?

There's no simple maximum amount of property you're allowed to give a family member. However, the value of a gift can affect its tax treatment, particularly for Inheritance Tax. The rules are also different depending on whether you're making a straightforward cash gift, transferring property, selling below market value or continuing to benefit from an asset after giving it away.

Transferring property to a child

You can transfer a property, or part of one, to an adult child. You'll normally need a solicitor or conveyancer to complete the transfer and update the Land Registry. If there's a mortgage, the lender will also need to be involved. CGT, IHT and property transaction taxes may need to be considered depending on your circumstances.

How Purplebricks can help you sell to a family member

Selling to someone you already know can remove the search for a buyer, but knowing your property's true market value is still important. Purplebricks can help you understand what your home could achieve on the open market before you decide what price to agree with your relative.

You can book your free valuation to get started.

If you decide an open-market sale makes more sense, you can also Sell your house quickly with Purplebricks.

Don't forget to budget for the legal side of your move too. Our solicitors’ fees guide explains some of the costs you may need to consider.

Frequently asked questions

Do you pay Capital Gains Tax when selling a house to family?

Potentially. If CGT applies to the property, a sale to a connected family member can be treated as taking place at market value for CGT purposes, even if you actually sell it for less. Private Residence Relief may apply if the property qualifies as your main home.

What is the best way to transfer property to a family member?

You could sell the property at market value, sell it at a discount or gift it. The best option depends on your finances, tax position, mortgage and plans for the property, so getting independent legal and tax advice before deciding is important.

Can I sell my house to my son and still live in it?

Yes, but there can be important tax implications, particularly if you sell or gift it below market value and continue living there without paying a full market rent. Get specialist advice before arranging this type of transfer.

Can you sell part of your house to a family member?

Yes, it may be possible to transfer a share of a property to a family member. However, you’ll need to consider how the property will be legally owned, any existing mortgage and the tax implications of the transfer.

Can you sell a house below market value to family?

Yes. You’re free to agree a lower price with a family member. However, the difference between the market value and sale price can effectively be treated as a gift for some purposes, while CGT calculations between connected people may use market value.

If you're asking can you sell a house to a family member, the answer is yes, but it's worth getting the valuation, legal and tax sides right before you agree the deal.