"Can I sell my house to my child for £1?" is a common question among parents looking to help their children buy a home.
With property prices rising, parents often consider selling at a nominal price (i.e. £1) to assist their children in getting onto the property ladder.
While it's possible, there are important tax and legal considerations to gifting property.
In this guide, we'll look at what it means to sell your house to your child for £1, and what you should think about before you do.
Can you actually sell your house for £1?
Yes, you can sell your house to your child for £1.
But technically, you wouldn't be selling it to them. Rather, you'd be gifting it to them.
The £1 asking price is merely a symbol, known as a consideration. This shows that you are receiving something (even if it's a mere one hundred pennies) in exchange for the transfer of ownership to your child.
Transferring ownership of residential property in the UK can be a tax-efficient way for homeowners to support their family members through early inheritance while still alive.
But there are lots of things to take into account. The best way to gain clarity in this situation is to find a property law solicitor who will provide personalised advice for your circumstances.
Get a free case evaluation from our legal assessment team today, who will advise on the best next steps.
Why would I sell my house to my child for £1?
We don't have to tell you just how difficult it is to get on the property ladder right now. The number of first-time buyers who bought a home with a mortgage in 2023 fell to its lowest level in a decade.
This is perhaps one of the most compelling reasons parents choose to sell their house to their kids for a mere £1 now - because they want to do right by their children.
There are several benefits for both you and your child in this arrangement:
For you:
Transferring Assets: Gifting your property while you're alive ensures your child is cared for, and you can witness the impact firsthand.
Asset Management: If you own multiple properties, selling one at a lower price can reduce your tax liability. That being said, you should always seek specialist advice to avoid falling foul of any laws or regulations.
Rental Income: By transferring the property, your child can generate additional income through renting it out.
Helping Your Child: Giving your child ownership helps them enter the property market and save for future investments.
For your child:
Property Ownership: This gives them a significant advantage in a competitive market.
Wealth Accumulation: They can benefit from property appreciation and rental income if they choose to rent out the property.
Mortgage-Free Ownership: Owning the property outright eliminates the need for mortgage payments, allowing them to leverage equity for other purposes.
Alternatives to selling your property to your child for £1
If gifting the property isn't the best choice for you, there are other options available.
Depending on your child's financial situation, you can help them secure a deposit for their own property.
If they're employed full-time and have savings, you can assist them in finding a suitable mortgage. It's important to check with the mortgage lender about their policies on gifted deposits.
Alternatively, you could choose to rent out your property, continue living in it yourself, or decide to transfer ownership at a later date. The decision about your home's future is entirely yours to make.
How can Lawhive help?
Selling or gifting your house to your child is a significant decision that can have a profound impact. It's essential to understand the process and consider all factors before making your choice.
Seeking guidance and advice on property law and the gifting process can help ensure a smooth and positive transaction.
Get a free case assessment from our team and receive a fixed fee quote for specialist assistance from our litigation solicitors. Contact us today to get started.