Selling a House to a Family Member: 2026 UK Guide

By Lisa Hayes · 29 June 2026

Yes — you can sell your house to a family member in the UK, and you can sell it for less than it is worth or even gift it outright. The catch is that HMRC ignores the price you actually agree and treats the deal as if it happened at full market value, so the tax, mortgage and care-funding consequences are based on what the property is really worth, not the family-friendly figure on the contract. Get the valuation, the tax position and the legal paperwork right from the start and a family sale can be one of the cleanest, chain-free moves you will ever make.

I'm Lisa Hayes, and over the years I've helped a lot of homeowners pass a property to a son, daughter, parent or sibling. It usually starts with a lovely intention — "I just want to help the kids onto the ladder" or "Mum wants me to have the house" — and then the questions start piling up. Will I be taxed? Will their mortgage lender allow it? Could the council come after it for care fees one day? This guide answers every one of those sub-questions in plain English, with the current 2026 figures and the official rules behind them.

Can I sell my house to a family member below market value?

Absolutely. There is no law that forces you to sell your home for what it's worth. You're free to sell to your daughter for £180,000 when an estate agent would list it at £250,000, or even transfer it for nothing as an outright gift. This is sometimes called a concessionary purchase, a family sale, or — when no money changes hands — a deed of gift.

The discount you give is, in mortgage terms, "gifted equity". If you sell a £250,000 house for £200,000, the £50,000 difference acts like a 20% deposit your family member never had to save. For first-time buyers in particular, that gifted equity can be the single thing that makes a purchase possible.

But — and this is the part people miss — the friendly price doesn't change how the taxman sees the deal. Because you and your relative are "connected persons", HMRC substitutes the full open-market value into its tax calculations. So before you settle on any figure, you need to know exactly what the property is genuinely worth. A proper free house valuation isn't optional here; it's the number every tax and lending decision hangs off. If you only want a ballpark to start with, our guide on how much your house is worth walks through the methods.

What counts as a "connected person" and why does it matter?

The whole reason a family sale is treated differently from selling to a stranger comes down to one phrase: connected persons. HMRC's Capital Gains manual sets out who that covers, and the net is wide.

For Capital Gains Tax purposes, you are "connected" with:

• Your spouse or civil partner (transfers between spouses living together are a special "no gain, no loss" case — see below).
• Your direct relatives — parents, grandparents, children, grandchildren and siblings.
• Your spouse's or civil partner's relatives (in-laws), and the spouses of any of those relatives.
• Business partners and certain trustees and companies you control.

Interestingly, aunts, uncles, cousins, nieces and nephews are generally not "connected" for CGT in the same automatic way, though councils assessing care fees look at the substance of any gift regardless of the exact relationship. When the buyer is a connected person, the "market value rule" kicks in: the disposal is deemed to take place at market value "regardless of whether any consideration is actually received", as HMRC puts it. That single rule is the foundation of everything that follows.

Do I have to sell at market value — or can I gift it?

You don't have to sell at market value at all. You have three broad routes, each with different consequences:

Whichever route you choose, remember the market value rule means the tax position is largely the same — HMRC works from the true value either way. What changes is the cash you walk away with, the Stamp Duty your relative may owe, and the inheritance and care-fee picture down the line. If a relative is effectively buying at a steep discount, it's worth comparing it honestly against what a professional buyer would offer; our page on selling below market value sets out where the genuine value of a discounted-but-guaranteed sale actually lies.

How much will it cost to sell to a family member?

Selling within the family can save you a fortune in estate-agent fees — there's no marketing, no viewings, no negotiation — but it doesn't make the deal free. Here's where the money actually goes.

• 18% / 24%CGT rates on residential property gains
• £3,000CGT annual exempt amount (2026–27)
• £125,000SDLT nil-rate band in England
• £500–£1,500typical conveyancing fee per side

To model your own numbers before you commit, run the figures through our cost of selling a house calculator, and use the stamp duty calculator for the buyer's side.

What about Capital Gains Tax when I sell to family?

This is the question that catches the most people out. If the property you're selling is your own main home, you almost certainly pay no Capital Gains Tax at all, thanks to Private Residence Relief. The problem arises when the property is a second home, a buy-to-let, an inherited house or anywhere you haven't lived as your only or main residence.

In those cases, because your buyer is a connected person, HMRC calculates your gain using the market value on the day of transfer — not the discounted price you agreed, and not £0 if you gifted it. So you could face a tax bill on a "profit" you never actually received in cash. The gain is the market value minus what you originally paid (plus allowable costs), and current residential rates are 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers following the rates set from 30 October 2024. The annual exempt amount for 2026–27 is just £3,000 per person.

One important exception: transfers between spouses or civil partners who live together happen on a "no gain, no loss" basis, so there's no CGT at the point of transfer. For a fuller breakdown of reliefs and timing, see our guide on how to avoid Capital Gains Tax when selling, and model your exposure with the capital gains tax calculator.

How does Stamp Duty work for a family buyer?

Stamp Duty Land Tax (SDLT) lands on the buyer, and here the rules are slightly kinder than for CGT — because SDLT is generally based on the chargeable consideration, meaning what's actually given for the property, rather than an automatic market-value substitution.

The current SDLT bands in England (since April 2025) work like income tax — you only pay each rate on the slice of the price that falls in that band:

• Up to £125,000 — 0% 0%
• £125,001–£250,000 — 2% 2%
• £250,001–£925,000 — 5% 5%
• £925,001–£1.5m — 10% 10%
• Over £1.5m — 12% 12%

Two scenarios matter most for family deals:

1. A true gift with no mortgage: if you give the property away and there's no outstanding loan, there's usually no chargeable consideration and no SDLT.
2. A gift or cheap sale where the buyer takes on the mortgage: if your relative assumes an existing mortgage of, say, £200,000, HMRC treats that debt as consideration — and SDLT is charged on it, even if no cash changes hands.

First-time buyers receiving a family home still benefit from first-time buyer relief (0% up to £300,000 on properties up to £500,000) provided the deal genuinely qualifies. And remember the 3% surcharge if your relative already owns another property.

Will a mortgage lender allow a concessionary purchase?

If your family member is buying with cash, this section doesn't apply — you can move as fast as the solicitors allow. But most family buyers need a mortgage, and this is where well-meaning deals stall.

Not every lender will accept a concessionary purchase (a below-value sale between family). Those that do treat the discount as the deposit, which is brilliant for the buyer — but they impose conditions:

The practical lesson: get a mortgage agreement in principle from a concessionary-friendly lender before you agree anything in writing. A broker who knows this niche is worth their weight in gold, because a refusal halfway through wastes everyone's time.

What if my house still has a mortgage on it?

An outstanding mortgage on your side adds a layer. Your sale proceeds normally have to clear the loan, so you can't simply sell well below the balance without your lender's agreement. If you sell to your son for £150,000 but owe £180,000, the maths doesn't work unless you make up the difference or your lender consents.

Your options are usually to: repay the mortgage from the sale proceeds (only possible if the price covers it); have the buyer take on the debt where the lender permits (which, as we saw, triggers SDLT on that amount); or settle the shortfall yourself. If you're in financial difficulty and a family sale feels like an escape route, please read our guidance on the genuine alternatives first — a fast, full house sale or a cash house buyer may protect your equity better than an under-pressure family deal.

Family sale vs the open market vs a cash buyer — which is right?

A family sale is wonderful when the relationship and the finances both line up. But it isn't automatically the best route for you. Here's an honest comparison.

The most overlooked column is "emotional risk". Money and family are a combustible mix; a deal that feels generous today can sour if circumstances change. That's why I always say: even with family, do it properly — at arm's length, in writing, with independent advice on both sides. If your real priority is simply speed and certainty rather than keeping the bricks in the bloodline, compare what a verified buyer would offer before you commit.

Does selling to family affect care home fees?

This is the most serious — and most misunderstood — issue in the whole topic. Many people transfer a home to their children specifically to protect it from future care costs. Be very careful here.

If you later need care and the local authority assesses your finances, they can investigate whether you deliberately reduced your assets to avoid paying. This is called deprivation of assets. Crucially:

• No time limiton how far back a council can look
• Intent + foreseeabilitythe two tests councils apply
• Notional capitalthe asset can be treated as still yours

There is a persistent myth of a "7-year rule" for care fees. It doesn't exist. The seven-year rule belongs to inheritance tax, not social care. For care funding, a council can go back as far as it likes and ask two questions: was avoiding care costs a significant motive, and could you reasonably have foreseen needing care when you made the gift? If they decide it was deliberate deprivation, they can treat the home as notional capital — assessing you as if you still owned it — and may even pursue the relative who received it.

Does it affect inheritance tax (the 7-year rule)?

Here the seven-year rule does apply. Gifting a property — or the discounted portion of a family sale — is normally a Potentially Exempt Transfer (PET). If you survive seven years from the date of the gift, it falls outside your estate for inheritance tax entirely. Die within seven years and the gift counts against your estate, with taper relief reducing the tax on gifts made between three and seven years before death.

There's a major trap, though: the gift with reservation of benefit rule. If you "give" your home to your children but carry on living in it rent-free, HMRC treats it as still being part of your estate — so you get the care-fee risk and the inheritance-tax exposure with none of the benefit. To make a gift effective for IHT while continuing to live there, you'd generally need to pay a full market rent. This is genuinely complex territory; if your move is part of passing on an inheritance, our selling an inherited property guidance is a useful companion read.

How do I actually sell my house to a family member? A step-by-step

1. Get an independent valuation. Commission a RICS valuation or get a professional valuation so everyone — and HMRC — works from a defensible market value.
2. Agree the price and the structure. Decide between a full-price sale, a concessionary sale, or a gift, and put the gifted-equity amount in writing.
3. Check the tax position early. Model CGT (seller) and SDLT (buyer) before you commit. A short session with an accountant here saves five-figure surprises later.
4. Sort the mortgage. If the buyer needs finance, get an agreement in principle from a concessionary-friendly lender; if you have a mortgage, get your lender's consent.
5. Instruct separate solicitors. Each side needs independent conveyancing — the same firm can't usually act for both where a lender is involved.
6. Complete the conveyancing. Searches, contracts, the TR1 transfer deed and registration at HM Land Registry proceed much as a normal sale, just without the chain.
7. Report and pay any tax. CGT on residential property must be reported and paid to HMRC within 60 days of completion; SDLT within 14 days.

What about siblings, divorce, and parents buying for a child?

A few common scenarios deserve a special mention:

• Selling to or between siblings. Siblings are connected persons for CGT, so the market value rule applies. If you co-own an inherited home and one sibling is buying the others out, an independent valuation prevents future disputes.
• Selling as part of a divorce. Transfers between separating spouses have their own timing reliefs, and the family courts may direct a sale or transfer. See our dedicated guide on selling a house after or before divorce.
• Parents buying a home for a child. Often it's the parent purchasing and gifting equity rather than selling an existing home. Watch the 3% surcharge if the parent already owns property, and consider whether the child's name alone should be on the title.
• Buying your parents' house at a discount. Great for you, but check your parents' CGT and care-fee position — the generosity that helps you could expose them.

Done thoughtfully, selling your home to someone you love can be deeply rewarding — and far less stressful than a sale to a stranger who might vanish at the eleventh hour. Done carelessly, it can trigger tax bills, lending refusals and family friction. The difference is almost always preparation: a real valuation, early tax advice, the right lender, and independent solicitors on both sides.

If you're weighing a family sale against a quick, certain, fee-free exit, it costs nothing to see the alternative. Start your free, no-obligation valuation and compare a guaranteed cash offer with what a family deal would really leave in your pocket — then decide with all the facts in front of you.