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Sell house to family member: sale, discounted sale or gift compared for tax and stamp duty

Sell house to family member or gift it? How capital gains tax, stamp duty and inheritance tax treat a full sale, a discounted sale and a gift in England.

4 min read
Last reviewed 4 November 2026
By Your Property Check team

Part 1 of 6

Three routes, three tax treatments

General information, not advice. We read the GOV.UK pages below on 4 November 2026, and this page covers England. Scotland and Wales have their own property taxes. Tax rules change, so check GOV.UK or ask an adviser before you sign.

When you pass a house to a child, parent or other relative there are three common routes. You can sell at the full market price, sell for less than the house is worth, or give it away. The tax bill can differ for you as seller, for the buyer, and later for your estate.

Part 2 of 6

The comparison

Route	Capital gains tax (seller)	Stamp duty (buyer)	Inheritance tax
Sale at full market price	On any gain, as normal	On the price paid	No gift involved
Sale below market value	Market value is used for assets sold for less than they were worth to help the buyer	On the price paid, including any debt taken on	Ask an adviser whether the discount is treated as a gift
Gift	Giving away counts as a disposal, at market value on the date of the gift	Not usually, if there is no payment	Seven year rule applies

Part 3 of 6

Capital gains tax

GOV.UK says capital gains tax is charged on the gain you make, not the money you receive, and that disposing of an asset includes selling it, transferring it to someone else or giving it away. Its market value page says you use market value at the date of a gift, and market value at the date of sale for assets sold for less than they were worth to help the buyer.

If the house has always been your main home, GOV.UK's conveyancing guide says no capital gains tax is usually due where you lived in it as your main home for all the time you owned it, have not let part of it or used part for business only, and the grounds are under 5,000 square metres. Our guide to private residence relief explains the test. If the house is a second home or a rental, GOV.UK's rates page for 2026 to 2027 shows 18% for gains in the basic income tax band and 24% above it, after a £3,000 annual exempt amount. Our capital gains tax calculator runs the sum on your own figures.

Part 4 of 6

Stamp duty for the buyer

GOV.UK says the amount used to work out stamp duty land tax is usually the price paid, but can include other payments. It says SDLT does not usually apply to a gift where there is no chargeable consideration. Taking on a debt counts as a payment, so if your relative takes over your mortgage, that amount counts. Ask the conveyancer whether the transfer needs a return to HMRC.

As an example, we calculated stamp duty for a £300,000 purchase in England with our tested code:

Buyer	Stamp duty on £300,000
First-time buyer	£0
Buyer moving home	£5,000
Buyer with an additional property	£20,000

This applies only where £300,000 is the chargeable amount. For the transfer of just part of a house, see our guide to transfer of equity, and use the stamp duty calculator for other prices and for Scotland or Wales.

Part 5 of 6

Inheritance tax and the seven year rule

GOV.UK's gifts page says no inheritance tax is due on gifts if you live for 7 years after giving them (gifts into a trust are excluded). Gifts made in the 3 years before death are taxed at 40%, and gifts from 3 to 7 years before death are taxed on a sliding scale called taper relief, which applies only if total gifts in the 7 years exceed the £325,000 tax-free threshold. The taper rates are 32%, 24%, 16% and 8% across years 3 to 7.

There is a catch for homes. GOV.UK says if you give something away but still benefit from it, it counts toward your estate. Its example is giving your home to a relative while you carry on living there. There is also a £3,000 annual gift exemption. Read more in our guide to inheritance tax on a house.

Part 6 of 6

Practical points

Get an independent valuation, since market value drives the capital gains tax figure for a gift or discounted sale.
Ask a solicitor how any mortgage on the house will be dealt with.
If the aim is to change who inherits, a deed of variation is a different tool for an inherited property.

This page is general information, not advice. A solicitor and a tax adviser can check how these rules apply to your family and your property.

Our take

Get a defensible value first

Our view: market value drives the answer. It is the figure used for capital gains tax on gifts and discounted sales, so the first step is a value you can defend. Stamp duty depends on the buyer: on £300,000 our example shows £0, £5,000 or £20,000. And a gift is not tax free on day one, because the seven year rule applies.

Your Property Check adds a starting range. Our free house value check gives an honest value range from real HM Land Registry sold prices in your postcode, with the comparable sales shown. It is an estimate, so use an independent valuation for tax.

Check my value

Our opinion, drawn from the facts on this page: not advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.

Questions, answered

Frequently asked questions

Can you sell a house to your child for less than it is worth?

Yes, but GOV.UK says capital gains tax uses market value for assets sold for less than they were worth to help the buyer. The buyer's stamp duty is worked out on the price paid, including any debt taken on. Ask an adviser whether the discount is treated as a gift for inheritance tax.

Do you pay capital gains tax on a gift of a house?

Giving away a property counts as a disposal and GOV.UK says market value at the date of the gift is used. No tax is usually due on your own main home if you lived in it throughout your ownership. The rules differ for second homes.

Does the buyer pay stamp duty on a gift?

GOV.UK says stamp duty land tax does not usually apply to a gift with no chargeable consideration. If the recipient takes on a mortgage, taking on the debt counts as a payment, so stamp duty may apply.

What is the seven year rule?

GOV.UK says no inheritance tax is due on gifts if you live for 7 years after giving them. Gifts in the 3 years before death are taxed at 40%, with taper relief on gifts made 3 to 7 years before death above the £325,000 threshold.

Can I give my house to my children and keep living in it?

GOV.UK says that if you give something away but still benefit from it, it still counts toward your estate. Its example is giving your home to a relative while still living there. Take legal advice first.

Where this comes from

Sources

Last reviewed 4 November 2026 by the Your Property Check team. This page is general information, not legal, tax or financial advice. For your own situation, speak to a conveyancing solicitor or another qualified professional.