The short answer is yes.
You can sell property to anyone you like at any price if you own it.
But do you really want to?
The Internal Revenue Service takes the position that you’re making a $199,999 gift if you sell for $1 and the home’s fair market value is $200,000, even if you sell to your child.
Can I sell my house to my son for a pound?
A There is no legal reason why you can’t sell your home to your son if that’s what you want to do. But to avoid inheritance tax complications you will need to pay him the full market rent for your home, and your son will have to pay the full market value for the property.
How do I sell my house to my son?
The devil’s in the details, but you’ve got options:
- Let your child inherit the house.
- Gift the house outright.
- Finance your child’s purchase of the house.
- Sell the house to your child at a discount.
- Sell the house to your child but continue to live there.
- Let your child assume the mortgage.
- Use a personal trust.
Is it illegal to sell your house to a family member?
It is only illegal to sell your home to relative if you’re doing so to avoid taxes — and doing that illegally. Plus, if you’re selling for an extreme discount, you may be subject to an estate and gift tax, anyway. Otherwise, selling a home to a family member is just like selling your home to any other buyer.
What happens if I sell my house for less than its worth?
But if you’re selling it for more, then you’ll need to pay a capital gains tax on the excess proceeds. When you sell your home for significantly less than its fair market value, the IRS considers the value of that reduction as a taxable gift to your relative—even if no actual cash changes hands.