Selling house to daughter and still live in house

Yorkie1

OP, in your initial post and the thread title you say you want to sell 100% of the house to your daughter, although she will only pay 50% of the value of it (so the other 50% is essentially a family gifted deposit).

Is this correct - because some of the replies assume you are selling your daughter 50% of the property at its actual value, and retainining 50% ownership for the time being?

The two scenarios pose very different issues.

1. You sell the whole house to her (albeit at an undervalue), which is what you propose.

If she will not require a mortgage then this is relatively straightforward.

However, if she requires a mortgage then she may find it difficult to get one because you are not giving vacant possession upon sale. Lenders do not like this as it means they may have problems in repossessing if need be.

If she has to get a buy to let mortgage because she is not moving in then this will be a regulated BTL, which restricts the number of lenders available. If she is moving in, then it will be a residential product.

2. Selling her 50%.

Again, if she doesn't need a mortgage then fewer problems.

If she does need a mortgage then most lenders are likely to require you to be on the deeds and the mortgage. This may well limit how much they are prepared to lend, and for how long (depending on your current age).


As other posters have mentioned, if you sell her 100% of the house at an undervalue, you may fall foul of the deprivation of assets rules if you need means-tested care or benefits.

Others have covered the IHT / CGT aspects already.

One final point to mention is that if you sell her 100% of the house, you no longer have any interest in it. You lose all your security in your property. If she, for example, has money difficulties then the house forms part of her assets and is at risk - and you'd be at risk of homelessness. If she marries and later splits up, the house will form part of her assets and likewise is at risk.

This is a scenario where I'd suggest that you obtain independent legal advice and she visits a mortgage broker (if a mortgage is needed).