Alt Inheritance: Selling Your House to Your Child

One sneaky (and 100% legal) way to pass on wealth to your kids? Selling your home at a discounted rate to your kids.

Parents selling homes to children

Now a thing.

See it in the mortgage biz.

Recent example:

•Parent ready to retire
•Home worth $600k
•Sold to kid for $480k

Perks:

•No down payment
•Kid now a homeowner
•Property stayed in the family

This is happening A LOT.

— JOHN | Millennial Wealth (@johnhenry0804) December 26, 2023

You don’t have to do this before you die. If you have a high-trust family, then that could be a good idea.

But otherwise, if you’re going to sell it anyway, and also you were planning on leaving your kid an inheritance of X amount of dollars, you could consider reducing X amount by Y dollars, and subtracting that amount in your home purchase.

When this is a good idea

Scenario one:

• When you’re staying in your house, but plan on leaving to your child when you die
• You 100% trust your child to not be weird or kick you out, ever

Scenario two:

• You want to sell your house anyway and downsize, move, etc.
• You plan on leaving an inheritance to your child of any amount

If you’re in either of these buckets, consider this option.

Recall, you can discount the house to any amount you want. It’s a good idea to get an appraisal ahead of time so you can get an accurate reading of what the size of the gift is you’re actually giving.