Yes, you can gift your house to your son by signing a new deed and recording it with the county, but the paperwork is the easy part. The harder questions are what you file with the IRS, what your son will owe in capital gains if he ever sells, what happens to any mortgage still in your name, and whether the gift will cost you Medicaid eligibility if you need long-term care within five years. For most families, the answer is still yes, but often through a different legal tool than an outright gift.
How the Transfer Actually Happens
Gifting a house means transferring legal ownership through a deed. The deed names you as the grantor and your son as the grantee, carries the full legal description of the property (usually copied from the existing deed), and states that the transfer is a gift. You sign in front of a notary, and the notarized deed is filed with the county recorder’s office where the property sits. Recording creates the public record that protects your son’s ownership against later claims.
A warranty deed guarantees you hold clear title and have the right to transfer it. A quitclaim deed transfers whatever interest you have without any such promise. Either works between parent and child; a warranty deed gives your son stronger protection if a title problem turns up later.
What Happens if You Still Have a Mortgage
Most mortgages contain a due-on-sale clause that lets the lender demand full repayment when ownership changes. Federal law carves out an exception for family: the Garn-St. Germain Act prohibits lenders from enforcing a due-on-sale clause when a borrower transfers a home secured by a residential lien to their children, as long as the property has fewer than five dwelling units.1Office of the Law Revision Counsel. 12 U.S. Code 1701j-3 – Preemption of Due-on-Sale Prohibitions
Here is what most people miss. The mortgage does not transfer with the deed. Your name stays on the loan and you remain personally responsible for every payment. If your son stops paying, the lender comes after you. Meanwhile, he owns a house with a lien on it that he has no legal obligation to pay. The arrangement works in cooperative families, but circumstances change. Some parents resolve this by having their son refinance into a new loan in his own name, which requires him to qualify independently.
What You File With the IRS
When you give property worth more than the annual exclusion, you have to report the gift. For 2026 that exclusion is $19,000 per recipient.2Internal Revenue Service. What’s New — Estate and Gift Tax Any house will exceed that, so you file IRS Form 709 by April 15 of the year following the gift.3Internal Revenue Service. Gifts and Inheritances
Filing does not mean paying. The amount above the annual exclusion reduces your lifetime unified credit, which for 2026 is $15 million per individual.2Internal Revenue Service. What’s New — Estate and Gift Tax Actual gift tax is owed only once your cumulative lifetime taxable gifts and estate exceed that threshold. For almost every family, the lifetime exemption easily absorbs the value of a home.
If you are married, both spouses can elect to treat the gift as if each gave half, doubling the annual exclusion to $38,000 for the recipient and spreading the taxable portion across both lifetime exemptions.4Office of the Law Revision Counsel. 26 U.S. Code 2513 – Gift by Husband or Wife to Third Party Both spouses must consent on Form 709, and in most cases each files a separate return.5Internal Revenue Service. Instructions for Form 709 (2025) If only one spouse owns the home, splitting is the only way to use both exemptions.
The IRS wants a qualified appraisal or a detailed explanation of how you determined fair market value when you file.5Internal Revenue Service. Instructions for Form 709 (2025) A professional appraisal is the cleanest route and starts the statute of limitations running on the gift. For a single-family home expect roughly $300 to $700, more for complex or high-value properties.
The Hidden Cost: What Your Son Owes When He Sells
This is where gifting a house gets expensive, and it catches most families off guard. When you gift property, your son inherits your original cost basis — what you paid for the home, plus qualifying improvements.6Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust If you bought for $120,000 thirty years ago, his basis is $120,000 even if the home is worth $450,000 today.
If he sells for $450,000, he faces capital gains tax on $330,000 of gain. Compare that to inheriting the same house at your death: inherited property receives a stepped-up basis equal to the fair market value on the date of death.7Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent If the house is worth $450,000 when you pass and he sells for $450,000, his taxable gain is zero. The gap between gifting and inheriting can run into tens of thousands of dollars.
Your son can soften the hit if he actually lives in the house. A homeowner who has owned and used a property as their main home for at least two of the five years before selling can exclude up to $250,000 of gain from income, or $500,000 if married filing jointly.8Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence If he moves in, stays two years, and then sells, much of the gain can disappear. If the plan is a rental or second home, the carryover basis problem hits in full.
Your son should also prepare for a possible property tax increase. Many jurisdictions reassess when ownership changes, which can push annual property taxes well above what you were paying, especially if you owned the home for decades while assessed values lagged market prices. Rules and parent-to-child exemptions vary widely by location, so check with your county assessor’s office before filing the deed.
Medicaid and the Five-Year Look-Back
If there is any realistic chance you will need Medicaid-funded long-term care within the next five years, gifting your home can be a very expensive mistake. Federal law requires states to review asset transfers made during the 60 months before a Medicaid application.9Office of the Law Revision Counsel. 42 U.S. Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets Any transfer for less than fair market value, including a gift, triggers a penalty period of ineligibility.
The penalty is calculated by dividing the uncompensated value of the transferred asset by the average monthly cost of nursing home care in your state.9Office of the Law Revision Counsel. 42 U.S. Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets On a $300,000 home in a state where nursing care averages $10,000 a month, that is 30 months of ineligibility. During that period you pay for your own care out of pocket.
Federal law contains a narrow exception. You can transfer your home to a child without triggering the penalty if that child lived in your home for at least two years immediately before you entered a nursing facility and provided care that let you stay home rather than go into an institution during that period.9Office of the Law Revision Counsel. 42 U.S. Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets States set their own proof requirements and they can be strict. If your son has been living with you as your caregiver, this is worth working through with an elder law attorney well before any Medicaid application.
Alternatives That Often Work Better
An outright gift is not the only way to pass your house to your son, and it is frequently not the best way.
Transfer-on-Death Deed
More than half the states allow transfer-on-death deeds, which name a beneficiary who automatically receives the property when you die, with no probate. You keep full ownership and control during your lifetime, including the right to sell or change the beneficiary. Because the property passes at death, your son gets the stepped-up basis rather than your carryover basis.7Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent The transfer also avoids the Medicaid look-back penalty since you retain ownership until death. If the real goal is making sure your son inherits the house without probate, this tool accomplishes it without the tax drawbacks of a lifetime gift.
Life Estate Deed
A life estate deed transfers ownership to your son now while reserving your legal right to live in the property for the rest of your life. Your son holds a remainder interest and becomes full owner only at your death. Because the property is included in your estate for tax purposes, he receives a stepped-up basis at that point. The trade-off: the transfer of the remainder interest is a gift for gift tax purposes, and because it is a future interest it does not qualify for the annual exclusion. Its value is calculated using IRS actuarial tables based on your age at the time. For Medicaid planning, the life estate deed still counts as a transfer for look-back purposes, so it has to be executed more than five years before any potential application.
Costs To Budget For
No money changes hands in a gift, but the paperwork is not free.
- Attorney fees to draft the deed, review title, and structure the transfer. A straightforward deed runs a few hundred dollars; trust or Medicaid planning costs more.
- Appraisal to document fair market value for the IRS, generally $300 to $700 for a standard single-family home.
- Recording fees charged by the county, usually between $50 and $150.
- Notary fees, modest in every state and capped at roughly $5 to $15 per signature in most places.
- State or local real estate transfer taxes. Many jurisdictions exempt gifts between family, but not all. Check with your local recorder before filing.
- Title insurance. Transferring the deed can void your existing owner’s policy; your son may want to buy a new one.
Combined, these rarely exceed a few thousand dollars for a simple transfer. Fixing a flawed transfer after the fact costs far more, so get the deed, the appraisal, and the Form 709 right the first time, and talk to an attorney before signing if a mortgage, Medicaid, or significant appreciation is in the picture.