You can sell half of your house to your partner, and the mechanics are the same whether that partner is a spouse or not: get the home appraised, agree on an ownership structure, address the existing mortgage, sign and record a new deed, and account for the tax consequences. What changes between spouses and unmarried partners is mostly the mortgage step and, in some places, the property tax treatment. The rest is paperwork done in the right order.
Set the Price With an Independent Appraisal
Before you talk numbers with your partner, hire a licensed appraiser. Because this is a transaction between two people who know each other, the IRS treats it as non-arm’s-length and will look at whether the price reflects real market conditions. Fair market value, in the IRS’s definition, is the price a willing buyer and willing seller would agree on when neither is under pressure and both know the relevant facts.1Internal Revenue Service. Frequently Asked Questions on Gift Taxes
An independent appraisal gives you a defensible number. Sell a 50% interest for materially less than half the appraised value and the IRS can treat the discount as a gift. If you plan to refinance, the lender will order its own appraisal, but getting one done first lets you settle on a price before the bank enters the picture.
Pick a Co-Ownership Structure
You and your partner need to decide how you’ll hold title before a new deed is drafted. Two structures dominate.
Tenancy in Common
Each owner can hold a different percentage. You could keep 60% and your partner take 40%, or any split that matches what each of you contributed. Each owner can sell, mortgage, or leave their share to anyone. When one owner dies, their share passes through their estate, not automatically to the other owner.
Joint Tenancy With Right of Survivorship
Joint tenancy requires equal ownership. With two owners, each holds exactly 50%. When one dies, the survivor automatically inherits the deceased owner’s share without probate. That appeals to committed couples, but it also means neither of you can leave that share to someone else by will. Whichever structure you choose has to appear on the new deed in plain language.
Put a Co-Ownership Agreement in Writing
A separate co-ownership agreement covers what a deed doesn’t. It spells out how you’ll split mortgage payments, property taxes, insurance, and repairs, and it sets a buyout procedure for the day one of you wants out. Without it, a co-owner who wants to force a sale can file a partition action in court, which is expensive and usually produces a below-market sale. A well-drafted agreement heads that off by fixing the buyout price formula, the time the remaining owner has to arrange financing, and what happens if neither of you can afford to buy the other out.
If either of you is contributing more up front or paying a larger share of expenses, document that here. Tenancy in common lets you hold unequal shares, and the agreement is where the reason for the split lives. For unmarried couples especially, this document is the financial safety net that married couples get through divorce law.
Deal With Your Existing Mortgage
If there’s a mortgage on the house, this is usually the hardest part. Nearly all residential mortgages contain a due-on-sale clause that lets the lender demand full repayment if you transfer any ownership interest without consent.2Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions Ignoring the clause can trigger foreclosure, so handle it directly.
If Your Partner Is Your Legal Spouse
The Garn-St Germain Act bars lenders from enforcing a due-on-sale clause when a borrower transfers property to a spouse or child.2Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions You can add a spouse to the deed without lender approval, and the lender cannot call the loan due. The original borrower usually stays solely responsible for the payments unless you also refinance into both names.
If Your Partner Is Not Your Spouse
Unmarried partners don’t get the Garn-St Germain exemption. You have two realistic paths. Ask your lender for permission to add your partner to the title; expect the lender to run credit and income verification on your partner. Or refinance into a new joint loan, which pays off the existing mortgage and puts both of you on the debt. Refinancing is cleaner because it makes both partners legally responsible, but it means a full loan application and possibly a different interest rate.
Plan for the Tax Consequences
Three tax issues can surface: gift tax, capital gains, and property tax reassessment. None is usually a dealbreaker, but each deserves attention.
Gift Tax if the Price Is Below Market
If your partner pays less than fair market value for their share, the IRS treats the shortfall as a gift.1Internal Revenue Service. Frequently Asked Questions on Gift Taxes If half the equity is worth $150,000 and your partner pays $100,000, the $50,000 gap is a gift. You can give up to $19,000 per recipient per year with no reporting.3Internal Revenue Service. Gifts and Inheritances Anything above that means filing IRS Form 709, but filing doesn’t mean owing. The excess counts against your lifetime gift and estate tax exemption, which for 2026 is $15,000,000.4Internal Revenue Service. What’s New – Estate and Gift Tax Very few people actually pay gift tax on a transaction like this.
Capital Gains on the Half You Sell
Selling half of your home may produce a capital gain on that portion. Federal law lets you exclude up to $250,000 of gain on the sale of a primary residence, or $500,000 filing jointly with a spouse, if you owned and lived in the home for at least two of the five years before the sale.5Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence Since you’re only selling half, the gain on that half would have to exceed $250,000 before any tax applies. That exclusion covers the entire gain for most homeowners.
Your Partner’s Cost Basis
Your partner’s tax basis depends on how the deal is structured. Pay full fair market value and their basis is what they paid. When the transfer includes a gift because the price was below market, the rules get more involved: for calculating a future gain, the recipient’s basis is generally the donor’s adjusted basis rather than the amount paid.6Internal Revenue Service. Publication 551, Basis of Assets This matters years later when the home is sold again, so a tax professional is worth calling at the time of transfer.
Property Tax Reassessment
Recording a new deed puts the ownership change into public records, and in many jurisdictions a change of ownership triggers reassessment. If the house has appreciated a lot since the last assessment, your annual property tax bill can jump. Some states exempt transfers between spouses or certain family members; others reassess on any ownership change. Call the county assessor before you record the deed.
Prepare, Sign, and Record the New Deed
The legal transfer happens through a new deed. A quitclaim deed transfers whatever interest you hold without guaranteeing clear title, which works well between partners who already know the property. A warranty deed adds the seller’s guarantee that title is clear, giving the buyer more protection and putting the seller on the hook for that guarantee.
Either deed has to include the full legal names of both parties, the property’s legal description (copy it from your current deed or pull it from county records), and the co-ownership form you chose. Sign in front of a notary public, who witnesses the signature and applies an official seal.
After notarization, file the deed with the county recorder where the property sits. Recording fees vary; $25 to $75 per document is common. Many states also charge a transfer tax based on the sale price or assessed value, with exemptions sometimes available for transfers between spouses or into joint tenancy. Once recorded, the deed is public record and both of you are co-owners on paper.
Update Insurance and Title Coverage
A new co-owner has an insurable interest in the property, and your policies should show it. Call your homeowners insurance carrier and add your partner as a named insured. Skip this and a claim could be delayed or paid to the wrong party because the insurer’s records don’t match ownership. Your lender will also want to see that the policy reflects current ownership.
Your existing owner’s title insurance protects you for as long as you hold an interest, but it doesn’t automatically cover a new co-owner. Your partner should consider a separate owner’s title policy to protect their new interest against defects that predate the transfer. If you refinance, the lender will require a new lender’s title policy in any case.