You can buy a house and put it in your child’s name, but in most cases you shouldn’t, and if your child is a minor you can’t finance it through a normal mortgage anyway. A child of any age can hold title to real estate, yet the transfer creates tax, financing, and control problems that usually cost the family more than they save. The biggest hit is capital gains tax: a gifted house carries your original cost basis, while an inherited house resets to market value at your death. Before you sign a deed over, work through what a direct transfer actually costs compared with a trust, a life estate, or simply letting your child inherit.
Can a Minor Hold Title to a House?
Yes. No federal or state law stops a minor from owning real estate. The trouble starts with what a minor can’t do afterward. Minors generally cannot enter enforceable contracts for real property, so a child who owns a house cannot sign a mortgage, list it for sale, or sign a lease. In many states a real estate contract signed by a minor is void from the start, not merely voidable.
Someone has to manage the property on the child’s behalf until they reach the age of majority. Most states let parents act as custodian under the Uniform Transfers to Minors Act or the Uniform Gifts to Minors Act, with the handoff happening somewhere between 18 and 25 depending on the state.1Social Security Administration. POMS SI SEA01120.205 – The Legal Age of Majority for Uniform Transfer to Minors Act (UTMA) If the property is valuable or custody is contested, a court may require a formal guardianship of the minor’s estate, which brings legal fees and ongoing court oversight.
The Mortgage Problem Comes First
Financing is usually where this plan collapses. Fannie Mae’s guidelines require the borrower to take title to the property, sign the security instrument, and be a natural person old enough for a mortgage note to be legally enforceable in that state.2Fannie Mae. General Borrower Eligibility Requirements A minor satisfies none of those conditions.
The workarounds are limited. You can pay cash and then deed the property to your child. You can take title yourself, finance the house with a mortgage, and try to transfer it later, but transferring a mortgaged property normally requires the lender’s consent and can trigger a due-on-sale clause. A conventional mortgage in a minor’s name is not a realistic option.
The Capital Gains Cost of Gifting Instead of Inheriting
This is the number that catches most families off guard, and it is the strongest reason not to put a house in your child’s name during your lifetime. When you gift property, your child takes your original cost basis, not the current market value.3Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust There is a small upward adjustment for any gift tax actually paid on the appreciation, but if the transfer stayed within your lifetime exemption and no gift tax was paid, the basis carries over unchanged.
Here’s what that looks like. You bought the house for $200,000. It’s worth $600,000 when you deed it over. Your child’s basis is still $200,000. If they later sell for $700,000, they owe capital gains tax on $500,000 of gain — at the 15% long-term rate most taxpayers pay, that’s $75,000 in federal tax.
Now run the same numbers on an inheritance. Real estate inherited from a decedent gets a basis reset to fair market value on the date of death.4Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent Same house, worth $600,000 when you die, sold for $700,000. Taxable gain: $100,000. The stepped-up basis at death routinely saves tens of thousands of dollars on appreciating real estate. For a house you expect to keep gaining value, inheriting almost always beats gifting.
Gift Tax Filing and the Lifetime Exemption
Transferring a house to your child is a gift for federal tax purposes. For 2026 you can give up to $19,000 per recipient per year with no filing requirement; a married couple can combine to $38,000. Any real estate transfer will exceed that, so you’ll need to file IRS Form 709 to report the gift.5Internal Revenue Service. What’s New – Estate and Gift Tax
Filing Form 709 usually doesn’t mean paying tax. The excess simply reduces your lifetime gift and estate tax exemption, which is $15 million per individual for 2026.6Internal Revenue Service. Rev. Proc. 2025-32 Unless your combined lifetime gifts and estate exceed that number, no gift tax will actually be due. File the return anyway. Without it there’s no record of the gift, which complicates your remaining exemption calculation years later.
Kiddie Tax if the House Will Be Rented
Putting a rental property in a minor child’s name to shift income to a lower bracket doesn’t work. Under the kiddie tax rules, a child’s unearned income above $2,700 is taxed at the parent’s marginal rate when that rate is higher.7Internal Revenue Service. Topic No. 553 – Tax on a Child’s Investment and Other Unearned Income Rental income is unearned income.
So $20,000 of net rent to your child gets the first $2,700 taxed at the child’s rate and everything above that at yours, reported on Form 8615.8Internal Revenue Service. 2025 Instructions for Form 8615 – Tax for Certain Children Who Have Unearned Income The income-shifting angle disappears.
Financial Aid Takes a Hit
Real estate other than a primary home counts as an asset on the FAFSA, and whose name it’s in changes how heavily it counts. Assets held by a dependent student are assessed at 20% under the Student Aid Index formula, meaning a fifth of the property’s net value is treated as available for college each year.9Federal Student Aid. Student Aid Index (SAI) and Pell Grant Eligibility – 2025-2026 Parental assets are assessed at 12% after an asset protection allowance.
A $300,000 house in your child’s name reduces aid eligibility by $60,000 a year in the formula’s terms, versus roughly $36,000 in yours (less after the allowance). Over four years the difference compounds. If college aid matters to your family, real estate in the student’s name is one of the most expensive titling choices you can make.
You Give Up Control, and Their Creditors Get Access
A gift is a completed transfer. Once the deed is recorded, you don’t own the house. You can’t sell, refinance, or make major decisions without either your child’s consent (if they’re an adult) or court approval (if they’re a minor). For a minor owner, routine transactions typically require a court-appointed guardian of the estate, with attorney fees and judicial oversight attached.
Once your child reaches adulthood, the property is part of their financial picture. It’s reachable by their creditors. A lawsuit, a divorce, a bankruptcy, or accumulated debt can put the house at risk, and you can’t reverse the gift to protect it.
Medicaid Look-Back Can Punish the Transfer
If you might need Medicaid-funded long-term care within five years, gifting the house can trigger a penalty. Federal law imposes a 60-month look-back on asset transfers, and giving property away for less than fair market value creates a period of Medicaid ineligibility when you later apply.10Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
The penalty length is the uncompensated value of the transfer divided by the average monthly nursing home cost in your state, and there’s no cap. A $400,000 house can translate to years of ineligibility. Limited exceptions exist for transfers to a child under 21, a permanently disabled child, or an adult child who lived in the home and provided care that delayed the parent’s need for nursing home placement by at least two years. Outside those exceptions the rule is unforgiving.
Structures That Solve More Than They Break
Most families who want to move a house toward a child during life are better served by an alternative that keeps some control, preserves the stepped-up basis, or shields the property from creditors.
Revocable Living Trust
You transfer the house into a trust naming your child as beneficiary and yourself as trustee. You keep full control during your lifetime, can sell or refinance the property, and can revoke the trust. At your death the property passes outside probate and your child gets a stepped-up basis. It does not remove the house from your taxable estate or protect it from your creditors, because you kept control.
Irrevocable Trust
An irrevocable trust removes the property from your control and, generally, from your taxable estate, and adds a layer of creditor protection. You can dictate exactly when and how your child benefits — at a certain age, after graduation, for specific purposes. The tradeoff is permanence: you can’t unwind it or rewrite the terms without the beneficiary’s consent or a court order.
Life Estate
A life estate splits ownership across time. You keep the right to live in and use the property for life, and your child (the remainderman) automatically takes full ownership at your death.11LII / Legal Information Institute. Life Estate The property avoids probate. Because you retained a life interest, the house is included in your estate under IRC §2036, so your child gets a stepped-up basis rather than your old cost basis. The downside is inflexibility: selling and moving requires your child’s cooperation, because they own the remainder.
Family Limited Partnership
An FLP works for families with more than one property or substantial real estate holdings. You and your spouse serve as general partners with management control, and you gift limited partnership interests to your children over time, potentially using the annual gift tax exclusion to move value in increments. The children own a growing share of the underlying assets without decision-making authority. FLPs require ongoing partnership formalities to hold up under IRS scrutiny.
If You Still Want to Deed the House Directly
The mechanics are straightforward. You’ll prepare a deed — typically a warranty deed or quitclaim deed — naming you as grantor and your child as grantee. Include a full legal description, not just the street address. Sign before a notary; some states also require witnesses. Record the deed with the county recorder’s office. Recording fees generally run $25 to $95. Some states charge transfer or documentary stamp taxes, though family gift transfers are often exempt or reduced.
Get an appraisal at the time of transfer. It fixes the property’s fair market value on Form 709 and protects both of you if the IRS questions the reported number later. Update the homeowners insurance so the named insured matches the titleholder. Property tax bills become your child’s legal responsibility as the new owner, even if you keep paying them in practice.