Adding children’s names to house title and deed. How it can affect your property taxes, income taxes and real estate taxes.
Q: I currently own a home that is paid in full, with no mortgage. I want to add the name of my daughter to the house deed. Would you be able to tell me the pros and cons of this decision in terms of property taxes?
Adding Children’s Names to House Title and Deed
A: The question we get most often on this topic is how does adding a child’s name to the title of the property affect taxes. Usually, homeowners want to understand your issue when it comes to federal income taxes.
Just in case you were not aware of the larger issues involved when gifting a piece of property, here’s a brief summary of some of the tax issues involved. Giving a significant gift of more than $14,000 in 2016 or 2017, which is the amount anyone can give anyone else without triggering a taxable event, affects a variety of tax issues.
How Adding Children’s Names to House Title and Deed Affects Taxes
Let’s start with property taxes. If your home is your primary residence, it should be considered an owner-occupied property. This designation is important as real estate taxes in many locations depend on whether your home is owner-occupied, a rental or investment property. Some states lower your property taxes significantly when you own the property as your primary residence. In some of these states, you pay a significant amount to your state government in state income taxes but get the benefit of lower real estate taxes.
In other states, if you live in the home as your primary residence, you get a standard reduction in your real estate taxes and, if you are a senior citizen, you might get an additional real estate tax break. Depending on the local tax rules where you live, you may find that adding your daughter to the title will not change anything as long as you continue to live there.
You need to know that some states use a property transfer to readjust the real estate tax valuation for the home. We’re not talking about a small change. If the taxing authority has your home’s real estate taxes pegged at the home’s value from 30 years ago, you can be sure they will try to do what they can to bring the home’s value in line to where they think it should be now, and your tax bill will reflect that change.
Weighing the Pros and Cons
The short answer to your question is that the addition of your daughter’s name on title will either leave things the same for you in terms of real estate taxes or increase your future real estate tax bills. We don’t see a benefit in adding your daughter to the title to the home unless you don’t live in the home and you can get the benefit in your area of a reduced real estate tax bill by having her live in the home as her primary residence.
An Example
For federal income tax purposes, if you simply add your daughter’s name to the title, she receives the gift at your cost basis. For example, if you paid $100,000 for the property and it is now worth $500,000, and you give your daughter half of the house, her cost basis would be $50,000. When she goes to sell the property, she would be entitled to the $250,000 exemption is she is single and lives in the property as here primary residence. However, if she isn’t living in the property when it is sold, she might have significant capital gains taxes to pay.
What we’re trying to say is that simply adding a child’s name to a property can be problematic and costly in the end. Before you move forward with the transfer, talk to your local tax assessor’s office (treasurer’s office or clerk’s office that handles the real estate taxes for your home) and see if they can give you some guidance on the impact the transfer will have on your property’s real estate taxes. You can also talk to a real estate tax attorney or specialist in your area and get more information.
As you decide what to do, you should also talk to an estate planner and decide whether you are better off putting your home in a trust and have your daughter inherit the home when you die. You have quite a number of options and should probably walk through these options with an estate planner or estate attorney to see what fits your plan best.
More on Topics Related to Titles, Deeds and Family Matters
Parents, Children, Estates and House Title. How Does Property Title Pass After Death?
Will Adding Child to Title Increase Property Taxes?
What’s the Best Way to Hold Title on Your Home?
Selling Your Home After Your Spouse Dies Doesn’t Mean You Have to Change the Title
What’s the Best Way to Transfer a Home Title to a Family Member Who’s Been Living in the Home?
Will Title Insurance Save This Homeowner From Paying an Outstanding Private Mortgage?
You forgot to address the issue of capital appreciation. Here in Manhattan, apartment prices go nowhere but up. I can transfer my $1.8mm apartment (bought at $1.4mm) to my 2 yr old daughter now. Or I can transfer the same $10mm apartment to my 18 year old daughter in 15 years. Problem then is that the $10mm hits upon the $5mm estate tax transfer,so 35% of the remaining $5mm will be confiscated by the IRS.
Same thing with stocks and bonds. Better to transfer early on now than to wait until they appreciate and eat into that $5mm cap.
In Alameda county,Ca to add the name of only child on the primary residence does
not change the property tax. This property is also her primary residence which was bought 40 yrs ago. It is also under Prop 13 passed in 1975 which limits the property taxes to 1 to 2% per year on the original purchase price. As long as she stays the property is not reassessed and does not change the title if the father passes away, this is according to assessors office . I do not know how it affects federal taxes. it is not a quit claim. If the lean is against the property and original mortgage was with the primary owner, then what are the rights of the mortgage holder if original property owner dies, Can the bank take over the property ?
With having 2 names on a deed does it matter if it is “Marv and Ursula” or “Marv or Ursula” for probate .
I am the only name on the title of my home. it is paid in full. how can I make by beneficeries my 2 sons?
my name is the only name on the title of my home. how can I add my 2 sons as beneficeries?
Hi Ilyce,
The house we live in was left to my mother-in-law in a divorce in Texas. She has left the house to my wife in a will. However, my wife’s father has taken my mother-in-law’s name off title after divorce….even though he lost it in the divorce. He keeps saying he is going to make us pay him rent or kick us out. We pay the taxes and my wife has lived in this house her whole life. My mother in law lives in Odessa and we are in Irving(at the house). I have been here 11years. He keeps saying he’s going to sale the house, as well. My wife keeps crying and stressing out about this. What can we do? We wanted to get his name off title(house is paid for). Should we get her mom’s name back on title? Should we put my wife’s name on there, too?(since her mom hasn’t lived in the house for over 5 years). We are lost and confused. If we get her mom’s name back on title do we just set up a trust with my wife being sole beneficiary? Please tell us what we should do!
Thanks
Ronnie:
You may have to sue your father in law. If your mother-in-law received the house in the divorce, then she should own it. But she may have to sue her ex-husband to get it. You and your wife are sort of irrelevant (other than this is your home) because your mother-in-law is still alive. It doesn’t matter what she has put into her will since that can change at any moment.
Your mother-in-law will have to fight this. Otherwise, your father-in-law will control the property (illegally, from the sound of it).
Please seek the advice of a local but good real estate attorney quickly.
Ilyce
how do I go about putting or adding my children to my property deed and what form do I use?
Our daughter lives in Indiana and we the parents live in Illinois
We own the home our daughter lives in in Indiana. So the Indiana property is an investment property for us.
We want to add our daughter’s name to the home deed.
With her name on the home deed we can get the homestead property tax break with her name on the Indiana property. The tax break is for Indiana property owners.
How to we get her name on the home deed?
My daughter and I bought the house togrther 23 years ago. At the time her credit wasnt up to par so we put the title in my nsme intending to add hers later. She has lived here every day sunce we purchased the house and has made the mortgage payments through my bsnk account. We just never thought much about the paper work. But, noe Im getting older and afraid if somrthing happens to me with her name npt on the title she will have unecoected and grezt expenses. Which would be best adding het now ot gifting through my will?The property is valued at $475,000.
Hello I wanted to know what did you guys do I have a similar situation.
Thank you
I want to add my daughter to my deed, she lives with us taking care of her mom. I live in California own my home free & clear, it is homsteaded, & prop 13 will I lose the breaks ?
Please don’t add your daughter to your deed. I’m not sure why you’d want to do that, when it could cause a taxable event for her down the line after you and the other homeowners die. As for losing the homestead exemption, that probably won’t happen, but if you have a senior exemption, adding her could put that at risk.
(California has a number of tax breaks available to seniors age 62 and older. This website runs down help with property taxes that is available to California residents. For example, California’s Property Tax Postponement Program allows seniors or disabled persons with an annual household income of $53,500 or less to apply for a postponement of property taxes on their principal residence. You can file an application with the State Controller’s office.)
The biggest issue, though, are taxes. If you add your daughter to the deed, then die, she may have to pay taxes on half of the value of the property that you essentially “gifted” to her when you put her on the deed. It would be much better to put the property into a trust, name her as the beneficiary, and move on. You’ll preserve your exemptions and when the time comes, she’ll inherit the property at its market value as of the day of death, rather than only half. the IRS has provisions in place to protect her from paying any estate taxes and in any case, you’ll be able to pass down more than $5 million tax free, which should cover the property. Good luck!
My mother 89 wants to give me her home for exchange I take care of her and she doesn’t have to go in a nursing.I am already giving up my life.How am I going to be effected by this.Or should I buy it from her
My husband and I have a rental with a mortgage. We bought this about 16 years ago. Our daughter is the only one who has lived in this home. She has always paid the rent which includes the taxes and insurance. Our home is paid off. If we put her name on the title and deed on the rental would that make it legal to file a homestead on the rental? Thank you Sherry Baker…I know I need to check with a bank to see if I can add her name.
My mother and I are both on the title of the house. The house is paid off. My mother is also abusive and I am disabled. She has threatened to get an attorney and throw me out of the house. Can she legally do this, when I reside in the house, maintain it, have made multiple improvements to it and continue to plan to make further improvements. For a time I did not reside there and my mother allowed a tenant to move in who was dealing drugs out of our home. She didn’t advice me about this decision and then claimed I had no rights to be involved as to who rents the house. If my mother allowed to remove me from title simply because she wants to hurt me?
I put my three daughters on my deed as joint tenants. One daughter wants me to sell so she can get “her share” in the house. Do I have to sell my house? Can I take her off the Deed? Thank you
I bought a townhouse no mortage..my daughter wanted her name on deed since she lives there and needed for school.
I now need the cash since I am 66 years old want to sell. She stated I can’t because her name is on the deed…she did not give any money to the purchad. I live elsewhere
Do I have any recourse
My father owned a home and put my brother’s name on the deed for homestead exemption purposes and my father died, who does the house go to?
My son name on a quick claim deed Detroit be a I almost passed away he move out but I’m still living in the home that is my home what can I do to get the taxs lower because I’m disabled
Can I sell my house at what I own but not the value?
Mortgaged house can we add names to title/ deed to avoid the sale of home by an evil child
Hi Angie Gallegos,
The extra charges of a government on the purchasing of property in the country can be eliminated in the form of general tax easily with in a seven days according to the rules and regulations of a government,If you write an application with the authentic reasons for a elimination of property tax and also attached a legal documents of a property tax pairs after that submitted in the government office by the tax layers which is helpful for you to approved the claim of your property tax in the seven days without any allegations of a government on the application of your property tax ,Remember don’t write any irreverent reasons in the applications of property tax you want to submit in the office of government and also don’t attached any illegal or extra document of property which increase the chances to refuse or neglect your claim application ,So keep it in your mind all the instructions and requirements given to you by the tax layer after concerning this kind of matter according to the current policy of government .
Thanks.
I have an physical abusive male used to be physical but now very loud verbal and I am trying to get out. I want to change my half to my son who has lived with us 42 yrs. Without costing anything. How can I get out of the house and put my son’s name on my part HALF .
I am my mother’s POA (durable). She owns a house in Texas and her name is on the deed. She has no mortgage. She lives in the house with my sister who cares for her. I bought the house as my mother’s POA several years ago.
I’d like to change the deed names to my mom’s four estate beneficiaries (which includes me) and remove my mom from the deed. I’m trying to establish Texas residency for myself so that my daughter can attend a university in Texas with in-state tuition. If all beneficiaries agree to this, could this be done?? And how might this affect taxes for each of us? (We all live in different states. If you have other suggestions, please let me know. Thanks!
My mother is 84 wants to put me on the house tiltle. The house is paid for. She is worried when she dies I will have to pay taxes on it. She lives in Illinois. How do you go about doing it.
Mike,
Putting children on the title to a property is one of the biggest mistakes parents make. You don’t want to do this. Your mother can pass down, on her own $5.6 million in property, cash and other assets in 2018. Since she can pass this down tax free, you don’t need to be on title. If she wants you to avoid the costs of probate, she’s far better off setting up a simple trust and then naming you as the beneficiary. Then, the property will pass to you, tax free, upon her death – even if she doesn’t have a will.
Good luck.
Ilyce Glink, Publisher
ThinkGlink.com
Hi if my mom puts her home in a trust in my name as beneficiary and she has to go in a nursing home at some point. Can the nursing home take the home to use as income?
It depends. There is currently a 5-year lookback period for Medicaid patients, where a judge can unwind a trust or even a sale if the court believes that it was done or set up to avoid this scenario. So, if something happens to your mom within the five years after she puts the property in a trust, it could be unwound – I’m not saying it would for certain. You should speak with an elder law attorney to help you sort through the legal issues.
Thanks for your question.
Ilyce Glink, Publisher
ThinkGlink.com
My name and my mothers name are on the title she has passed but there is a trust and an estate open . I received a 1099-s in my name so now it looks as though I have to pay taxes , should the 1099-s be in the estates name ?
My Dad owned the home we grew up in. In 1990, he signed over the house to me and 4 other siblings. He lived in the home until his death in 2001. The house was empty for a few years until I got divorced. I moved in with my twin boys in 2004. Since then I have paid all bills, including taxes. Also, the siblings owned 2 other pieces of properties, which have been sold. The money was divided somewhat equally between us. Since then, 2 of my siblings have passed, and the oldest sibling is now living with me. That same oldest sibling was having hard times, picked up and left to live in New York with her son and his family. I live in Pennsylvania. The NY move wasn’t working out, so my demonic sister, who lives in Las Vegas for 40 years, took her in. The Vegas sister is ALL about money, and when my older sister went there, the money she received for the other 2 properties went into the bank in Vegas. She did not have her own account, so Vegas sister put it in her own account.
While living in Vegas, (I must mention that those 2 siblings hadn’t spoken in over 10 yrs.), things changed when Vegas sister decided (in her own sick mind), that she wanted me evicted and wanted the oldest sister to sign papers agreeing to this. Oldest sister, whom I have always been closest with, refused. Vegas sister became enraged and didn’t speak to eldest sister while she remained there. She sent me threatening emails, and after receiving many, told her where to go and how to get there. Those were the last ‘words’ ever spoken. After using oldest sister’s money for a down payment of a new house, Vegas sibling informed her she could no longer stay there.
Finally, oldest sister came back to PA. and moved in with us. She came back penniless, had none of her vital papers or ID, and the Vegas sister refused to send any money or anything else.
I’ve been reading the advice you’ve given to others, but I have 2 questions. If my sister and I should pass before Vegas sister. can she evict my sons from this house? Should I have a trust that leaves both mine and oldest sister’s share of the house left to them? All I want to do is protect my sons from evil Vegas sister, and they have been paying the taxes since they’ve begun working. Any advice would be appreciated, and thank you in advance.
Charmaine,
You need more help than I can give you. If your evil Vegas sister wants you evicted, she’ll find a way. You need an attorney who can advise you on what rights you and your sibling have, and how to protect them. Good luck, and let me know what happens.
Best,
Ilyce Glink, Publisher
ThinkGlink.com
You mentioned to Mike,
Putting children on the title to a property is one of the biggest mistakes parents make. You don’t want to do this. Your mother can pass down, on her own $5.6 million in property, cash and other assets in 2018. Since she can pass this down tax free, you don’t need to be on title. If she wants you to avoid the costs of probate, she’s far better off setting up a simple trust and then naming you as the beneficiary. Then, the property will pass to you, tax free, upon her death – even if she doesn’t have a will.
Would this be the same route to go for the state of INDIANA to avoid the costs of probate and the property will pass to me, tax free, upon her death?
My home is in my name only and has a mortgage. I would like to add my daughter. I want her to be able to sell the house without it going through probate or being named as executor. Is this possible? If so how would I do this?
Valerie,
Yes, you can do this, BUT PLEASE DON’T. Adding your daughter to title will likely give her a taxable event when it comes time to sell. I’d much rather you set up a revocable trust that names her as the beneficiary. That way, when you die, she gets the house automatically and bypasses probate. In addition, she’ll inherit the property at the current market value. We’ve written extensively about this.
Good luck,
Ilyce Glink, Publisher
ThinkGlink.com
My mother is recently deceased and the home and property she lived in with my father is in their name. I have five siblings and we are wanting to ensure that the property stays within the family. Should we have a beneficiary deed drawn up? What is the best way to handle this situation? The property is located in Arkansas.
I OWN MY 16X80 SINGLE WIDE MOBILE HOME HERE IN SC. AND WANT TOO ADD MY SON. JUST INCASE SOMETHING HAPPENS TOO ME. WE LIVE IN SC.
Georgia:
Adding your son to the deed really isn’t the best way to handle this. You are much better off doing some of the other suggestions in the story, like creating a trust that names him beneficiary. If he isn’t of majority age, the court will have to step in anyway. But, a trust will protect him better.
Good luck.
Ilyce
Hi my dad is on title pf his home and has a mortgage he is on the deed and i’am and my sister but he wants to add me to the title but not the mortgage can he do that and will i get the house when he passes
Hi there, my father and my mother are on the deed of the house, but my mother passed away 10 years ago. My dad does not want the responsibility of the home. he has met someone and have changed a lot so I’m worried that he might sell the house and I will not be entitled to anything. My mother worked very hard and so did I paying this mortgage, please help me!!! He wants to remove my mother remove himself and put my name on the home. I want to know what’s the best way what I should do before he changes his mind and decides to sell. What is the best way I can do this without having to pay so much taxes? or have a significant change, also the mortgage will still be under his name. Can I do this? Thank you so much & I really appreciate your help
Hello so my dad has a house in Ga we are looking to do a quote claim deed and and myself to the deed so I could refinance the house what type of advice could you consider as far as tax go and how would it affect me in the future?
EVERY STATE, AND EVERY SITUATION IS DIFFERENT. PLEASE DO NOT WAIT UNTIL SOMEONE PASSES TO CHECK ON THESE THINGS. IN MICHIGAN, THERE IS A NEW LAW WHEREBY, SHOULD YOU HAVE TO GO INTO A NURSING HOME, THE SALE OF YOUR HOME IS QREATLY AFFECTED IF YOU SHOULD HAVE TO GO ON MEDICAID,, OR ANY KIND OF ASSISTANCE. FIND A GOOD FAMILY ATTORNEY, AND LISTEN TO HIS ADVICE. HIS FEE WILL BE WORTH IT. ALSO, CHECK OUT A “LADY BIRD” DEED.. DO NOT LISTEN TO YOUR REAL ESTATE AGENT, YOUR MINISTER, OR ANYONE ELSE…JUST YOUR TRUSTED ATTORNEY. IN SOME STATES THERE IS SUCH A THING AS “DOWER’S RIGHTS. THIS ESPECIALLY AFFECTS A PROPERTY IF THE WIFE GETS A PERCENTAGE OF THE PROPERTY, SHOULD YOU ADD YOUR SONS NAMES. THANK YOU, AND GOOD LUCK. (A RETIRED REALTOR).
Your comments have been helpful. My mom (81) owns her home in her name, stepfather (81) is in nursing home (Medicaid). Mom runs a small business on her property. A sibling/husband wish to move in with her to take care of her, the business, and the property. Mom wants to protect herself as well as position property to be purchased by sibling/husband. I told her that she may want to sell it to them outright, pocket her money, and distribute to all the kids as she wishes now. But she’s concerned about the sibling/husband then having the power to evict her. Mom doesn’t want the property to have to be sold to cover any potential long-term care she might have down the road.
Any ideas?
I am living in 1 of the houses my parents owns and they are wanting to put my name on the title so I can qualify for homestead exemptions. Would we need to file a quit claim deed? House has no mortgage & it was paid in full already.
I want to add my two kid’s names in my title and deed. I need some advice please because the house is in my name and I’m the one who bought the house and paid in full before I married my husband. Now, he threatens me that if I get divorce from him, he will get half of the house after divorce. What should I do to safe my house from him and leave it for my kids education and future?
i live in Michigan and my question is similar,, my home is paid free and clear, I just want to add my grand daughter to the house deed, she is 13 soon to be 14,, I want her to have my home in case I die,, I was told that you can add at the court house another name on the title as long as they live with you in which she does but I don’t have guardianship, I feel this way she wont have to pay that inheritance tax the gov put on it, or have to go to probate court… how old do a minor be to be added on
My parents are elderly and have under 30,000 left owing on their home and want to put me on the deed. But my concern is, I have children in college and I don’t want this to interfer with their FASA. Their concern is my 40 year old disabled brother. The state bought us all out 6 years ago and he didnt do well with the move and if something were to happen, they want him to stay there so he doesnt have to transition yet again. I am co power of attorney over his health now and will take all over when the need comes. I’m just not sure how to go about this. My dad suggested having one of my older sons move in with them and I juat take care of finances. They also suggested putting one of them on title to keep home safe for brother. I have no idea what the best answer is with this. My 24 year old graduates this year from college and is willing to help and keep paying mortgage if needed, but if his name is put on the title would he then be responsible for hospital bills or others debts?
i have a differant thing i need info on. back in 2012 after a divorce and foreclosure on my house. my dad purchased a house with my down payment. (due to not being legal to own a mortgage myself for 3 years) now we are wanting to add myself to the deed so i can refinance (recomended by mortgage bank) the house out of his name next year. my name is not on the current mortgage. this would make it not a sale for him just refinancing his name off mortgage. i have made every mortgage payment since 2012 purchase. does this make sense or is there another way?
How to remove my son name on our house title? Doses he need to sign him name or not? Before we were sign for added on his name.
Jana
My dad died 1986 and his name and my mom’s name is on the Tittle of the house.
My mom is worried that she might die and the government will take the house since our name is not on the title.
The house is fully paid I am paying for the tax now and the insurance for the house.
My mom want to put my name on the tittle so that she she die the house can be mine.
Please tell me the best way on what to do.
My husband and I own a house in New York. Right now it’s a second home. Our residence is in Florida. We want to add our son’s name to the deed. The house is only worth $135,000. Are there tax consequences for doing this?
Leona,
Why do you want to add his name to the deed? There are other ways to transfer title, if you need to do that.
Ilyce
I added my daughters name on my home tht is mine.i only did tht in case I die.therye is no living will.can I just go back to Cory house like I did and have her name removed just as easy as I added her name
if I put my childrens’ names on the deed with me, how will that effect the sale of residence exclusion when I sell it as my residence?
Delores,
You’d only get to write off the profits for the portion of the property you own.
Ilyce
Currently renting my Indiana townhouse to my daughter while I live with my gf. Just lost my homestead credit so considering adding her to the deed to avoid this going forward. Other than with my death, are there any tax considerations for either of us as a renter and a landlord?