Yes, you can sell half of your house to your partner, and the transaction itself is legally straightforward. What takes work is doing it correctly: getting an appraisal, choosing how the two of you will hold title, handling your existing mortgage, transferring the deed, and planning for the tax consequences. The single biggest variable is whether your partner is your legal spouse, because federal law treats spouses and unmarried partners very differently when it comes to mortgage transfers and gift tax.
Get an Independent Appraisal First
Before you settle on a price, hire a licensed appraiser to establish the home’s current fair market value. Because you and your partner know each other, the IRS treats the sale as a non-arm’s-length transaction and will look at whether the price reflects real market conditions. The IRS defines fair market value as the price a willing buyer and a willing seller would agree on, with neither under pressure and both having reasonable knowledge of the facts.1Internal Revenue Service. Frequently Asked Questions on Gift Taxes
A defensible appraised number protects both of you. If your partner pays substantially less than half the appraised value for a 50% interest, the IRS can treat the discount as a taxable gift. If you plan to refinance, the lender will order its own appraisal anyway, but having one in hand first helps you agree on a price before the bank enters the picture.
Choose How You’ll Hold Title Together
You and your partner need to pick an ownership structure before the new deed is drafted. There are two common options, and they behave differently.
Tenancy in Common
With tenancy in common, each owner can hold a different percentage. You could keep 60% and your partner take 40%, or any other split that matches what each of you contributed. Each owner can independently sell, mortgage, or leave their share to anyone they choose. If one owner dies, their share passes through their estate rather than automatically going to the other owner.
Joint Tenancy With Right of Survivorship
Joint tenancy requires equal shares. With two owners, each holds exactly 50%. The distinguishing feature is what happens at death: the surviving owner automatically inherits the deceased owner’s share without going through probate. That automatic transfer makes joint tenancy popular with committed couples, but it also means neither partner can leave their share to anyone else through a will. Whichever structure you choose has to be stated explicitly on the new deed.
Put a Co-Ownership Agreement in Writing
A co-ownership agreement handles everything a deed doesn’t. This separate document spells out how you’ll split the mortgage, property taxes, insurance, and repair costs. It should also include a buyout procedure for a breakup or a decision by one owner to exit. Without one, a co-owner who wants to force a sale can file a partition action, which is expensive and often ends in a below-market sale. A well-drafted agreement sets the terms in advance: how the buyout price is calculated, how long the remaining owner has to arrange financing, and what happens if neither person can afford to buy the other out.
If you’re contributing unequal amounts to the purchase or ongoing expenses, document that here. Tenancy in common allows unequal shares, so the agreement can reflect that one partner owns 60% because they paid more. For unmarried couples in particular, this is the financial safety net that married couples get through divorce law.
Handle Your Existing Mortgage
If the home has a mortgage, this is usually the trickiest piece. Nearly all residential mortgages include a due-on-sale clause allowing the lender to 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 it can trigger foreclosure, so address it directly.
If Your Partner Is Your Legal Spouse
Federal law gives married couples a real advantage. The Garn-St Germain Act prohibits lenders from enforcing a due-on-sale clause when a borrower transfers property to their spouse or children.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 your lender’s permission, and the lender cannot call the loan. Your spouse becomes a co-owner on title, though the original borrower typically remains solely responsible for the payments unless the loan is also refinanced into both names.
If Your Partner Is Not Your Spouse
Unmarried partners don’t qualify for that exemption. You have two realistic paths. The first is to contact the lender and ask permission to add your partner to the title; the lender will likely require credit and income verification to confirm your partner is a reliable co-borrower. The second is to refinance the mortgage into a new joint loan under both names, which pays off the original and replaces it with one that reflects the shared ownership. Refinancing is cleaner because it makes both partners legally responsible for the debt, but it means going through the full application process and possibly landing at a different interest rate.
Plan for the Tax Consequences
Three tax issues can surface: gift tax, capital gains tax, and property tax reassessment. None should stop the sale, but you need to plan for each.
Gift Tax on a Below-Market Price
If your partner pays less than fair market value for their share, the IRS treats the difference 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 remaining $50,000 is a gift. You can give up to $19,000 per person per year with no reporting requirement.3Internal Revenue Service. Gifts and Inheritances If the gift portion exceeds $19,000, you’ll need to file IRS Form 709, but that rarely means owing tax. 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 In practice, very few people ever owe actual gift tax on a transaction like this.
Capital Gains on the Portion 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 your primary residence, or $500,000 if you file jointly with a spouse, as long as 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 selling only half, the gain on that portion would need to exceed $250,000 before any tax applies. For most homeowners, the exclusion covers everything.
Your Partner’s Cost Basis
Your partner’s tax basis in the property depends on how the deal is structured. If they pay full fair market value, their basis is what they paid. If the price is below market and part of the transfer is a gift, the rules get more complicated. Generally, when property is received partly as a gift, the recipient’s basis for calculating a future gain is the donor’s adjusted basis, not the amount paid.6Internal Revenue Service. Publication 551, Basis of Assets That distinction matters years later when the home is sold, so it’s worth walking through with a tax professional at the time of transfer.
Property Tax Reassessment
Recording a new deed creates a public record your local tax assessor will see. In many jurisdictions, a change in ownership triggers a reassessment, which can raise the annual property tax bill if the home has appreciated significantly. Some states exempt transfers between spouses or certain family members; others reassess on any ownership change. Check with your county assessor’s office before you record the deed.
Prepare and Record the Deed
The legal transfer happens through a new deed. You have two main choices. A quitclaim deed transfers whatever ownership interest you have without guaranteeing the title is free of liens or other claims. It’s the simpler instrument and works well between partners who already know the property’s history. A warranty deed includes the seller’s guarantee that title is clear, offering more protection to the buyer but requiring the seller to stand behind that guarantee.
Either way, the deed needs the full legal names of both parties, the property’s legal description (copy it from your existing deed or pull it from county records), and the type of co-ownership you’ve chosen. The seller signs in front of a notary public, who witnesses the signature and applies an official seal.
Once notarized, file the deed with the county recorder’s office where the property is located. You’ll pay a recording fee that varies by county but commonly runs $25 to $75 per document. Many states also charge a transfer tax based on the sale price or assessed value, though exemptions sometimes apply for transfers between spouses or into joint tenancy. Once recorded, the deed enters the public record and officially establishes both of you as co-owners.
Update Insurance and Title Coverage
Adding a co-owner changes who has an insurable interest in the home, and your policies need to reflect that. Contact your homeowners insurance provider and add your partner as a named insured. If you skip this and a claim comes up, the payout can be delayed or misdirected because the insurer’s records don’t match the deed. Your mortgage lender will also want confirmation that the policy reflects current ownership.
Your existing owner’s title insurance policy protects you for as long as you hold an interest in the property, but it doesn’t automatically extend to a new co-owner. Your partner should consider buying a separate owner’s title policy to cover their newly acquired interest against any title defects that predate the transfer. If you refinance, the lender will require a new lender’s title policy regardless.