You are free to sell your home for any price you choose, including below its market value. There is no legal requirement to sell at the best available price when selling your own residential property. People sell below market value for a variety of reasons: to help a family member onto the property ladder, to achieve a quicker sale, to sell to a cash buyer without the uncertainty of a chain, or because a quick sale cash buyer company has offered a discounted price in exchange for a fast transaction.

However, the difference between the market value and the sale price has implications for capital gains tax, inheritance tax, and potentially the buyer's stamp duty and mortgage, depending on the relationship between buyer and seller and the circumstances of the sale.

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Selling to a Family Member

Selling to a child, sibling, or other family member at below market value is one of the most common reasons for a discounted sale. The discount is treated as a gift of the difference between the market value and the sale price.

Capital gains tax

For transactions between connected persons, including family members, HMRC requires any capital gain to be calculated on the market value at the time of the transaction rather than the actual sale price. This means that if you sell a property worth 400,000 pounds to your child for 300,000 pounds, your capital gains tax liability is calculated as if you received 400,000 pounds. The 100,000 pound discount does not reduce your CGT liability.

If the property is your only or main residence and qualifies for full principal private residence relief, no CGT is due regardless of the sale price. If it is not your main residence, such as a buy-to-let or second home, the CGT is calculated on the full market value.

Inheritance tax

The discount is a potentially exempt transfer for inheritance tax purposes. If you die within seven years of making the discounted sale, the discount amount may be included in your estate for inheritance tax calculations. The taper relief rules reduce the rate charged for deaths between three and seven years after the gift.

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Selling to a Cash Buyer or House-Buying Company

House-buying companies and cash buyer services typically offer between 75 and 90 percent of market value in exchange for a guaranteed quick sale, often within a matter of weeks. This type of sale involves selling to an unconnected party, so the CGT and inheritance tax implications are different from selling to a family member. Your CGT is calculated on the actual sale price, not the market value, when selling to an unconnected buyer.

The primary consideration here is whether the speed and certainty of the sale justify the discount. A 15 to 25 percent discount can represent a very large sum of money on a typical UK property, and in most markets a competitively priced open-market sale with a good estate agent will achieve significantly more. Cash buyer services are most appropriate when there are compelling reasons for speed, such as financial difficulty, a need to liquidate quickly, or a property with issues that would make it difficult to sell on the open market.

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Selling Below Value When You Have a Mortgage

If you have a mortgage, you cannot sell the property for less than the amount needed to repay the mortgage without your lender's consent. The lender has a charge over the property as security for the loan, and they will not release that charge unless they receive at least the amount owed. Selling at a price below the outstanding mortgage balance means being in negative equity, which requires either making up the shortfall from your own funds or negotiating with the lender to accept less than the full outstanding balance.

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The Buyer's Considerations

For the buyer, stamp duty land tax is calculated on the actual purchase price rather than the market value, so a below-market purchase has a lower SDLT cost. However, if the buyer needs a mortgage, the lender will value the property independently and will typically lend against the lower of the purchase price or the market valuation. A significant discount from market value does not automatically create usable equity in the property from the lender's perspective unless they specifically offer a concessionary purchase product.

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Summary

Yes, you can sell your house for less than market value. The legal right to set your own price is not restricted. The implications depend on who you are selling to: sales to connected persons such as family members trigger CGT on the full market value and create potentially exempt transfers for inheritance tax, regardless of the actual price received. Sales to unconnected buyers at a discount, including to house-buying companies, are assessed for CGT on the actual price. Getting independent legal and tax advice before a discounted sale to a family member is strongly recommended.