This piece by Michael Sacks, founder and director of Sacks Properties
House prices fluctuating, endless tax changes, and mounting pressure on pensions; it’s becoming harder for homeowners to ignore a difficult truth – wealth built over decades could disappear in a single generation if it’s not carefully managed.
For homeowners whose property has grown significantly in value, the question is no longer if it can support future financial security—but how to unlock and structure that potential wisely.
This raises a timely and vital question: How can property equity be turned into lasting financial security for the next generation?
It’s a question of strategy, not sentiment. There’s a growing need for awareness around intergenerational wealth transfer, because wealth held in bricks and mortar won’t automatically become a legacy unless it’s properly structured and intentionally passed down.
And this awareness couldn’t be more urgent, as we are now entering what economists call the greatest intergenerational wealth transfer in British history, with over £5.5 trillion set to pass from baby boomers to younger generations over the next 20 years. Most of that wealth is tied up in residential property. But unless homeowners take early action (ideally before retirement), much of it risks being eroded by poorly timed decisions, inefficient structures, or unnecessary tax exposure.
Here are five key strategies homeowners need to know, drawn from real experience, for how homeowners can turn equity into something that lasts.
1. Structure earlier to protect later
Passing on property can trigger significant tax implications if done reactively. Many homeowners assume they’ll leave everything in a will, but this can saddle the next generation with a 40% inheritance tax bill if the assets haven’t been transferred or planned for strategically at least seven years before death.
With advance planning, however, this tax liability can often be avoided. One increasingly popular approach is holding investment properties within a company structure or family partnership. This allows children to become non-voting shareholders or directors, enabling wealth to be passed down gradually in a tax-efficient way, rather than all at once.
Properly structured, this method offers control, protection, and tax advantages. It also avoids the pitfalls of relying on informal gifts or leaving major financial decisions until poor health forces a rushed handover.
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2. Unlock equity without losing control
One of the most effective ways to put equity to work without selling up is by releasing a portion of the property’s value to invest in safe, income-generating assets. The best legacies aren’t built on risky ventures; they’re built on solid, income-producing property in well-researched locations.
For example, a mortgage-free homeowner in their 60s might refinance a £600,000 home to release £100,000–£150,000. That capital could then be used to purchase two modest buy-to-let properties, generating rental income now and offering capital growth over time.
The benefit? It creates a new stream of retirement income while building assets that can be passed down. And because the homeowner retains ownership of their main residence, they maintain both control and flexibility.
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3. Don’t underestimate small starts
A common misconception is that only those with millions in equity can build a legacy. But even a release of capital, say £60,000, can be enough to fund a deposit on a regional property that generates steady returns.
To give a real-life example, one client I advised sold a large family home and used £1 million of the proceeds to purchase a £2 million property portfolio (with 50% loan-to-value mortgages). This now generates over £90,000 a year in rental income. The properties are held in a company, with his children already listed on the board. When he passes, the portfolio will transfer directly with minimal tax exposure, allowing the income to continue flowing.
Legacy doesn’t need to be about volume; it’s having the foresight and strategy to make it last.
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4. Future-proof against tax changes
Continuous tax changes are creating uncertainty and raising the stakes for families looking to preserve and pass on wealth. The proposed reduction in Business and Agricultural Property Relief (from 100% to 50%) could have serious implications for those holding business or property assets. Meanwhile, whispers of extending the seven-year inheritance rule to ten years show that government appetite for reform is real.
What does this mean for homeowners? Now is the time to get advice, from both property specialists and tax consultants, because the cost of waiting may be greater than the cost of planning.
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5. Think like a steward, not just an owner
One of the most powerful insights I’ve learned from working in the industry and with other investors, is that you can’t always trust your children, but you can trust the structures you put in place.
Legacy planning isn’t just financial, it’s emotional. It’s about making sure wealth passes on safely, fairly, and intentionally. That’s why many families choose to use trusts, separate share classes, or tailored company rules that protect assets and avoid disputes – particularly in cases of divorce, remarriage, or complex family dynamics.
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This decade will decide your family’s financial future
Over the next decade, as life expectancy rises and retirement income falls short, more homeowners will turn to property as a cornerstone of long-term security – both for themselves and their families.
Those who act early will be best placed to benefit from today’s lending conditions, capital growth trends, and strategic tax allowances. Those who wait may find themselves facing higher tax, fewer options, and reduced control.
Turning equity into a legacy isn’t just a financial transaction, it’s a long-term decision about the future you create. With the right advice, clear goals, and smart structuring, property wealth can be transformed into lasting security for the next generation.
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Michael Sacks is the founder and director of Sacks Properties, a UK-based investment company providing access to off-market, discounted property deals with strong rental yields and capital growth potential.