Helping your adult child into property feels like the practical next step when you have capacity and they're ready.
The challenge arrives when you start working out how to structure the purchase. You might be providing deposit funds, going on the loan as a guarantor, or buying the property outright in your name with an informal arrangement. Each approach has different implications for tax, lending, and ownership that affect both of you long after settlement.
Who Actually Owns the Property Matters from Day One
The legal owner determines who pays capital gains tax, who qualifies for first home buyer concessions, and who can access equity later. If you purchase the property in your name with the intention of transferring it to your child later, you create two stamp duty events and potentially a CGT liability when the transfer occurs. If your child is named as the owner but you contribute the deposit, lenders treat it as a gift and your child needs to demonstrate they can service the loan independently. The structure you choose on settlement day is difficult to unwind without cost.
Consider a parent who wanted to help their daughter buy a unit in inner Brisbane. The daughter had secure employment but limited savings. The parent offered to contribute $80,000 toward the deposit and go on the loan as guarantor. The lender required proof that the $80,000 was a genuine gift with no expectation of repayment, and the daughter still needed to show she had saved at least 5% of the purchase price herself. The parent also needed to demonstrate they could service their own mortgage plus the full amount of their daughter's loan if she defaulted. What seemed like a straightforward offer of help became a detailed exercise in documenting income, savings history, and intention.
How Lenders Assess a Co-Purchaser or Guarantor Arrangement
Lenders evaluate your capacity to service debt separately from your child's. If you are named on the loan, your income and liabilities are assessed as though you are solely responsible for repayment. If you are acting as guarantor, the lender assumes you will need to cover the shortfall if your child cannot meet repayments. Both scenarios affect your ability to borrow for other purposes, refinance your own home, or access equity. The lender does not take into account informal agreements about who will actually make repayments. They assess the legal obligation.
When a parent and child buy together as co-purchasers, both names appear on the title and both are jointly liable for the mortgage. This structure can improve borrowing capacity because both incomes are combined, but it also means the parent loses access to first home buyer concessions if they intend to pass the property to their child later. It also means the parent is liable for any capital gains tax on their share of the property when it is sold, even if they never lived there or benefited financially. A buyers agent can help clarify how different ownership structures affect your specific tax and borrowing position before you proceed.
Buying Through a Trust or Company Structure for Family Benefit
Some parents choose to purchase property through a family trust or company to separate legal ownership from beneficial ownership. A trust allows you to control the asset while distributing income or capital to your child over time. A company structure offers liability protection but removes access to the main residence exemption and creates ongoing compliance costs. Both options require formal legal documentation and annual accounting, and not all lenders will provide finance for a trust or company purchase without additional security.
The decision to use a trust depends on whether you want to retain control over the property, how you plan to distribute income, and whether you are buying purely as an investment or with the intention of your child eventually living there. If your child is managing the property and making repayments, but you retain legal ownership through a trust, there is no automatic transfer of equity. The trust deed governs who benefits, and changing that arrangement later requires legal variation.
Deposit Gifts and Genuine Savings Requirements
If you are contributing the deposit but your child is taking out the loan in their name alone, lenders classify your contribution as a gift. Most lenders require the borrower to have saved at least 5% of the purchase price from their own verified income, even if the remaining deposit is gifted. This is called the genuine savings requirement. Your child cannot simply receive the full deposit amount from you and proceed to settlement without meeting this threshold.
Lenders also require a signed statutory declaration from you confirming the funds are a gift with no obligation to repay. If there is any indication the funds are a loan, even an informal one, the lender will treat it as an additional liability and reduce your child's borrowing capacity accordingly. If you are considering helping with a deposit, the structure needs to be clear and documented well before your child applies for finance. A buyers agent co-purchaser scenario can be discussed during the buyer brief stage to ensure the approach aligns with lending requirements.
Stamp Duty Concessions and First Home Buyer Status
If your child qualifies as a first home buyer, they may be eligible for stamp duty concessions or exemptions depending on the state and purchase price. If you are named on the title as co-purchaser, your child loses access to these concessions because you are not a first home buyer. The same issue arises if the property is purchased in your name with an informal agreement to transfer it later. The concession applies at the time of purchase based on who is listed as the legal owner.
In Queensland, a first home buyer purchasing a property under $500,000 may pay no stamp duty. If you go on the title with them, that concession disappears. The difference can be tens of thousands of dollars depending on the purchase price. The structure you choose affects not just ownership and tax, but the upfront cost of the transaction itself.
Legal Documentation That Protects Everyone Involved
When family members buy property together, or when one party provides funds and another takes legal title, a formal agreement protects both sides. This might be a co-ownership agreement, a loan agreement, or a deed of gift depending on the structure. The agreement sets out who contributed what, who is responsible for repayments, how decisions about sale or refinance are made, and what happens if circumstances change.
Without this documentation, disputes arise when one party wants to sell, refinance, or access equity and the other does not. A parent who contributed $100,000 toward a deposit may assume they are entitled to that amount back on sale, but if they are not named on the title and there is no written agreement, they have no legal claim. Similarly, an adult child who has made every mortgage repayment may assume they have full ownership, but if the parent is on the title, the parent retains a legal share. The due diligence coordination process ensures these structures are reviewed and documented with legal advice before contracts are exchanged.
When a Buyer's Agent Works on Behalf of a Family Purchaser
A buyer's agent can act on behalf of a parent purchasing property for an adult child, but the engagement needs to be clear about who the client is, who makes decisions, and who signs the contract. If the parent is the legal purchaser, the agency agreement and all communication should be with the parent. If the adult child is the purchaser and the parent is simply assisting, the child is the client. Mixing decision-makers creates confusion during property negotiations and can delay settlement if instructions conflict.
The benefit of engaging a buyer's agent in this scenario is that the search and acquisition process remains objective. Family purchases can become emotional when parents and children have different ideas about location, property type, or budget. A buyer's agent works to the agreed brief and represents the client's interest without the relational complexity that comes from family involvement.
You have the resources and the intent to help. The structure is what determines whether that help creates opportunity or complications down the line. Call one of our team or book an appointment at a time that works for you to talk through how your specific situation should be structured before you start looking at properties.
Frequently Asked Questions
Can I buy a property in my name and transfer it to my child later?
You can, but it creates two stamp duty events and may trigger capital gains tax when the transfer occurs. Most states do not offer concessions for transfers between family members unless the property is part of a deceased estate or divorce settlement.
Does my child lose first home buyer concessions if I go on the title with them?
Yes. First home buyer concessions only apply if all purchasers are buying their first property. If you are already a property owner and you are named on the title, your child will not qualify for stamp duty concessions or grants.
What does a lender require if I am gifting my child the deposit?
The lender will require a signed statutory declaration confirming the funds are a gift with no obligation to repay. Your child will still need to demonstrate they have saved at least 5% of the purchase price from their own income to meet genuine savings requirements.
Can a buyers agent help if I am buying property on behalf of my child?
Yes, but the engagement must clearly identify who the legal purchaser is and who has authority to make decisions. The buyers agent works to the agreed brief and represents the client named in the agency agreement, which avoids confusion during negotiations and contract signing.
