What every Queensland Family needs to know before helping buy Property, in relation to Family Law
The dream of home ownership is alive and well in Queensland — but for many Australians, turning that dream into reality now requires a helping hand from the family. The ‘Bank of Mum and Dad’ (BoMaD) has become one of the largest sources of housing finance in the country. According to the Productivity Commission, if BoMaD were a formal lender it would rank between the 5th and 9th largest mortgage lender in Australia — with an estimated $22 to $71 billion contributed to property purchases nationwide in 2024 alone (Mozo, 2025).
More than 60% of first home buyers now receive some form of financial assistance from their parents, according to Finder’s Consumer Sentiment Tracker. That figure has surged dramatically — Digital Finance Analytics data shows it jumped from just 20% in March 2020 to 60% by March 2021, and it has remained at elevated levels since. The driving force is clear: Australian house prices have risen over 51% since March 2019, pushing the average 20% deposit requirement from $129,200 to $195,360 — a $66,160 increase in just five years (ABS / Mozo Bank of Mum and Dad Report 2025).
But while the generosity of parents helping their children onto the property ladder is admirable, the financial and legal landscape is more complex than a simple bank transfer. Whether the money is a gift, a loan, or a share in the property, the implications for both parents and children are significant — and without proper planning, good intentions can lead to family conflict, tax complications, or unexpected legal exposure.
This article from Phoenix Law & Associates explores the key considerations from both perspectives, with a focus on Queensland law and conveyancing practice.
THE LANDSCAPE: WHY BOMAD IS BOOMING
Queensland’s property market has experienced remarkable price growth over recent years. The national median dwelling value reached $976,800 by the end of 2024 — up over 51% from $646,000 in March 2019. For a Brisbane or South East Queensland buyer, that means a standard 20% deposit now requires nearly $195,360 to avoid paying Lenders Mortgage Insurance (LMI). Add transfer duty, conveyancing costs, and ongoing cost-of-living pressures, and it’s little wonder that many young buyers turn to family.
According to the Mozo Bank of Mum and Dad Report 2025 — which surveyed over 1,019 Australian parents — the average parental gift toward a home deposit now sits at $74,040, up from $69,907 in 2021. Perhaps most strikingly, three quarters of parents (75%) are now providing this support with no expectation of repayment, compared to just 33% in 2021. What was once a family loan is increasingly a one-way financial gift.
This help typically takes one of three forms:
• An outright gift of funds toward the deposit or purchase costs
• A private loan from parents to children, with or without formal repayment terms
• A co-purchase or shared equity arrangement, where parents go on the title
Each structure carries very different legal, financial, and tax consequences — and choosing the wrong one without professional advice can be costly.
FOR PARENTS: WHAT YOU NEED TO CONSIDER
- Is It a Gift or a Loan? Define It Clearly
This is the most important question to answer at the outset — and the answer should be documented in writing. If you’re giving money as an outright gift, the bank will usually require a signed ‘gift letter’ confirming there is no expectation of repayment. If it is a loan, even an informal one within the family, a proper loan agreement should be in place.
Without clear documentation:
• A ‘gift’ may later be treated as a loan in family law proceedings if your child’s relationship breaks down
• An undocumented loan may be unenforceable if repayment is disputed
• The arrangement could affect your child’s borrowing capacity with lenders
QLD Legal Tip: Queensland law does not require a loan agreement to be witnessed by a solicitor, but having one drawn up by a conveyancer or solicitor ensures it is legally enforceable and clearly understood by all parties.
- Impact on Your Own Financial Position
Before committing funds to your child’s property purchase, parents should carefully consider their own financial position, including:
• Impact on your retirement savings or superannuation plans
• Whether you have sufficient liquidity for your own needs, emergencies, or aged care costs
• Whether your own home loan or investment lending could be affected
• How this gift or loan affects other children and whether equity between siblings is a concern
It is also worth noting that Centrelink has gifting rules that may affect aged pension entitlements. Gifting above certain thresholds (currently $10,000 per financial year or $30,000 over five years) may be assessed under the ‘deprivation’ provisions, potentially reducing pension payments. This is a critical consideration for parents approaching or already in retirement. Notably, Mozo’s 2025 research found that 54% of parents funding property gifts are drawing on savings to do so, with 19% cutting back on everyday expenses — underscoring the real personal sacrifice many parents are making.
- Stamp Duty and Title Considerations in Queensland
If you are going on the title as a co-purchaser (rather than simply contributing funds), stamp duty will apply to your share of the property. In Queensland, transfer duty is payable at settlement based on the dutiable value or the purchase price, whichever is higher. This can represent a significant additional cost if not factored in.
If you already own property (including your own home), the first home buyer concessions that your child may be eligible for could be affected or lost entirely if you are named on the title. This makes structuring the transaction correctly absolutely essential.
- Family Law Risk — Protecting Your Contribution
One of the most overlooked risks for parents is what happens to their contribution if their child’s relationship breaks down. In Australia, family law courts consider the assets and financial resources of both parties in a property settlement. A contribution made by parents — whether a gift, loan, or equity share — may be subject to division between your child and their former partner.
If your child is in a relationship, it is worth discussing whether a ‘Binding Financial Agreement’ (commonly known as a prenuptial or cohabitation agreement) should be put in place before or shortly after the purchase. While this is a sensitive conversation, it is a practical one, and more families are approaching it openly as property values increase.
QLD Family Law Note: Family law in Australia is federal law, applying uniformly across Queensland and all other states. Property settlements can occur after marriages or de facto relationships (including same-sex relationships), and courts have broad discretion to divide assets.
- Estate Planning Implications
Parents should also consider how a significant gift or loan to one child fits into their broader estate plan. Will the amount be accounted for as an advance on inheritance? Could other siblings contest the estate if they feel unfairly disadvantaged? This is not a hypothetical concern — Mozo’s 2025 research found that 83% of parents who provide property support say they strive to treat all children equally, yet 20% admitted they weighed the financial impact on siblings before offering help, and 3% even expressed regret at having given more to one child than others.
Revisiting your will and considering an updated ‘statement of wishes’ or equalisation provisions after assisting a child with a property purchase is sound planning practice.
FOR CHILDREN: WHAT YOU NEED TO CONSIDER
- How Lenders View Parental Contributions
Most lenders in Australia distinguish between gifted funds and borrowed funds when assessing your borrowing capacity. If funds have been gifted, lenders generally require a statutory declaration or signed gift letter confirming there is no expectation of repayment. If there is a private loan from parents, lenders will typically count the repayments as a liability, which reduces your borrowing capacity.
Being transparent with your lender and mortgage broker about the source and nature of parental funds is essential. Misrepresenting a loan as a gift can constitute mortgage fraud — a serious legal consequence with lasting implications.
- Queensland First Home Buyer Concessions
Queensland offers first home buyers a range of concessions that can significantly reduce upfront costs:
• First Home Owner Grant (FHOG): Currently $30,000 for new homes valued up to $750,000 (subject to eligibility and current government policy)
• Transfer Duty Concessions: First home buyers may be eligible for a full or partial concession on stamp duty depending on the purchase price
• First Home Guarantee: A federal scheme allowing eligible buyers to purchase with as little as a 5% deposit without paying LMI
To put the challenge in context: research by Domain found that an Australian couple aged 25–34 now takes an average of 4 years and 9 months to save a 20% deposit for an entry-level home. It is no surprise that accessing FHOG and duty concessions — which can collectively be worth tens of thousands of dollars — is a major priority for first home buyers.
IMPORTANT: These concessions are only available to first home buyers who satisfy all eligibility requirements. If a parent goes on the title as a co-purchaser and already owns property, the concessions may be entirely lost. Structuring the transaction so that the parent contributes funds rather than co-purchasing is often the better approach where concessions are a priority.
Check Eligibility: Eligibility rules for FHOG and transfer duty concessions in Queensland are set by the Queensland Revenue Office. Always verify current thresholds and rules at the time of purchase, as government policy can change.
- Protecting Your Parents’ Contribution
If your parents have contributed a significant sum — whether as a gift or loan — it is worth ensuring that contribution is appropriately documented and protected. If you are purchasing jointly with a partner, consider:
• Whether a Binding Financial Agreement should be prepared to acknowledge parental contributions
• Whether the property should be held as ‘tenants in common’ in specified shares, rather than as ‘joint tenants’
• Whether a caveat or registered mortgage should be lodged over the property to protect a parental loan
These are not pessimistic steps — they are sensible legal protections that formalise the goodwill of your parents’ support and give everyone clarity.
- Tax Considerations
In Australia, there is no gift tax. However, there are still tax considerations worth being aware of:
• If your parents charge interest on a private loan, they may need to declare that interest as income for tax purposes
• If parents take an equity stake in the property, capital gains tax (CGT) implications will arise when the property is eventually sold
• If you rent out any part of the property, income tax and CGT treatment will depend on how the property is held
Engaging an accountant alongside your conveyancer and solicitor ensures that the structure of the arrangement is tax-efficient from day one.
- Open Communication is the Foundation
Beyond the legal and financial considerations, the most important element is clear, honest communication between parents and children about what is expected. Questions worth discussing openly include:
• Is this a gift, or do you expect to be repaid, and over what timeframe?
• What happens to your contribution if the property is sold at a loss?
• What happens if the relationship breaks down?
• Are you expecting any say in decisions about the property?
• How will this affect siblings or other family members?
Documenting the answers to these questions — even informally in a letter or email — can prevent misunderstandings and protect family relationships in the long run.
STRUCTURING OPTIONS AT A GLANCE
Structure Advantages and Key Risks
Outright Gift Simple; no loan liability; preserves borrowing capacity; FHOG concessions intact if parent not on title No legal protection for parents; Centrelink deprivation rules; family law exposure
Private Loan Legally protected with loan agreement; caveat or mortgage possible; no title involvement needed Reduces child’s borrowing capacity; must disclose to lender; interest may be taxable income
Co-Purchase / Equity Share Parents have direct legal interest; can capture capital growth; strongest security position Stamp duty on parent’s share; FHOG may be lost; CGT on sale; parents’ finance impacted; complex exit
OUR CONVEYANCING ADVICE: GET IT IN WRITING
At Phoenix Law Associates & Conveyancing Home Qld, we regularly assist Queensland families navigating BoMaD arrangements. The single most consistent piece of advice we give is this: no matter how much trust and goodwill exists within your family, document the arrangement properly before settlement.
A short, clearly written agreement costs a fraction of what litigation or a contested estate can cost. And beyond the dollars, it protects the family relationships that matter most.
We can assist you with:
• Reviewing or preparing a loan agreement between family members
• Advising on the most appropriate structure for your purchase given your eligibility for Queensland first home buyer concessions
• Preparing the correct transfer documents where co-ownership is involved
• Lodging a caveat or registering a mortgage to protect a parental loan
• Advising on tenancy in common vs joint tenancy arrangements
• Referring you to trusted family lawyers, accountants, and financial advisers where required
Contact Phoenix Law & Associates – Brisbane lawyers who speak South African, Spanish, Chinese, Korean ,Japanese & English too of course, fluently. Call +61731800908 or email info@phoenix-law.com.au | Level 8, 320 Adelaide Street, Brisbane.
SOURCES
Mozo Bank of Mum and Dad Report 2025 (April 2025) | Australian Bureau of Statistics, Residential Property Price Index 2024 | Digital Finance Analytics, Housing Finance Data | Finder Consumer Sentiment Tracker 2023 | Productivity Commission, Housing Affordability Report | Domain First Home Buyer Report | Australian Housing Monitor (AHURI, 2023)
Image credit to Compare Club Australia Pty Ltd.
