Transferring or gifting property to a family member can be as simple as submitting a property transfer form, but there are costs involved – even when the property is given as a gift.
Generally, you can not avoid all of the costs involved so it's unlikely you'll be able to gift a house to a family member or relative for free.
The 2 big fees you may be liable to pay are stamp duty on the market value of your property, and potentially capital gains tax (CGT) if it was an investment property.
What is a property title and why does it cost money to transfer it?
A property title is a legal document that holds all the information about a property. It includes details on who owns the land or has a mortgage on it.
When the owner changes, either through gifting or through selling it, the title needs to be legally updated.
Do you have to pay stamp duty on a gifted property?
You have to pay stamp duty on the market value of your property. Even if no money changes hands, the transfer will be considered to have been done based on the property's market value. The government uses this "true" valuation to determine the stamp duty and CGT costs regardless of the discounted selling price.
When transferring a property to a family member, the Australian Tax Office (ATO) says you need to make an effort to get an actual value to estimate from.
"You should obtain a valuation from a professional valuer, or work out the market value yourself using reasonably objective and supportable data," they say. "This can include the price paid for very similar property that was sold at the same time in the same location."
For some examples:
On a property worth $500,000 transferred in QLD, the stamp duty is around $20,000.
On a property worth $600,000 transferred in WA, the stamp duty is around $32,500.
On a property worth $700,000 transferred in VIC, the stamp duty is around $39,000.
On a property worth $800,000 transferred in NSW, the stamp duty is around $31,000.
If the person receiving the gift of the property has not owned a property before, they may be entitled to a discount or waiver on stamp duty.
What if you're gifting part of a property to someone?
Stamp duty is only payable based on how much of the property is being transferred to another person.
One of our readers reached out and asked, "When selling a1/2 of your property to your child, do they pay stamp duty on the full value of the property, or only on the version they are buying?"
The answer is, you only need to pay stamp duty on the part of the property that is changing ownership. In this scenario, if the parents are gifting half of the property to their child, then that recipient would pay stamp duty based on half of the property's value.
Does anything change depending on the state or territory you live in?
Yes. The law around transferring property titles is Australia-wide, but the rules on stamp duty are different in each state and territory.
There are 2 ways you can transfer a property to a family member: gifting and selling.
Gift
You can give ownership of your property to a family member as a gift. No money changes hands in this scenario, but this requires filling out the necessary paperwork with your state revenue office and title office. Your conveyancer may advise you to organise a deed of gift as well. If the property was an investment and not the seller's primary residence, there will likely be CGT costs as well (more on that below).
Sale
You can sell your property to a family member. You will be liable for stamp duty and it will be calculated based on the property's market value, and not the sale price. For instance, Also, if the property is not the seller's main residence (say, if it was an investment property) then capital gains tax will probably apply as well.
What costs will you pay when transferring property to family?
Below are a few examples of fees and charges that may apply when you are transferring or gifting property within your family:
Costs paid by the original owner
Valuation costs. You might need to have the property value determined by a certified valuer before transferring or gifting your property. This is so you know how much to report that you have gained or lost when filing your income taxes. Independent valuations cost between $300 and $900 depending on where the property is.
Legal fees. You should have a conveyancer or solicitor oversee the property transfer and have them draw up contracts or transfer documents with title details, the value and determined price of the property, as well as personal details for both parties. These legal documents can be used in case the validity of the property transfer is ever questioned.
Capital gains tax (CGT). The CGT cost will depend on the amount of capital gain or capital loss resulting from the CGT event. In the event of a capital gain, your total gain amount will be the difference between your capital proceeds and the cost base of your asset. The actual CGT amount you pay depends on your income, as it's added to your income tax for the applicable year. Read more about CGT when selling in our in-depth guide.
Costs paid by the new owner
Stamp duty. Also referred to as stamp duty land tax, this tax is calculated on the value of the property or land that is being transferred or gifted and is represented as a percentage. Some purchases may be exempt from stamp duty, so check with your state or territory office of revenue. Stamp duty is calculated based on the state or territory you're in.
Legal fees. You should have a conveyancer check over everything before signing, and the fees for this can range from a few hundred dollars up to $1,000.
Vanessa and Adnan own a home in NSW. They sell it to their son Al for $500,000, knowing that its true value is actually $900,000. Al pays them $500,000 and Vanessa and Adnan get a professional property valuer to look at the property. The valuer puts the property's market value at $900,000.
Al's costs therefore are:
Sale price: $500,000
Stamp duty (calculated on $900,000 for first home buyers): $20,200
Vanessa and Adnan have used the house as their primary residence for more than 10 years. Therefore they won't have to pay CGT.
* This is a fictional, but realistic, example.
Can you avoid fees and charges when transferring property?
Not entirely. When you gift your property you are still charged stamp duty, even if you sell the property for a small amount to a family member or friend. As the ATO states, the property is calculated at market value if you:
Receive no money for your property
Receive less than the market value for your property; or,
Do not deal at arm's length with the buyer during the sale event
Dealing at arm's length refers to both parties in the sale acting independently and having no "influence or control over each in connection with the transaction".
You might be able to avoid hefty fees when transferring or gifting properties in some select situations and scenarios where CGT and other charges will not apply. Below are some examples of these situations:
If you acquired the asset before 20 September 1985: This date is when CGT came into effect, so any property or assets that were acquired before this date may be exempt from CGT.
If the property being transferred is your home (main residence): If you have been living at the property and have indicated it as your main place of residence (i.e. the address is on your current driver’s licence and you receive mail there) then you may be exempt from CGT when gifting or selling a property to another.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio
Richard's expertise
Richard has written 553 Finder guides across topics including:
From supply and demand through to location, facilities and planned infrastructure projects, there are plenty of factors that can influence property value.
my sister and I currently have a mortgage on a house which is our primary residence. I am now married and will be moving out to buy a new residential property with my husband so my sister will be buying me out.
Does she/we have to pay stamp duty on the existing property even though we both currently live in it?
thanks a lot
JodieJune 27, 2016
Hi Sonja,
Stamp duty is a fee paid at the time of purchase and often when refinancing depending on the circumstances. A mortgage broker can better confirm this for you. It is not something that you can be exempt from due to the property being your main place of residence. You will most likely be exempt from capital gains tax due to the property being the main place of residence for your sister and yourself and not for any profit-making purposes.
Regards
Jodie
SonjaJune 28, 2016
thank you
DavidMarch 31, 2016
my brother is gifting our family home. which our mother currently resides. the house has never been an investment property in the way of rental, so we have not gained an income from it. does he need to pay CGT? or are we exempt?
thanks
HeatherApril 22, 2016
My name is Heather. I am 61 and for the past 2 years live with and care for my 95yo dad in his home as he is unable to care for himself. I am on a carers pension. My dads home will be part of his Estate which will be divided equally between my 3 brothers and me. I am interested in continuing to live in the home after my dad’s death. My brothers are in agreement with the arrangement and I will pay them their share based on market value. Is it an advantage to me and/or my dad if I purchase the home now whilst I am on a pension as I believe stamp duty is less? My dad purchased the home in 1970.
BelindaApril 26, 2016
Hi Heather,
Thanks for getting in touch.
The rules surrounding stamp duty vary from state to state. So, any stamp duty concession that you may be entitled to will depend on the laws of your state government.
Generally, pensioners, health cardholders, and those receiving government benefits may be eligible for a duty concession or exemption, but you’ll need to check with your local Office of State Revenue.
Once you have this information, it should help you decide whether it would be beneficial for you to purchase the home now. You can learn more about the costs of changing property ownership through our website.
Keep in mind that you may want to speak to a solicitor or conveyancer, so that you fully understand the costs and process involved.
All the best,
Belinda
BelindaApril 1, 2016
Hi David,
Thanks for reaching out.
I’ve sent you an email to follow up with this enquiry.
Thanks,
Belinda
HelenaMarch 20, 2016
My partner and I separated just as we sold my house and bought a new house in both our names. My ex agreed that I could take over the mortgage as we bought the house from the profit we made from selling my house. What forms do we need to fill in so I can take his name off the title and so I don’t have to pay stamp duty on the house.
BelindaMarch 21, 2016
Hi Helena,
Thanks for getting in touch.
If you would like to remove your ex-husband’s name from the property title, you will need to complete and submit a transfer of title form which can be accessed from the relevant state government website. For instance, if the property is located in NSW, then you can find the form on the Land and Property Information (LPI) website.
Keep in mind that you will need to get your lender’s consent to remove someone’s name from the property title and you’ll most likely need to get new mortgage documents created. To see if you’re eligible for stamp duty exemption, you can check with your State Office of Revenue (SOR) or use our stamp duty calculator and learn about exemptions and concessions in each state and territory.
All the best,
Belinda
ClintonFebruary 24, 2016
My dad, mum and I live in a house that is jointly owned by both my parents. My dad is currently renting out a second house (which belongs in his name only) that he bought in 1960 for only 20k, but is now valued at 500k. In my dad’s will, everything he owns will be left to my mum. My question is: if my dad dies, will my mum have to pay CGT tax on the second house when she receives it? Will she have to pay stamp duty, and approximately how much (just a very rough figure or estimated margin range please)?
BelindaFebruary 25, 2016
Hi Clinton,
Thanks for your enquiry.
The majority of real estate is exempt from capital gains tax (CGT) if it was purchased before 20 September 1985. As a result, if the investment property was acquired in 1960 as you mentioned, then I believe your mum will be exempt from paying CGT. Additionally, no CGT applies to deceased estates.
However, your mum may be liable to pay stamp duty when she receives the property. Stamp duty is calculated on the value of the property that is being transferred and it is normally represented as a percentage. You may use our stamp duty calculator to estimate the cost.
Some transfers may be exempt from stamp duty so it’s best to check with your State Office of Revenue. Keep in mind that if your dad passed away, the executor of the will would organise the transfer of assets and the payment of stamp duty.
I hope you find this useful.
Kind regards,
Belinda
DawnFebruary 15, 2016
Hi. My mother-in-law wishes to gift us her property. She purchased it in 1984 what fees are we going to expect and will she incur any fees. Can we borrow against the value to put a house on it?
BelindaFebruary 16, 2016
Hi Dawn,
Thanks for reaching out.
A breakdown of the fees you can expect to pay when transferring property ownership within the family is outlined on our review of transferring property within the family. It outlines the fees paid by the original owner as well as the fees paid by the new owners of the property.
If your mother-in-law is gifting you the property, then she can expect to pay valuation costs (around $300 – $900) as she may need to get the property valued prior to gifting it to you, and she may also need to pay legal charges to have a solicitor look over the paperwork (this will depend on the complexity of legal work involved but some solicitors charge $150-200 per hour).
Given that your mother-in-law acquired the property before 20 September 1985, she will be exempt from paying capital gains tax (CGT).
As the new owner of the property, you may need to pay stamp duty which is generally calculated based on the value of the property being gifted to you. However, some purchases may be exempt from stamp duty so check with your state office of revenue.
If you need personal advice regarding whether or not you can borrow against the equity of the property, please speak to a licensed mortgage broker to explore your options.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you.
I hope this helps.
All the best,
Belinda
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Valuation costs. You might need to have the property value determined by a certified valuer before transferring or gifting your property. This is so you know how much to report that you have gained or lost when filing your income taxes. Independent valuations cost between $300 and $900 depending on where the property is.
Hi there
my sister and I currently have a mortgage on a house which is our primary residence. I am now married and will be moving out to buy a new residential property with my husband so my sister will be buying me out.
Does she/we have to pay stamp duty on the existing property even though we both currently live in it?
thanks a lot
Hi Sonja,
Stamp duty is a fee paid at the time of purchase and often when refinancing depending on the circumstances. A mortgage broker can better confirm this for you. It is not something that you can be exempt from due to the property being your main place of residence. You will most likely be exempt from capital gains tax due to the property being the main place of residence for your sister and yourself and not for any profit-making purposes.
Regards
Jodie
thank you
my brother is gifting our family home. which our mother currently resides. the house has never been an investment property in the way of rental, so we have not gained an income from it. does he need to pay CGT? or are we exempt?
thanks
My name is Heather. I am 61 and for the past 2 years live with and care for my 95yo dad in his home as he is unable to care for himself. I am on a carers pension. My dads home will be part of his Estate which will be divided equally between my 3 brothers and me. I am interested in continuing to live in the home after my dad’s death. My brothers are in agreement with the arrangement and I will pay them their share based on market value. Is it an advantage to me and/or my dad if I purchase the home now whilst I am on a pension as I believe stamp duty is less? My dad purchased the home in 1970.
Hi Heather,
Thanks for getting in touch.
The rules surrounding stamp duty vary from state to state. So, any stamp duty concession that you may be entitled to will depend on the laws of your state government.
Generally, pensioners, health cardholders, and those receiving government benefits may be eligible for a duty concession or exemption, but you’ll need to check with your local Office of State Revenue.
Once you have this information, it should help you decide whether it would be beneficial for you to purchase the home now. You can learn more about the costs of changing property ownership through our website.
Keep in mind that you may want to speak to a solicitor or conveyancer, so that you fully understand the costs and process involved.
All the best,
Belinda
Hi David,
Thanks for reaching out.
I’ve sent you an email to follow up with this enquiry.
Thanks,
Belinda
My partner and I separated just as we sold my house and bought a new house in both our names. My ex agreed that I could take over the mortgage as we bought the house from the profit we made from selling my house. What forms do we need to fill in so I can take his name off the title and so I don’t have to pay stamp duty on the house.
Hi Helena,
Thanks for getting in touch.
If you would like to remove your ex-husband’s name from the property title, you will need to complete and submit a transfer of title form which can be accessed from the relevant state government website. For instance, if the property is located in NSW, then you can find the form on the Land and Property Information (LPI) website.
You can learn more about the process on how to remove a person’s name from a property title and find the link to your state government website to process the transfer.
Keep in mind that you will need to get your lender’s consent to remove someone’s name from the property title and you’ll most likely need to get new mortgage documents created. To see if you’re eligible for stamp duty exemption, you can check with your State Office of Revenue (SOR) or use our stamp duty calculator and learn about exemptions and concessions in each state and territory.
All the best,
Belinda
My dad, mum and I live in a house that is jointly owned by both my parents. My dad is currently renting out a second house (which belongs in his name only) that he bought in 1960 for only 20k, but is now valued at 500k. In my dad’s will, everything he owns will be left to my mum. My question is: if my dad dies, will my mum have to pay CGT tax on the second house when she receives it? Will she have to pay stamp duty, and approximately how much (just a very rough figure or estimated margin range please)?
Hi Clinton,
Thanks for your enquiry.
The majority of real estate is exempt from capital gains tax (CGT) if it was purchased before 20 September 1985. As a result, if the investment property was acquired in 1960 as you mentioned, then I believe your mum will be exempt from paying CGT. Additionally, no CGT applies to deceased estates.
However, your mum may be liable to pay stamp duty when she receives the property. Stamp duty is calculated on the value of the property that is being transferred and it is normally represented as a percentage. You may use our stamp duty calculator to estimate the cost.
Some transfers may be exempt from stamp duty so it’s best to check with your State Office of Revenue. Keep in mind that if your dad passed away, the executor of the will would organise the transfer of assets and the payment of stamp duty.
I hope you find this useful.
Kind regards,
Belinda
Hi. My mother-in-law wishes to gift us her property. She purchased it in 1984 what fees are we going to expect and will she incur any fees. Can we borrow against the value to put a house on it?
Hi Dawn,
Thanks for reaching out.
A breakdown of the fees you can expect to pay when transferring property ownership within the family is outlined on our review of transferring property within the family. It outlines the fees paid by the original owner as well as the fees paid by the new owners of the property.
If your mother-in-law is gifting you the property, then she can expect to pay valuation costs (around $300 – $900) as she may need to get the property valued prior to gifting it to you, and she may also need to pay legal charges to have a solicitor look over the paperwork (this will depend on the complexity of legal work involved but some solicitors charge $150-200 per hour).
Given that your mother-in-law acquired the property before 20 September 1985, she will be exempt from paying capital gains tax (CGT).
As the new owner of the property, you may need to pay stamp duty which is generally calculated based on the value of the property being gifted to you. However, some purchases may be exempt from stamp duty so check with your state office of revenue.
If you need personal advice regarding whether or not you can borrow against the equity of the property, please speak to a licensed mortgage broker to explore your options.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you.
I hope this helps.
All the best,
Belinda