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.
When you say that a property attained before Sept 1985 may not be subject to cgt. could you please explain?
BelindaJune 16, 2015
Hi Sean,
Thanks for your enquiry.
According to the Australian Taxation Office (ATO), some capital gains are exempt, and some capital losses are disregarded in certain situations.
One of these exemptions is for pre-CGT assets which are assets that you acquired before the 20th of September 1985 (with the exception of some pre-CGT shares or interests in private trusts).
In other words, if you acquired the asset before this time (which is the date that CGT came into effect), then you may be exempt from CGT.
If you require more information about CGT, you can fill out the form on this page to speak to a property tax specialist.
Thanks,
Belinda
TomJune 8, 2015
Hi, Just a quick query. If I wanted to transfer my main residence house/property from being in my name to being in my childrens name or both my name and childs name is there any costs involved in doing this and what documents do I need to transfer ownership to my children? Many thanks for any information, appreciate your work, Kind regards, Tom Gibson.
BelindaJune 11, 2015
Hi Tom,
Thanks for your enquiry.
Depending on your situation, when you transfer property to family members you may still incur some costs such as capital gains tax (CGT) and stamp duty, among others.
In terms of documents, you will need to access these from your State Revenue Office.
Kind regards,
Belinda
TomJune 12, 2015
Thank you so much for your input Belinda, much appreciated.
The property was bought very recently with the help of my childrens Trust fund and I would like to be able to transfer it into their names one being 17 yr old and the other 21 yrs old. would any CGT be required on such a recent purchase (6 months ago) Is there a form ref. No. for the document required from the Gov. dept. to enable transfer to take place as smoothly as possible? Many thanks for your help. Regards, Tom.
JodieJune 15, 2015
Hi Tom,
Thanks for your question.
Capital Gains Tax can be charged whenever there is what the ATO calls a “CGT event” such as selling as well as gifting a property, please see our pages on capital gains tax and how to avoid it for further information.
In regards to the documents required for processing the transfer, you will need to contact your local state revenue service and the department responsible for your land titles in your state directly as each state has alternative requirements.
Regards,
Jodie
KateJune 6, 2015
My husband (67) and I (60) are retired living off our investments, no chance of an aged pension. I own one investment property outright and am wanting to sell. I was wondering if I put my spouse on the title to share the CGT prior to selling does he need to be on the title over 12 months in order to gain the best CGT rate?
BelindaJune 9, 2015
Hi Kate,
Thanks for your enquiry.
Generally, when you transfer property within the family, you are still charged capital gains tax (CGT). This amount will depend on the amount of capital gain or loss resulting from the CGT event.
In the event of a capital gain, your gain amount will be the difference between your capital proceeds from the sale and the cost base of your asset.
It would be best that you speak with a property tax specialist about getting the best CGT rate.
Thanks,
Belinda
DavidMay 15, 2015
If the property being transferred is your main residence: If you have been living at the property and have indicated it as your main place of residence (ie. the address is on your current driver’s license and you receive mail there) then you may be exempt from CGT.( How long do I have to be living at the address before I can claim I live there.)??
Finder
MarcMay 18, 2015Finder
Hi David,
thanks for the question.
The CGT exemption on main residences doesn’t have a specified time you must have lived in it to be eligible. Rather, the ATO will look at all the signs of a property being your main residence when assessing whether or not it’s true – is your mail being sent to the property? Have you moved your personal belongings into the property? What’s your address on your electoral roll? Have you connected services such as gas and electricity to the property? All of these questions and a few more will be asked by the ATO when working this out.
Cheers,
Marc.
anthonyMay 8, 2015
do u how i can check if a hose has been transferred into someone else name
JodieMay 12, 2015
Hi Anthony,
Thank you for reaching out.
Please contact your local state governments land title department with all the details of the property you are inquiring about and they will be able to let you know the land title details, there may be fees involved.
Regards
Jodie
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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.
When you say that a property attained before Sept 1985 may not be subject to cgt. could you please explain?
Hi Sean,
Thanks for your enquiry.
According to the Australian Taxation Office (ATO), some capital gains are exempt, and some capital losses are disregarded in certain situations.
One of these exemptions is for pre-CGT assets which are assets that you acquired before the 20th of September 1985 (with the exception of some pre-CGT shares or interests in private trusts).
In other words, if you acquired the asset before this time (which is the date that CGT came into effect), then you may be exempt from CGT.
If you require more information about CGT, you can fill out the form on this page to speak to a property tax specialist.
Thanks,
Belinda
Hi, Just a quick query. If I wanted to transfer my main residence house/property from being in my name to being in my childrens name or both my name and childs name is there any costs involved in doing this and what documents do I need to transfer ownership to my children? Many thanks for any information, appreciate your work, Kind regards, Tom Gibson.
Hi Tom,
Thanks for your enquiry.
Depending on your situation, when you transfer property to family members you may still incur some costs such as capital gains tax (CGT) and stamp duty, among others.
You can read our guide about the costs associated with changing property ownership.
In terms of documents, you will need to access these from your State Revenue Office.
Kind regards,
Belinda
Thank you so much for your input Belinda, much appreciated.
The property was bought very recently with the help of my childrens Trust fund and I would like to be able to transfer it into their names one being 17 yr old and the other 21 yrs old. would any CGT be required on such a recent purchase (6 months ago) Is there a form ref. No. for the document required from the Gov. dept. to enable transfer to take place as smoothly as possible? Many thanks for your help. Regards, Tom.
Hi Tom,
Thanks for your question.
Capital Gains Tax can be charged whenever there is what the ATO calls a “CGT event” such as selling as well as gifting a property, please see our pages on capital gains tax and how to avoid it for further information.
In regards to the documents required for processing the transfer, you will need to contact your local state revenue service and the department responsible for your land titles in your state directly as each state has alternative requirements.
Regards,
Jodie
My husband (67) and I (60) are retired living off our investments, no chance of an aged pension. I own one investment property outright and am wanting to sell. I was wondering if I put my spouse on the title to share the CGT prior to selling does he need to be on the title over 12 months in order to gain the best CGT rate?
Hi Kate,
Thanks for your enquiry.
Generally, when you transfer property within the family, you are still charged capital gains tax (CGT). This amount will depend on the amount of capital gain or loss resulting from the CGT event.
In the event of a capital gain, your gain amount will be the difference between your capital proceeds from the sale and the cost base of your asset.
You can read more about capital gains tax and CGT discounts.
It would be best that you speak with a property tax specialist about getting the best CGT rate.
Thanks,
Belinda
If the property being transferred is your main residence: If you have been living at the property and have indicated it as your main place of residence (ie. the address is on your current driver’s license and you receive mail there) then you may be exempt from CGT.( How long do I have to be living at the address before I can claim I live there.)??
Hi David,
thanks for the question.
The CGT exemption on main residences doesn’t have a specified time you must have lived in it to be eligible. Rather, the ATO will look at all the signs of a property being your main residence when assessing whether or not it’s true – is your mail being sent to the property? Have you moved your personal belongings into the property? What’s your address on your electoral roll? Have you connected services such as gas and electricity to the property? All of these questions and a few more will be asked by the ATO when working this out.
Cheers,
Marc.
do u how i can check if a hose has been transferred into someone else name
Hi Anthony,
Thank you for reaching out.
Please contact your local state governments land title department with all the details of the property you are inquiring about and they will be able to let you know the land title details, there may be fees involved.
Regards
Jodie