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."
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 1/2 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 Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio
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If our son tried to buy his house in 2009 and could not afford it so my husband and I took out the mortgage,
which money is still owing, and he still lives in it. Can we put it into his name, now that we are getting older, and what fees and charges would we have to pay.
Finder
AngusSeptember 23, 2024Finder
Hi Maretta, This is a complex situation. If the mortgage is transferred, then your son will effectively have responsibility for it – so he’ll need to be able to demonstrate that he can afford the repayments. There would also be fees associated with transferring the mortgage and the proerty title (these would vary somewhat depending on the existing provider and also potentially which state you’re in). Given all that complexity, talking to a specialist financial advisor would be a sensible move.
PhilipJuly 22, 2024
we have a family shack that is in my mothers name, she is 97 can she gift the property to myself what costs if any will ne involved
Finder
SarahJuly 26, 2024Finder
Yes, you will be required to pay stamp duty. The amount depends on where you live, the value of the property and whether you’re entitled to a stamp duty waiver or not. Generally when you an inherit a property you don’t have to pay stamp duty (for up to 2 years after the owner passes), so that might be an option if you want to avoid paying stamp duty.
Hope this helps!
HowardJune 16, 2024
I have a step brother in law who wants to go into care. He has given us in his will all of his assets including his house of 20 years.
Now with him going into care he has no use for his house, so he wants us to take it now.
I read you article on Gifting and do wonder how my costs (stamp duty) might be less or the same if we waited until he has passed away to take possession.
Finder
AngusSeptember 23, 2024Finder
Hi Howard, This is a complex question and you’ll definitely need to get independent legal and financial advice to work out the best approach (as will your brother in law). As well as stamp duty, there are also potential considerations around capital gains and title transfer. Good luck!
BruceMay 30, 2024
Hi, I have a block of land worth about $100,000 I would like to gift to my son (residing on the property).
Whilst I dont know the money involved I do know he has unpaid government debt (Child support and unsubmitted tax returns)
Would he lose the land to the government to cover part or all of the money owing?
Finder
SarahMay 30, 2024Finder
Hi Bruce,
We’re not licenced to provide legal advice or taxation advice, but you should be able to confirm this with the ATO directly: you can call them on 13 28 66.
Hope this helps.
DCRMay 15, 2024
Hi there, my husband and I want to sell a half share in our investment property to my brother who currently resides in Italy but is a New Zealand citizen. We live in WA. I understand there are additional charges for overseas investors. Any advise on the process would be much appreciated.
Finder
SarahMay 30, 2024Finder
Hi there,
Yes, there are additional charges. In WA, the additional fee is quite high at 7%. This is on top of regular stamp duty.
From supply and demand through to location, facilities and planned infrastructure projects, there are plenty of factors that can influence property value.
Get the most out of your property sale with the right real estate agent with these simple tips.
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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.
If our son tried to buy his house in 2009 and could not afford it so my husband and I took out the mortgage,
which money is still owing, and he still lives in it. Can we put it into his name, now that we are getting older, and what fees and charges would we have to pay.
Hi Maretta, This is a complex situation. If the mortgage is transferred, then your son will effectively have responsibility for it – so he’ll need to be able to demonstrate that he can afford the repayments. There would also be fees associated with transferring the mortgage and the proerty title (these would vary somewhat depending on the existing provider and also potentially which state you’re in). Given all that complexity, talking to a specialist financial advisor would be a sensible move.
we have a family shack that is in my mothers name, she is 97 can she gift the property to myself what costs if any will ne involved
Yes, you will be required to pay stamp duty. The amount depends on where you live, the value of the property and whether you’re entitled to a stamp duty waiver or not. Generally when you an inherit a property you don’t have to pay stamp duty (for up to 2 years after the owner passes), so that might be an option if you want to avoid paying stamp duty.
Hope this helps!
I have a step brother in law who wants to go into care. He has given us in his will all of his assets including his house of 20 years.
Now with him going into care he has no use for his house, so he wants us to take it now.
I read you article on Gifting and do wonder how my costs (stamp duty) might be less or the same if we waited until he has passed away to take possession.
Hi Howard, This is a complex question and you’ll definitely need to get independent legal and financial advice to work out the best approach (as will your brother in law). As well as stamp duty, there are also potential considerations around capital gains and title transfer. Good luck!
Hi, I have a block of land worth about $100,000 I would like to gift to my son (residing on the property).
Whilst I dont know the money involved I do know he has unpaid government debt (Child support and unsubmitted tax returns)
Would he lose the land to the government to cover part or all of the money owing?
Hi Bruce,
We’re not licenced to provide legal advice or taxation advice, but you should be able to confirm this with the ATO directly: you can call them on 13 28 66.
Hope this helps.
Hi there, my husband and I want to sell a half share in our investment property to my brother who currently resides in Italy but is a New Zealand citizen. We live in WA. I understand there are additional charges for overseas investors. Any advise on the process would be much appreciated.
Hi there,
Yes, there are additional charges. In WA, the additional fee is quite high at 7%. This is on top of regular stamp duty.
You can learn more about the fees and the process here.
Hope this helps!