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.
Hi my mum wants to gift her house to me there is no mortgage left on the property and is owned out right what would the fees and stamp duty be.. I am also in a government pension.. never owned a home before so it will be my first home.. this will be my primary living hose so will be lived in by me
Finder
RichardMay 13, 2022Finder
Hi Kelky,
You will have to pay stamp duty based on the property’s market value. So even if you don’t pay anything to buy the property, you are charged stamp duty based on an estimate of how much the property would sell on the market.
If you’ve never owned a home before you might qualify for a stamp duty exemption or discount depending on the value of the house and the rules in your state or territory.
To get an estimate of the costs I suggest searching for your state or territory government’s stamp duty calculator (Revenue NSW in NSW, or the State Revenue Office in Victoria, for example).
You may also have to pay a conveyancer to help you organise the paperwork (and advise you on the stamp duty costs). This varies by conveyancer and is worth factoring in too.
I hope this helps.
Regards,
Richard
KimberlyApril 21, 2022
My parents have lived in their property for over 15 years and paid the deposit and continue to the pay the mortgage and rates associated. The house is under my name. How do I transfer the deeds to them with minimal fees? Thank you
Finder
RichardApril 25, 2022Finder
Hello Kimberly,
To transfer ownership of the property you need to complete a property transfer form. You can usually find this on the website of your state or territory government’s state revenue office (or equivalent).
There are costs involved with this. Your parents will have to pay stamp duty based on the market value of the property if you transfer ownership to them. If it’s an investment property (not your house) then you will have to pay capital gains tax too.
Talking to a conveyancer might be a good idea as they can help you understand the process and costs.
Kind regards,
Richard
markApril 14, 2022
My father is dying and wishes to sell his house and share the proceeds amongst his children .
Would this be more financially better or would waiting till after his death be better.
I am asking on his behalf as I would prefer to wait till he has passed.
Thankyou.
Finder
SarahApril 21, 2022Finder
Hi Mark,
I’m sorry to learn about your father’s condition.
Transferring property titles and/or selling a house both have their own merits, but of course, each also has its own set of costs.
If your father would rather sell his property now, the following costs are usually involved: agent commission, conveyancing and/or solicitor fees, removal costs for getting all of the personal belongings out of the house, repairs, etc. You can read our guide on how to sell your house as a reference.
Majority of these costs will still apply after he passes. However if the property is currently an investment property, there may be different tax considerations (such as capital gains tax) which would make it financially more advantageous to sell the property after he passes.
It would be worth seeking help from an experienced lawyer and/or accountant as this is their area of expertise, and they can help you make a decision that suits your circumstances.
I hope this helps and best of luck.
Regards,
Sarah
virginiaApril 7, 2022
my father has till July to live he wants to gift his house to his two daughters does that mean paying CGT or stamp duty the house is his principle place of residence and is in sydney
you didn’t answer my question
Finder
RichardApril 16, 2022Finder
Hi Virginia,
If your father has been living at the property and has indicated it as his main place of residence then he may be exempt from CGT when gifting it.
Stamp duty will apply when changing ownership. The rules may vary between states and territories, so it would be worth contacting the Office of State Revenue in your state or territory for more information relevant to your situation.
It might be best to seek professional assistance from a property lawyer to get personalised advice on your situation as this is their area of expertise.
I hope this helps.
Regards,
Richard
GarryApril 6, 2022
My wife and I purchased a small investment property jointly with my in laws in 1993 for $90k. In 2007 they wished to gift us their share of property as way of paying forward my wife’s inheritance. Property was duly transferred to us with a registered valuation done, showing total market value at $180k – their share $90k which duly transferred to my wife and I and stamp duty paid on that amount.
We are now looking to sell the property for about $300. How do I calculate and set out capital gains position for ATO?
Finder
SarahApril 7, 2022Finder
Hi Harry,
In a unique situation like this, we would definitely advise you to get personalized advice from the ATO or a licensed accountant, as we’re not in a position to provide personal advice.
However, we can confirm that because you’ve owned the property for longer than 12 months, you’re entitled to the 50% CGT discount. This means your capital gain (however the ATO/your accountant advises it is calculated) will be reduced by 50% when you add it to your taxable income in the year you sell the property.
For instance, for the portion of full ownership (2007-now) the gain is roughly $120k. This would be reduced to $60k for CGT purposes. Expenses involved in selling the property such as agents commission and any stamp duty you’ve paid along the way can be offset against this gain.
Again, strongly recommend you get personal advice to work out how to maximize your tax deductions in this instance.
Hope this helps!
Cheers
Sarah
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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 my mum wants to gift her house to me there is no mortgage left on the property and is owned out right what would the fees and stamp duty be.. I am also in a government pension.. never owned a home before so it will be my first home.. this will be my primary living hose so will be lived in by me
Hi Kelky,
You will have to pay stamp duty based on the property’s market value. So even if you don’t pay anything to buy the property, you are charged stamp duty based on an estimate of how much the property would sell on the market.
If you’ve never owned a home before you might qualify for a stamp duty exemption or discount depending on the value of the house and the rules in your state or territory.
To get an estimate of the costs I suggest searching for your state or territory government’s stamp duty calculator (Revenue NSW in NSW, or the State Revenue Office in Victoria, for example).
You may also have to pay a conveyancer to help you organise the paperwork (and advise you on the stamp duty costs). This varies by conveyancer and is worth factoring in too.
I hope this helps.
Regards,
Richard
My parents have lived in their property for over 15 years and paid the deposit and continue to the pay the mortgage and rates associated. The house is under my name. How do I transfer the deeds to them with minimal fees? Thank you
Hello Kimberly,
To transfer ownership of the property you need to complete a property transfer form. You can usually find this on the website of your state or territory government’s state revenue office (or equivalent).
There are costs involved with this. Your parents will have to pay stamp duty based on the market value of the property if you transfer ownership to them. If it’s an investment property (not your house) then you will have to pay capital gains tax too.
Talking to a conveyancer might be a good idea as they can help you understand the process and costs.
Kind regards,
Richard
My father is dying and wishes to sell his house and share the proceeds amongst his children .
Would this be more financially better or would waiting till after his death be better.
I am asking on his behalf as I would prefer to wait till he has passed.
Thankyou.
Hi Mark,
I’m sorry to learn about your father’s condition.
Transferring property titles and/or selling a house both have their own merits, but of course, each also has its own set of costs.
If your father would rather sell his property now, the following costs are usually involved: agent commission, conveyancing and/or solicitor fees, removal costs for getting all of the personal belongings out of the house, repairs, etc. You can read our guide on how to sell your house as a reference.
Majority of these costs will still apply after he passes. However if the property is currently an investment property, there may be different tax considerations (such as capital gains tax) which would make it financially more advantageous to sell the property after he passes.
It would be worth seeking help from an experienced lawyer and/or accountant as this is their area of expertise, and they can help you make a decision that suits your circumstances.
I hope this helps and best of luck.
Regards,
Sarah
my father has till July to live he wants to gift his house to his two daughters does that mean paying CGT or stamp duty the house is his principle place of residence and is in sydney
you didn’t answer my question
Hi Virginia,
If your father has been living at the property and has indicated it as his main place of residence then he may be exempt from CGT when gifting it.
Stamp duty will apply when changing ownership. The rules may vary between states and territories, so it would be worth contacting the Office of State Revenue in your state or territory for more information relevant to your situation.
It might be best to seek professional assistance from a property lawyer to get personalised advice on your situation as this is their area of expertise.
I hope this helps.
Regards,
Richard
My wife and I purchased a small investment property jointly with my in laws in 1993 for $90k. In 2007 they wished to gift us their share of property as way of paying forward my wife’s inheritance. Property was duly transferred to us with a registered valuation done, showing total market value at $180k – their share $90k which duly transferred to my wife and I and stamp duty paid on that amount.
We are now looking to sell the property for about $300. How do I calculate and set out capital gains position for ATO?
Hi Harry,
In a unique situation like this, we would definitely advise you to get personalized advice from the ATO or a licensed accountant, as we’re not in a position to provide personal advice.
However, we can confirm that because you’ve owned the property for longer than 12 months, you’re entitled to the 50% CGT discount. This means your capital gain (however the ATO/your accountant advises it is calculated) will be reduced by 50% when you add it to your taxable income in the year you sell the property.
For instance, for the portion of full ownership (2007-now) the gain is roughly $120k. This would be reduced to $60k for CGT purposes. Expenses involved in selling the property such as agents commission and any stamp duty you’ve paid along the way can be offset against this gain.
Again, strongly recommend you get personal advice to work out how to maximize your tax deductions in this instance.
Hope this helps!
Cheers
Sarah