Finder makes money from featured partners, but editorial opinions are our own.

Fees when gifting or transfering a property title to a child or family member

Everything you need to know when transferring a property tile, including the different ways to transfer and understanding the costs.

Avatar

By

Richard Whitten

Reviewed by

Rebecca Pike

Updated

Fact checked

Can I gift my house to a family member for free?

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.

Accessing property titles varies by state and territory.

Do you have to pay stamp duty on a gifted property?

You generally 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.

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, you may be entitled to a discount or waiver on stamp duty.

[important text] Learn how much stamp duty you may have to pay [/important text]

If you're 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."

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.

Use our stamp duty calculator for a guide on how much stamp duty may cost.

Ways to transfer the property

There are 2 ways you can transfer a property to a family member: gifting and selling.

Gift box

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).

Money

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

Money, dollar, coinValuation 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.

Money, dollar, coinLegal 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.

Money, dollar, coin 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

Money, dollar, coinStamp 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.

Money, dollar, coin 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.

Example: Selling property to a family member at a discount

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.

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

168 Responses

    Default Gravatar
    kathyOctober 9, 2023

    I want to contribute substantially to my sons new home by selling mine and move in with him and his family – will i lose my pension

    Reply
      AvatarFinder
      RichardOctober 10, 2023Finder

      Hi Kathy,

      I suggest talking to a financial advisor. Your home is generally exempt from the pension asset test but if you sell it then the cash may push your total asset amount over the threshold.

      You can find out more here.

      Reply
    Default Gravatar
    MishaJuly 2, 2023

    Hi, my Mum and her sister own a property as tenants in common with equal shares.
    My Mother has not resided in the property for many years, her sister has.
    My Mother is wanting to sell but her sister doesn’t want to. Can she just tell my Mum she has to wait?

    Reply
      AvatarFinder
      RichardJuly 3, 2023Finder

      Hello Misha,

      Under a tenants in common ownership scenario, each owner can sell their share of the property but cannot force the other person to sell their share.

      This is a tricky situation and I suggest getting some legal advice from a professional.

      Reply
    Default Gravatar
    DevaJune 2, 2023

    I want to gift out house to my grandchildren 2 or maybe 3 but 2 definitely. I’ve got an idea on how to do it but any advice would be happy to have. I have a grandson who as had a fair fk up it life. It’s on 7 acre and I want to done asap. Plz help with any advice. Both are over 18.

    Reply
      AvatarFinder
      SarahJune 11, 2023Finder

      Hi Deva,

      We are not licenced to provide personal financial advice so unfortunately we can not make any suggestions. However, because you’re dealing with high value assets, you’re best off engaging a lawyer to assist you with managing this transaction.

      All the best!

      Reply
    Default Gravatar
    TheresaMay 20, 2023

    I brought an investment property not quite 12 months ago with a tenant in place. My daughter would like to buy it when she sells her own home. How can I make this a fair transaction between the two of us? What are our options.

    Reply
      AvatarFinder
      RebeccaJune 9, 2023Finder

      Hi Theresa,

      There are still fees to pay even when you sell property to a family member, so it’s important that you’re both aware of those. Even if you sell the property at a discounted price, your daughter would need to pay stamp duty on the full market value.

      As a comparison site we provide general information in our guides, but we cannot offer any advice on specific situations. You should get in touch with a qualified conveyancer to talk through your options.

      Rebecca

      Reply
    Default Gravatar
    RossMarch 20, 2023

    Our family home is on a large block of land 6000m2 my two sons are looking to build their first homes on it as well. I’m hoping not to subdivide the block at this stage and add both sons to the title. Im thinking that there would be no stamp duty incurred as they are first home buyers in NSW

    Reply
      AvatarFinder
      RichardMarch 22, 2023Finder

      Hi Ross,

      In these kinds of complicated transactions I suggest talking to a conveyancer first. Even first home buyers can sometimes pay stamp duty, depending on the value of the property.

      Reply
Go to site