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How to transfer property title between family members at minimal cost

Learn how much you'll pay in taxes and fees when gifting property to a family member.

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There are many reasons why people are keen to know how to transfer property title between family members. 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 a given as a gift.

You generally still have to pay stamp duty on the market value of your property and potentially capital gains tax (CGT) as well.

Knowing the proper way to transfer property within your family, and how to avoid being charged hefty fees is essential when thinking about any kind of property transfer. And however you decide to execute the property transfer it is vital to have a qualified conveyancer or solicitor guide you through the process.

Ways to transfer the property

There are two 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. This simply requires filling out the necessary paperwork with your state revenue office and title office, including a Transfer of Land. Your conveyancer may advise you to organise a Deed of Gift as well.

No money changes hands in this scenario, but you are still liable for the paperwork processing fees and the stamp duty costs. If the property was not the seller's primary residence there will likely be CGT costs as well (more on that below).

Sale

You can of course sell your property to a family member. Parents will often sell to a child this way, and may adjust the price to cover their costs while offering their child a better deal than they would have received on the market.

But again you will be liable for stamp duty and it will be calculated based on the property's market value and not the sale price (if selling at a discounted price). 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.

Professional valuation

Even when selling or gifting a property to a family member you need to determine 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.

The Australian Tax Office says, "You should obtain a valuation from a professional valuer, or work out the market value yourself using reasonably objective and supportable data. This can include the price paid for very similar property that was sold at the same time in the same location."

What fees 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:

Fees paid by the original owner

  • Capital Gains tax (CGT). The CGT cost will depend on the amount of capital gain or capital loss resulting from the CGT event. In 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.
  • 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 will know how much you will report that you have gained or loss when filing your income taxes. Independent valuations cost between $300 - $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, and personal details for both parties. These legal documents can be used in case the validity of the property transfer is ever questioned.

Fees 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 office of revenue. Stamp duty is calculated based on the state you're in. Use our calculator for a rough guide on how much this would be.
  • Legal fees. You should have a conveyancer check over everything before signing.

Example transaction: selling a property to a family member at a discount

Vanessa and James own a home in NSW. They sell it to their son Tom for $300,000, knowing that it's true value is higher. Tom pays them $300,000 and Vanessa and James get a professional property valuer to look at the property. The valuer puts the property's market value at $500,000.

Tom's costs therefore are:

  • Sale price: $300,000
  • Stamp duty (calculated on $500,000 for non-first home buyers): $17,990
  • Transfer and mortgage registration fees: $328

Vanessa and James have used the house as their primary residence for more than ten years. Therefore they won't have to pay CGT.

How to avoid fees and charges when transferring property

When you gift your property you are still charged CGT, 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 arms 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 (ie. the address is on your current driver’s license and you receive mail there) then you may be exempt from CGT when gifting or selling a property to another.

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150 Responses

  1. Default Gravatar
    PCJune 15, 2022

    I own a property with my brother (50%/50%). We have owned it for almost 20 years, and I will soon be moving offshore for work. My brother has lived in the property for most of this time, and I have lived there intermittently. If I was to sell the property to him, I assume he would have to pay stamp duty? Also, would we have to get a valuation re price, or are we ok to sell at a mutually agreed price?

    • Avatarfinder Customer Care
      RichardJune 18, 2022Staff

      Hi PC,

      If your brother buys your half of the property he will have to pay stamp duty on the market value of the property (50% of it, if buying your half). This is true even if you agree to sell to him at a lower price (which you are allowed to do).

      It would be advisable to speak with a conveyancer. They will be able to give you the most accurate assessment of all the costs involved and identify any discounts or exemptions.

      I hope this helps.

      Regards,
      Richard

  2. Default Gravatar
    IanJune 8, 2022

    What happens if the parent gifts the property to two of their children and then those children sell the property. Does that mean the children will have to pay capital gains tax?

    • Avatarfinder Customer Care
      RichardJune 16, 2022Staff

      Hi Ian,

      To avoid capital gains tax on a property you need to live in it as your principal place of residence (your home) for 12 months.

      If the children haven’t owned the property for at least 12 months and aren’t living in it, then CGT may apply. You can read our guide on capital gains tax on property for more information about this.

      I hope this helps!

      Regards,
      Richard

  3. Default Gravatar
    MarkJune 6, 2022

    My mother purchased a property in Qld for me to live in, and I reside in it.
    She wishes to ADD my name to her property title for it.
    Do we get a Qld conveyancer to do this with the Titles QLD office?

    I have never owned a property before, so am I exempt from stamp duty on my share?
    Also, since it’s a private home, not an investment property, are we exempt from CGT?
    Thanks.

    My mother wants to add my name to hers on the title of a house she bought for me to live in here in Queensland.

    What are the steps to do this?
    Do we get a Queensland conveyancer to do this with the Titles Office ?
    Thanks.

    • Avatarfinder Customer Care
      RichardJune 8, 2022Staff

      Hi Mark,

      You do have to pay a bit of money to use a conveyancer but they can definitely help you navigate this. You may be able to get an exemption on stamp duty and avoid any CGT if your mother has owned the property for more than 12 months and lives in it. But it can be complicated, so it’s worth getting professional help.

      Kind regards,
      Richard

  4. Default Gravatar
    TessJune 3, 2022

    My husband’s share on our house which is 50% is going to be gifted to our only son. Therefore the ownership will be between me and my son. My son is 37 years old and live with us in the house since birth. This will be his first ownership of a home. The estimate value of 50% is 600,000. Will he be exempted from paying stamp duty? We plan to have it done by a conveyancing lawyer. We know we will have to pay other expenses but only small amount.

    • Avatarfinder Customer Care
      RichardJune 9, 2022Staff

      Hi Tess,

      Transferring the property title to your son may incur stamp duty based on an estimate of how much the property would sell on the market. So 50% of $600,000 would equal stamp duty charged on $300,000.

      As a new homeowner, he might qualify for a stamp duty exemption or discount depending on the value of the house and the rules in your state or territory.

      It’s good that you have a conveyancer to handle this. They will be able to give you the most accurate assessment of all the costs involved and identify any discounts or exemptions.

      I hope this helps.

      Kind regards,
      Richard

  5. Default Gravatar
    robMay 30, 2022

    hi, my mother-in-law moved into our home 3 years ago after her husband passed. We’re exploring wether she can buy part or percentage of our house (ie 10% val = $250k). she is 86 and on a pension, but has some good savings from the sale of her last house. what can she do to pay and become part of our property ownership?

    • Avatarfinder Customer Care
      RichardJune 1, 2022Staff

      Hello Rob,

      You would need to add your mother-in-law to the property title. This involves completing a form usually available through your state government’s revenue office website. It might be a good idea to talk to a conveyancer as they can help you understand the full legal details.

      Your mother-in-law might also need to pay stamp duty on the portion of the property she will purchase. This is an important cost to consider.

      Kind regards,
      Richard

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