Gifting property is not free; stamp duty on market value and potential capital gains tax apply.
Valuation costs often range from $300 to $900, crucial for market value assessments.
CGT exemptions apply if the property was acquired before 20 September 1985 or is your main residence.
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.
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 Senior Money Editor, with over eight years of experience in home loans, property, credit cards 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 started his career in education and textbook publishing in South Korea. He 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 Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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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.
Can I add my wife’s name to the title of our investment property ? This was overlooked at purchase time due to incorrect advice.
Finder
SarahJune 27, 2024Finder
To add your wife to the title, you will need to “sell” half of the property to her, and she will incur stamp duty costs. It might be worth speaking to a solicitor and financial advisor to get an understanding of the costs involved and what options you can explore.
BillieFebruary 19, 2024
Hi I am 50 and own my own home . I am in process of downsizing due to my disability so I’m in process of building new home . However builder Porter Davies went broke and I am way too sick to build another home . Also due to disability I can not get a loan. Can I my 17 years old son the land (land valued $270 000 , I paid $260000 for it ) to build his main residence. I would have made no money on it after all expenses . What do I have to pay to transfer to him how much would transfer cost him ? How much it will cost me .
Finder
SarahFebruary 20, 2024Finder
Hi Billie, Sorry to hear about your situation. You could gift the land to your son, but he would be required to pay stamp duty. The good news is, depending on where you live, if your son is a first home owner, he should be eligible for a discount or waiver on stamp duty. Your best bet is to contact the Office of State Revenue in your state or territory to ask what the waiver or discount is.
Hope this helps!
VNJanuary 9, 2024
I am owner occupier of a flat in nsw ( Main residence). There is no loan on the property. I want to add my wife and daughter’s name to the title. There is no issue adding my wife who lives with me to the title, however, my daughter is married and lives in her own flat. Will adding her name to the title trigger a CGT event or does she need to pay any stamp duty.
As alternative will she have to pay stamp duty / trigger CGT event if she received / changes the title of the flat I own via a will after my death.
Which is better option to inherit the flat.
Finder
RichardJanuary 10, 2024Finder
I suggest getting a conveyancer (a legal professional) to help with this. Generally, you don’t pay stamp duty on inherited property. If you add someone’s name to a title who isn’t your spouse, they may be liable for 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.
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!
Can I add my wife’s name to the title of our investment property ? This was overlooked at purchase time due to incorrect advice.
To add your wife to the title, you will need to “sell” half of the property to her, and she will incur stamp duty costs. It might be worth speaking to a solicitor and financial advisor to get an understanding of the costs involved and what options you can explore.
Hi I am 50 and own my own home . I am in process of downsizing due to my disability so I’m in process of building new home . However builder Porter Davies went broke and I am way too sick to build another home . Also due to disability I can not get a loan. Can I my 17 years old son the land (land valued $270 000 , I paid $260000 for it ) to build his main residence. I would have made no money on it after all expenses . What do I have to pay to transfer to him how much would transfer cost him ? How much it will cost me .
Hi Billie, Sorry to hear about your situation. You could gift the land to your son, but he would be required to pay stamp duty. The good news is, depending on where you live, if your son is a first home owner, he should be eligible for a discount or waiver on stamp duty. Your best bet is to contact the Office of State Revenue in your state or territory to ask what the waiver or discount is.
Hope this helps!
I am owner occupier of a flat in nsw ( Main residence). There is no loan on the property. I want to add my wife and daughter’s name to the title. There is no issue adding my wife who lives with me to the title, however, my daughter is married and lives in her own flat. Will adding her name to the title trigger a CGT event or does she need to pay any stamp duty.
As alternative will she have to pay stamp duty / trigger CGT event if she received / changes the title of the flat I own via a will after my death.
Which is better option to inherit the flat.
I suggest getting a conveyancer (a legal professional) to help with this. Generally, you don’t pay stamp duty on inherited property. If you add someone’s name to a title who isn’t your spouse, they may be liable for stamp duty.