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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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.
Finder
RichardJune 8, 2022Finder
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
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.
Finder
RichardJune 9, 2022Finder
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
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?
Finder
RichardJune 1, 2022Finder
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
JoMay 13, 2022
My Mother has lived in the family home for over 40 years. Since my Dad passed away, one of my brothers has lived there with her. She is quite independent for her age (87), but it is great peace of mind for me (I live interstate) that he is there should she need him. He has spent quite a lot of his own money on improvements on the home in the last few years. I have 4 other siblings, who don’t do a lot for her – but think they are entitled to their share of her home when she passes. They all have their own homes, so I think it’s only fair that my brother inherits the family home. I recently stumbled across the idea of gifting her home to him, but I am unsure of the costs involved? I believe that he wouldn’t have to pay cgt, but would be up for stamp duty. I this correct?
Finder
RichardMay 28, 2022Finder
Hi Jo,
Thank you for explaining the situation. The first thing you need to do is to speak with the homeowner, the person whose name is on the property title since you would not be able to transfer the deed without their approval.
Gifting the property to your brother will incur stamp duty based on an estimate of how much the property would sell on the market.
If your brother has never owned a home before, 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.
To get an estimate of the costs, you can search for your state or territory government’s stamp duty calculator (Revenue NSW in NSW, or the State Revenue Office in Victoria, for example).
If the property has been your mother’s primary residence, then she won’t have to pay CGT when selling/gifting the property.
Please note this is general information only. It’s a good idea to talk to a conveyancer or solicitor for personal legal advice.
I hope this helps.
Regards,
Richard
kellyMay 12, 2022
I want to gift my house to my daughters but still live in it. It will still have a mortgage left, what will be the cost?
Finder
RichardMay 13, 2022Finder
Hi Kelly,
Transferring the property title to your daughter will incur stamp duty. Having a mortgage over the property is not a problem but you’ll need to notify your lender. Since the lender will still be listed on the property title, they will have to approve the mortgage to be transferred to your daughter as well.
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.
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.
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
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.
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
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?
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
My Mother has lived in the family home for over 40 years. Since my Dad passed away, one of my brothers has lived there with her. She is quite independent for her age (87), but it is great peace of mind for me (I live interstate) that he is there should she need him. He has spent quite a lot of his own money on improvements on the home in the last few years. I have 4 other siblings, who don’t do a lot for her – but think they are entitled to their share of her home when she passes. They all have their own homes, so I think it’s only fair that my brother inherits the family home. I recently stumbled across the idea of gifting her home to him, but I am unsure of the costs involved? I believe that he wouldn’t have to pay cgt, but would be up for stamp duty. I this correct?
Hi Jo,
Thank you for explaining the situation. The first thing you need to do is to speak with the homeowner, the person whose name is on the property title since you would not be able to transfer the deed without their approval.
Gifting the property to your brother will incur stamp duty based on an estimate of how much the property would sell on the market.
If your brother has never owned a home before, 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.
To get an estimate of the costs, you can search for your state or territory government’s stamp duty calculator (Revenue NSW in NSW, or the State Revenue Office in Victoria, for example).
If the property has been your mother’s primary residence, then she won’t have to pay CGT when selling/gifting the property.
Please note this is general information only. It’s a good idea to talk to a conveyancer or solicitor for personal legal advice.
I hope this helps.
Regards,
Richard
I want to gift my house to my daughters but still live in it. It will still have a mortgage left, what will be the cost?
Hi Kelly,
Transferring the property title to your daughter will incur stamp duty. Having a mortgage over the property is not a problem but you’ll need to notify your lender. Since the lender will still be listed on the property title, they will have to approve the mortgage to be transferred to your daughter as well.
Regards,
Richard