With the way the Sydney property market has been behaving lately, we have been seeing more and more parents providing money to their children to purchase property. This seems like a very innocent thing to do, but it can lead to some legal issues which you did not think about.
The questions which are important to consider are:
Is the money a gift or loan?
This is an important question for the bank to know if your children are also looking to get a loan with the Bank to top up the amount for a purchase. If it is a loan the Bank may not loan any further money.
Is it a gift you have provided for your other children as well?
Do you want your children to benefit equally under your will?
Have you noted this gift and any other gifts in your will?
If it is a gift and your child is in a married or in a defacto relationship are you happy for their partner to retain some benefit from this if they were to split up?
If it is a loan what are the terms for repayment?
If you are considering assisting your children with the purchase of property please speak to a member of our Property team before purchasing any property. Our Family Law team is also happy to assist you with any questions that you may have on what happens if you give a gift to your child and they split up with their partner.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.