Family Gift or Loan SA: 7 Checks Before You Transfer

Legal Video Guides › Family gift or loan

By Manal Amro, Principal Solicitor, PA Law Pty Ltd. Updated 15 October 2026.

Watch: family gift or loan for a home deposit

Family gift or loan: 7 checks before you transfer

Helping a child buy a home can involve substantial savings. These questions help South Australian families prepare for a legal appointment and discuss expectations before a deposit deadline creates pressure.

1. Does everyone expect repayment?

Talk about the amount and purpose of the payment. Ask each person to explain what they understand: is the money an outright gift, a loan, or subject to another arrangement? Avoid relying on phrases such as “we’ll sort it out later”. Write down the agreed intention and get advice before funds leave your account.

2. Who is borrowing the money?

Identify the lender and every intended borrower. If your child is buying with a partner, clarify whether one or both will be responsible. Bring the proposed ownership details to your lawyer. The people buying the property and the people promising repayment need to be considered together.

3. When and how will the loan be repaid?

Record the amount, repayment schedule, interest arrangements and relevant dates or events. Discuss what happens if a payment is missed, the home is sold or the borrowers’ circumstances change. Keep signed documents and a record of transfers and repayments. Legal Aid NSW’s private loan guidance explains why clear terms and payment records matter.

4. Does the lender’s paperwork match the arrangement?

If repayment is expected, do not sign a declaration describing the money as an unconditional gift. Tell the home lender and your lawyer the actual arrangement. For example, Bankwest’s gifted funds declaration describes the funds as non-repayable. Check the particular documents you are asked to sign.

5. What protection is appropriate?

Ask your lawyer whether security is appropriate and what existing mortgage arrangements permit. Lending money does not automatically give you a right to lodge a caveat. A written agreement also cannot guarantee recovery if money or property is unavailable. The Legal Practitioners’ Liability Committee’s parent-to-child loan guide explains these risks and the importance of independent advice.

6. What should happen under your Will?

Discuss whether an outstanding loan should be collected by your estate, forgiven, or considered when calculating a child’s inheritance. Think about the effect on other beneficiaries. Do not assume the debt disappears when you die. Ask for your loan documents and Will to be considered together as part of your estate planning.

7. Can you afford the arrangement?

Consider your own living costs and what a delayed repayment would mean. Seek independent legal advice before committing, and financial or Centrelink advice where relevant. Giving or lending money can affect benefits. Legal Aid NSW’s family financial assistance guide discusses the personal risks and the importance of protecting your own position.

Gift or loan: what should be clear?

Questions to discuss before helping with a home deposit
Issue	Gift	Loan
Repayment	Generally not expected	Intended on agreed terms
Documents	Record the intention and any conditions	Record borrowers, amount and repayment terms
Estate planning	Consider the effect on other beneficiaries	Address any unpaid balance in your planning

Read the companion script

You’re giving your child a hundred thousand dollars to help buy a home.

You see it as a loan. They see it as a gift.

What happens when you ask for it back?

Before transferring money, make sure everyone understands the arrangement.

A gift generally comes without an expectation of repayment. A loan is intended to be repaid—and the terms should be clearly documented.

Who is borrowing the money: your child, their partner, or both?

When must it be repaid? Will you charge interest? And what should happen if the property is sold or their circumstances change?

If you expect repayment, don’t sign paperwork describing the money as an unconditional gift.

You should also consider how the arrangement fits with your Will. What do you intend to happen to any unpaid loan when you die? And how does that fit with what you want to leave your other children?

A written agreement can help clarify everyone’s expectations, but it does not guarantee you will recover the money.

Before helping family with a property deposit, get independent legal advice.

At PA Law, we can help you document your intentions and consider how the arrangement fits with your estate planning.

Frequently asked questions

What is the difference between a family gift and a loan?

A gift generally carries no expectation of repayment. A loan is intended to be repaid on agreed terms. Record the arrangement clearly before transferring money, including whether any conditions apply.

Should I sign a gift letter if I expect repayment?

No. If you expect repayment, do not describe the money as an unconditional, non-repayable gift. Tell your lawyer and the home lender about the actual arrangement before signing any declaration.

Does a written family loan agreement guarantee repayment?

No. A written agreement helps establish what was agreed, but recovery depends on the agreement, the evidence, available assets and the circumstances. Obtain advice about security and enforcement risks.

What happens to a family loan when the parent dies?

An unpaid loan may be an asset of the parent’s estate. Discuss whether it should be collected, forgiven or taken into account in the borrower’s inheritance, and ensure the loan documents and Will work together.

Can PA Law help document a family loan in South Australia?

PA Law can help you document your intentions and consider the arrangement alongside your estate planning. Contact the firm before transferring money so it can assess your circumstances and any need for separate advice for the borrower.

Discuss your family loan and estate planning

PA Law assists clients in Evanston South, Gawler, Adelaide and across South Australia. Bring any draft loan terms, gift declarations, property purchase documents and your current Will to your appointment.

Contact PA Law or call 0431 614 696.