If the cost of living crisis and rising interest rates have prompted you to consider lending your
child/ren some money to purchase their first home, we urge you to read the following article on how
to do this in the safest way possible – for you and them.
By Jamal Bakalian
The problem facing most Australians…
Streeterlaw understands that the current cost of living crisis alongside rising interest rates, has
prompted a lot of families to sit down at the dinner table and discuss lending money to their
children earlier than they would have expected to, to help their children get into the
property market.
If this sounds like something your family is considering, there are a few things for you to keep in
mind to protect your assets whilst lending a helping hand to your child/ren.
The proposal
In circumstances such as this, your specialist Streeterlaw Solicitors will generally encourage the
preparation of a written agreement between the parents and child/ren to document the terms of
the gift/loan. We will also encourage you, as parents, to consider the impact of this gift/loan on your
estate plan and we have the expertise in-house to help you update it accordingly.
We encourage parents to think carefully about the following elements when considering a loan or
‘gift’ they wish to advance to their child/ren:
- How much is it wise to gift/lend?
- Would it be wise to have a registered mortgage or interest on the title of the home that
their child/ren purchases? - Do they expect the gift/loan to be repaid? If so, what is the time frame?
- If they wish for the gift/loan to be repaid, will there be interest attached? If so, at what
percentage?
Our specialist Streeterlaw Solicitors will talk you through each of the above considerations to help
you work out what type of written agreement will work best for your situation.
The solution
Our astute commercial lawyers and wise estate planning team will:
Undertake an assessment of your assets, risk profile, and estate planning considerations for
your retirement and beyond;
Advise you to the most appropriate plan forward to safeguard you at present and
future-proof your position; and,
Prepare the necessary documents to give effect to this gift/loan, including lodging
instruments on the title if need be.
Contact Streeterlaw today (02) 8197 0105 to protect you during this generous act of lending.
