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The Tricky Reality Of Transferring Property To Your Children

Many parents have been able to help their children get on the property ladder by gifting money or signing on as a mortgage guarantor. But some parents might choose to go a step further and transfer a property to their child, no strings attached.

Gifting your child a property can be one of the most generous things you can do for them, but there’s more to it than just swapping out the name on the title. You and your child might face significant costs, and it pays to be aware of them before making any decisions.

Capital gains tax (CGT)

The ATO is clear that when you sell, transfer or gift a property to family or friends for less than it’s worth, you’ll be treated as if you received the current market value of the property for tax purposes.1

This is known as the market value substitution rule, and it’s in place to make sure the appropriate amount of tax is paid on a capital gain or loss, even when parties are dealing with each other on non-commercial terms.

What this means is that if you’re transferring a property to your child and it’s increased in value since you purchased it, you’ll have to pay capital gains tax on the profit, even though no money is changing hands and the profit remains unrealised.

Of course, you might be eligible for the CGT discount depending on how long you held the property. And you might be able to decrease your tax burden further by including the cost of surveyors, accountants, real estate agents and repairs (among other eligible items) in the property’s cost base. There’s also the possibility that you’ll be exempt from paying CGT altogether if the property was your main residence.

Transfer duty

CGT isn’t the only cost that might pop up — your child might have to pay transfer duty (or stamp duty as it used to be known). As with CGT, the current market value of the property is used to determine how much transfer duty is levied. And, ultimately, the amount payable will vary depending on your state or territory.

What if the property is mortgaged?

Transferring a property between family members can be complicated enough, but things can get even more tricky if the property is still mortgaged. As the mortgage will be transferred along with the property, your bank or lender will subject your child to all the usual checks to make sure they can comfortably service the loan. Along with ongoing repayments, there might also be upfront costs your child will need to budget for, such as mortgage registration or insurance fees.

Will gifting affect my Centrelink entitlement?

If you’re currently receiving any Centrelink payments, you should remember that gifted money, income or assets (including property) can still be deemed to belong to you for the purposes of the income and assets test. It’s generally a good idea to speak to a financial adviser before making any property transfers to find out if your payment will be affected.

What else do I need to know?

As any CGT and transfer duty will typically be based on the market value of the property, it can be a good idea to engage a professional valuer to handle the job for you. This can help assure the ATO that you haven’t undervalued your property to get out of paying the correct amount of tax.

There’s also the matter of your retirement and how it might be impacted by giving away such a large asset. A serious discussion should be had with your family, as well as your financial adviser, about whether you’ll have enough capital left over to enjoy the retirement you want.

Finally, if you’re certain that you want to go through with the transfer, it can be a good idea to have a lawyer draw up a deed of gift. This formalises the agreement between you and your child and, once signed, ultimately means you will no longer control the property.

Are there other ways you can help your children?

In the end, you might feel that transferring a property to your child while alive is too complicated or costly, and decide instead to pass it on via your Will. This doesn’t mean there aren’t other things you can do now to help them enter the property market. Some options include:

  • Let them move in with you to help with their savings goals
  • Chip in a sum to help cover the deposit
  • Agree to purchase a property jointly with your child (this might affect their eligibility for any first home buyer grants)

For many older Australians, the road to property ownership might not have been easy, but chances are it wasn’t littered with as many obstacles as younger Australians now face. If you’re thinking about helping your child by transferring a property, it can be a good idea to have a team of professionals (e.g. a financial adviser, tax expert or lawyer) walk you through the ins and outs.

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Privacy Policy

Privacy Policy

1. Introduction

1.1 Count Limited and its related bodies corporate (collectively ‘Count’, ‘we’, ‘us’, ‘our’) respect your privacy and are committed to protecting your privacy. We understand the importance you attach to information that identifies you (your ‘personal information’) and we want to help you protect it.

1.2 We are bound by, and committed to supporting, applicable privacy legislation including the Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs). This Privacy Policy (‘Policy’) explains how we collect, hold, use, and disclose your personal information that we may obtain when you submit information to us in person, by mail or email, or by visiting our website.


2. How do we collect and hold personal information about you?

2.1 We collect personal information from you in a variety of methods. Examples of how we collect personal information include: 

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2.2 Because our products and services are often offered by intermediaries such as financial planners, solicitors, or accountants, we may collect personal information about you from these third parties.

2.3 You can deal with us anonymously or by pseudonym unless it is impractical for us to deal with you where you have not identified yourself or have used a pseudonym. We require certain personal information to provide you with services and information. If you do not provide us with certain personal information, we may not be able to provide you with access to those services or respond to your request for information.

2.4 We will only collect personal information from you where it is reasonably necessary for us to provide our services to you or to perform our functions or activities.

2.5 We will only collect sensitive information from you with your consent, except in permitted general situations which include:

  • The collection of the information is required or authorised by or under an Australian law or a court/tribunal order;
  • The collection is necessary to address a threat to an individual’s life, health, or safety; and
  • Permitted health situations.

2.6 We may hold your information electronically or physically and have in place appropriate data and physical security measures and protocols to protect that information from loss or from disclosure not contemplated by this Policy.


3. What type of personal information do we collect?

3.1 The type of personal information we may collect from you includes (but is not limited to):

  • Names, address, email, phone numbers, and job titles;
  • Information in identification documents such as your passport or driver’s licence;
  • Tax file numbers (TFNs) and other identification numbers such as Medicare number;
  • Date of birth and gender;
  • Financial information;
  • Details of superannuation and insurance arrangements;
  • Sensitive information (with your consent), such as health information or membership details of professional or trade associations or political parties;
  • Bank account details, shareholdings, and details of investments;
  • Educational qualifications, employment history, and salary;
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4. How do we use your personal information?

4.1 We will use the information you supply for the purpose of providing you with the service(s) agreed under our engagement and related services, such as accounting or business advisory services, or to meet obligations we may have at law, including in relation to health and safety.

4.2 We may also use the information we collect for our internal business and management processes (for example, accounting or auditing purposes), monitoring and improving our website, keeping you informed about our services and company news, and for any other purposes that would be reasonably expected by you and to allow us to comply with our obligations under the law.

4.3 We may also use personal information we have collected from you for the purpose of marketing our services. If you do not want to receive marketing material from us, you can unsubscribe by contacting us as detailed below:

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5. How do we disclose your personal information?

5.1 Your personal information will only be disclosed:

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  • In connection with an actual or proposed sale, reorganisation, or transfer of all or part of our business, including as set out in clause 16.1.

5.2 We may use, store, process, or back-up your personal information on servers that are located overseas (including through third-party service providers). The privacy laws in other countries might not be the same as in Australia. However, where we provide your personal information to third parties overseas, we will take such steps as are reasonable to ensure that your information is handled and stored in accordance with Australian privacy laws and this Policy. Currently, we use outsourced service providers in the Philippines, India, and Serbia.


6. Access to your personal information

6.1 You can request us to provide you with access to personal information we hold about you by sending us an email: privacy@count.au (no spam please) or writing to us at Level 1, 45 Clarence Street, Sydney NSW 2000.

6.2 We may allow an inspection of your personal information in person, or provide copies or a summary of relevant documents, depending on what is the most appropriate in the circumstances. Any charge we make for providing access will be reasonable and will not apply to lodging a request for access. Your request to access your personal information will be dealt with in a reasonable time.

6.3 Note that we need not provide access to personal information if a request is frivolous, or where to provide access would pose a threat to health or public safety, unreasonable interference with another person’s privacy, or be a breach of the law. If we refuse access, we will provide you with reasons for doing so.


7. Accuracy and correction

7.1 To enable us to keep our records properly, please notify us if you believe that any information we hold about you is inaccurate, incomplete, or out of date and we will take reasonable steps, in the circumstances, to ensure that it is corrected. You can notify us by sending us an email: privacy@count.au (no spam please) or writing to us at Level 1, 45 Clarence Street, Sydney NSW 2000.


8. Our security procedures

8.1 We take your privacy and the privacy of our associated entities and their clients very seriously. We will take reasonable steps in the circumstances to protect any personal information you provide to us from misuse, interference, or loss and unauthorised access, modification, and disclosure.

8.2 We will also deidentify and destroy the personal information we hold about you once our legal obligations cease. Our security procedures are reviewed from time to time and we update them when relevant.

8.3 Please be aware that the transmission of data over the internet is never guaranteed to be completely secure. It is possible that third parties not under our control may be able to access or intercept transmissions or private communications without our permission or knowledge. We take all reasonable steps, in the circumstances, to protect your personal information. However, we cannot ensure or warrant the security of any information you transmit to us. Such transmissions are done at your own risk.


9. Data breach notification

9.1 We are required to give notice to the Office of the Australian Information Commissioner (OAIC) and affected individuals of an “eligible data breach”. This means that if we hold personal information about you, and there is unauthorised access to or disclosure of your personal information, and if you, as the “affected individual” would be likely to suffer serious harm from this access or disclosure, we must notify both you and the OAIC.

9.2 “Serious harm” could include identity theft, threats to physical safety, economic and financial harm, harm to reputation, embarrassment, discrimination, or harassment. The test is whether a “reasonable person” would expect you to suffer serious harm.

9.3 If you are likely to suffer serious harm from a data breach, we will notify you of:

  • The nature of the eligible data breach (i.e., how the information was accessed or disclosed);
  • The type of information that was accessed or disclosed;
  • The steps that we have taken to control or reduce the harm, and those that we plan to take;
  • Any assistance we can offer you, such as arranging for credit monitoring;
  • Anything that we can suggest you can do to assist yourself or mitigate the harm;
  • Whether the breach has also been notified to the OAIC;
  • How you can contact us for information or to complain; and
  • How to make a complaint with the OAIC.

9.4 We will notify you using the same method that we usually use to communicate with you. If it is not practicable for us to notify you personally, we will publish the notification on our website.

9.5 There are some circumstances in which we do not have to notify you of a data breach. These include:

  • Where we have taken remedial action before any serious harm has been caused by the breach;
  • If you have been notified of the breach by another entity;
  • If notification would be inconsistent with Commonwealth secrecy laws; or
  • Where the OAIC declares that notification does not have to be given.

9.6 Depending on the nature of the breach and the harm, we may voluntarily inform other third parties such as the police or other regulators or professional bodies.


10. Identifiers

10.1 We will not adopt as our own any government identifiers you may provide to us such as TFNs and will not store these identifiers on any information.


11. Links to other sites

11.1 We may provide links to other sites for you to access. You should be aware that these other sites are not subject to this Policy or our privacy standards and procedures. You will need to contact them directly to ascertain their privacy standards.


12. Cookies

12.1 Our website may deposit “cookies” on a visitor’s computer. Cookies are pieces of information that a website transfers to an individual’s hard drive for record-keeping purposes. Cookies are only sent back to the website that deposited them when a visitor returns to that site.

12.2 Cookies make it easier for you by saving your preferences while you are at our site. We never save personal identifiable information in cookies. Most web browsers are initially set up to accept cookies. You can, however, reset your browser to refuse all cookies or to indicate when a cookie is being sent.


13. Changes to our Privacy Policy

13.1 From time to time, we may vary this Policy for any reason. We will publish any changes on this website.

13.2 By continuing to use our website and continuing to provide us with your information, you confirm your acceptance of these changes.


14. Complaints resolution

14.1 We are committed to providing a fair and responsible system for the handling of complaints from parties whose personal information we hold. If you have any concerns regarding the way we have handled your privacy, please send us an email at privacy@count.au or write to us at Level 1, 45 Clarence Street, Sydney NSW 2000. We will address any concerns you have through our complaints handling process and we will inform you of the outcome of your complaint within a reasonable timeframe.

14.2 If after receiving our response, you still consider that your privacy complaint has not been resolved, you may refer your concerns to the Office of the Australian Information Commissioner at www.oaic.gov.au.