Transferring a property between family members can seem straightforward, particularly when the parties know and trust each other.
However, transferring ownership of a property is a legal transaction and can involve contracts, government requirements, transfer duty, mortgage arrangements and other considerations.
Whether you are transferring a property to a spouse, child, parent, sibling or another family member, it is important to understand the process before making any arrangements.
This article explains what a property transfer between family members involves in Victoria and some of the key issues to consider.
What Is a Property Transfer Between Family Members?
A property transfer occurs when the ownership of a property is changed from one person or group of owners to another.
For example, a family member may wish to:
- Transfer a property from a parent to a child
- Add a spouse or partner to the title
- Remove a family member from the title
- Transfer a share of a property to another family member
- Transfer property following a family arrangement
- Change ownership between related parties
Although the parties may be related, the transfer still needs to be properly documented and registered.
Do I Need a Conveyancer to Transfer Property Between Family Members?
A family property transfer should not be treated as simply changing a name on the title.
There can be legal, financial and government requirements that need to be considered before the transfer takes place.
A conveyancer can assist with the conveyancing and registration aspects of the transaction, including preparing or arranging the necessary documents and coordinating settlement where required.
However, some circumstances may also require advice from other professionals, such as an accountant, financial adviser or lawyer.
What Are the Common Reasons for a Family Property Transfer?
Family property transfers can happen for many different reasons.
Adding a Family Member to the Title
A property owner may wish to add a spouse or another family member to the title.
For example, a property may currently be owned by one spouse, but the parties decide that both should become registered owners.
Removing a Family Member From the Title
A transfer may also be required when one owner is being removed from the property title.
This can occur following a change in family circumstances or as part of a financial arrangement.
Transferring Property to Children
Parents may sometimes transfer a property or an interest in a property to their adult children.
This may be done for various family or financial reasons, but the potential tax and duty consequences should be considered before proceeding.
Transferring Between Other Related Parties
Transfers can also occur between siblings, parents and children, spouses and other family members.
The appropriate process depends on the circumstances of the particular transaction.
Is a Family Property Transfer the Same as Selling a Property?
Not necessarily.
A transfer between family members may involve little or no money changing hands, depending on the circumstances.
However, the fact that no money is paid does not automatically mean that there are no government charges or other obligations.
Transfer duty and other costs may still apply depending on the nature of the transaction and whether an exemption or concession is available.
It is important to obtain appropriate advice before assuming that a family transfer will be treated as a simple or cost-free transaction.
Do I Have to Pay Transfer Duty on a Family Property Transfer?
Transfer duty may apply to a property transfer in Victoria.
Whether duty is payable, and the amount involved, depends on the circumstances of the transfer and whether any exemption, concession or other treatment applies.
For example, certain transfers may qualify for specific exemptions or concessions, but eligibility requirements must be satisfied.
The relationship between the parties alone does not necessarily mean the transfer is exempt from duty.
Before proceeding, it is important to understand the potential duty implications of the proposed transfer.
What If There Is a Mortgage on the Property?
If the property has an existing mortgage, the lender will usually need to be involved.
Changing the registered ownership of a mortgaged property can affect the lender’s security and loan arrangements.
The lender may need to:
- Approve the proposed transfer
- Require new loan documentation
- Reassess the borrowing arrangements
- Arrange for an existing borrower to be removed or added
- Provide consent or other documentation
You should speak with your lender early in the process if there is a mortgage over the property.
Do not assume that the property can simply be transferred while leaving the existing loan arrangements unchanged.
Can I Transfer Only Part of My Property to a Family Member?
Yes, in some circumstances a transfer can involve only an interest or share in a property.
For example, an owner may transfer part of their interest so that ownership changes from one person to joint ownership or changes the proportions held by existing owners.
However, the legal and financial consequences can be different depending on how the property is currently owned and how the new ownership will be structured.
Professional advice should be obtained before deciding how the property should be held.
What About Joint Tenants and Tenants in Common?
The way property is held can be important when transferring ownership.
Property may be held as:
- Joint tenants
- Tenants in common
These ownership structures have different legal consequences, particularly in relation to what happens to a person’s interest if they die.
If you are changing ownership between family members, it is important to understand how the new ownership will be recorded on title.
Does the Property Need to Be Valued?
Depending on the circumstances, a valuation or other evidence of market value may be relevant.
This can be particularly important where the property is being transferred for less than market value or where the transfer is between related parties.
The appropriate valuation requirements can depend on the purpose and circumstances of the transfer.
If you are unsure, obtain professional advice before agreeing on the transfer value.
What About Capital Gains Tax?
Capital Gains Tax (CGT) can be an important consideration when transferring property.
A transfer between family members may have tax consequences even if the property is transferred for little or no money.
The tax treatment can depend on factors such as:
- How the property has been used
- Whether it has been the owner’s principal place of residence
- Whether it has been used as an investment
- The ownership structure
- The circumstances of the transfer
Conveyancers generally do not provide personal tax advice. If CGT may apply, you should speak with an accountant or tax professional before proceeding.
What Documents Are Needed for a Family Property Transfer?
The documents required will depend on the circumstances.
They may include:
- Transfer documentation
- Identification documents
- Existing title information
- Mortgage or lender documentation
- Evidence supporting any applicable exemption or concession
- Other documents required for registration
Your conveyancer can advise you about the conveyancing documents required for your particular transaction.
What Is the Process for Transferring Property Between Family Members?
While every transaction is different, the process may generally involve:
1. Discuss the Proposed Transfer
The parties should first establish what ownership change they want to make and why.
2. Obtain Professional Advice
Consider whether you need advice about:
- Conveyancing
- Transfer duty
- Tax
- Finance
- Estate planning
3. Check the Title and Property Details
The existing title and property information should be reviewed before proceeding.
4. Contact the Lender
If there is a mortgage, the lender should be contacted early.
5. Prepare the Required Documents
The appropriate transfer and supporting documents need to be prepared.
6. Arrange Settlement
Where required, settlement can be coordinated between the parties and their representatives.
7. Register the Transfer
After settlement, the transfer is lodged for registration so the ownership change can be recorded on the title.
How Long Does a Family Property Transfer Take?
The timeframe can vary depending on the circumstances.
Factors that may affect the timeframe include:
- Whether there is a mortgage
- Whether lender approval is required
- Whether transfer duty needs to be assessed
- Whether an exemption or concession is being claimed
- Whether additional documents are required
- The complexity of the ownership structure
Starting the process early can help avoid unnecessary delays.
Common Mistakes to Avoid
Assuming There Is No Duty Because You Are Family
Being related does not automatically make a transfer exempt from transfer duty.
Transferring the Property Before Checking Tax Consequences
A transfer may have tax implications even where no money changes hands.
Forgetting About the Mortgage
The lender may need to approve the change in ownership.
Treating It as a Simple Name Change
A property transfer is a legal transaction and needs to be properly documented and registered.
Not Considering Future Ownership Consequences
Think carefully about how the property will be owned after the transfer and what that may mean for future dealings with the property.
Frequently Asked Questions
Can I transfer my house to my child?
A property may be transferred to a child in appropriate circumstances, but the transfer can have duty, tax, finance and ownership implications.
Can I transfer property to my spouse?
Yes, property can be transferred between spouses in certain circumstances. Whether duty or other costs apply depends on the particular circumstances.
Do I need to sell the property if I want to change the owner?
Not necessarily. A change in ownership can be completed by a property transfer rather than a conventional sale, depending on the circumstances.
Can I transfer property without receiving payment?
A transfer may occur without payment, but this does not automatically mean that government charges or tax consequences do not apply.
Can I add my child to my property title?
It may be possible, but you should consider the duty, tax, mortgage and future ownership implications before proceeding.
Can I remove someone from a property title?
A transfer can sometimes be used to remove an owner from the title. If there is a mortgage, the lender will generally need to be involved.
Do I need a conveyancer for a family transfer?
Using a conveyancer can help ensure the transfer is properly prepared, settled and registered. Depending on the circumstances, you may also need tax, financial or legal advice.
How Prox Conveyancing Can Help
At Prox Conveyancing, we assist clients with property transfers between family members across Victoria.
We can help with the conveyancing and registration aspects of the transaction and explain the steps involved.
Because every family transfer is different, we recommend discussing your circumstances with us before making arrangements to transfer ownership.
Where appropriate, we can also recommend that you obtain separate tax, financial or legal advice.
About the Author
Meet Sally
Sally Kwok is a Licensed Conveyancer and the Director of Prox Conveyancing. With more than 16 years of experience in the conveyancing industry, she is committed to helping buyers and sellers navigate Victorian property transactions with confidence. Sally is passionate about providing clear communication, practical guidance and personalised service throughout every stage of the conveyancing process.
👉 Learn more about Sally on our About page.
About Prox Conveyancing
Prox Conveyancing is a Victorian conveyancing practice providing professional conveyancing services for residential property transactions across Victoria. We assist buyers, sellers, investors and families with a wide range of conveyancing matters, delivering personalised service, transparent communication and professional support from contract through to settlement.
👉 Learn more about Prox Conveyancing on our About page.
This article provides general information only and is not legal advice. Every property transaction is unique, and the information above may not apply to your particular circumstances. If you require advice about your specific situation, please contact a qualified legal professional or licensed conveyancer.