If you’re wondering ‘can a minor own property in Australia’, the short answer is Yes. However, there are three big things to consider before making a decision, including estate issues, tax consequences and the kids of course.
Rule number one is to get some objective legal advice from a property lawyer. There are plenty of people who will want to sell you a scheme, although a lawyer will help you to make the right decision for you and your child’s future. Read on to learn more or contact our experienced team of conveyancers today.
Can a minor own property in Australia?
1. Estate issues
Who wouldn’t want to give a child or grandchild a good start in life? To be clear, it is legal to buy a property in the name of a minor (someone under the age of 18). The Title Deed will simply note that the owner is a minor. It is a simple matter to change the deed when the youngster is of age. If it’s a gift made during the lifetime of the giver, then the questions that may arise are not estate law questions.
The Department of Human Services describes giving away assets or transferring them for less than their market value as “gifting”. This can include selling or transferring property for less than market value. Because of this, gifting real property may affect an Age Pension or other benefits. That’s why it’s important to be sure of your decision before adding your child to the property title.
2. Circumstances around kids and grandkids
Until the child or grandchild reaches the age of 18, a property that has been gifted to them cannot be sold, mortgaged or dealt with in any way without a court’s approval. These proceedings are expensive and unlikely to succeed. Many conditions may change, including the market conditions, the financial circumstances of parents or grandparents, the number of grandchildren in the family, or the decision of gifting the child the proposed property.
Gifting real property to a young child often deprives the giver of flexibility in choices, that’s why it’s important to be sure of your decision.
3. Tax issues
Types of tax, specifically stamp duty, capital gains tax and Goods and Services Tax (GST), can also be an issue. Tax issues, along with estate considerations and the perils inherent when minors meet assets, must be part of the calculation.
For example, if the child takes ownership and full control of the property at the age of 21, 20 years after it was placed in trust for her benefit, the stamp duty will be calculated on the value of the property when they are 21. The capital gains tax will be calculated as of the same date as well. Either of these obligations could make a well-intended gift far less valuable.
So, would it be better to transfer the property to a trust, over which you are the trustee, thus maintaining control? What about appointing a corporate trustee at the child’s majority? Or would it be better to delay the child’s ability to control the real property until age 21?
There are a variety of possible solutions. Which is appropriate will depend on the relative weight of all of the personal factors. Keep in mind that no one solution is right for every situation.
Speak to the experienced property lawyers at Owen Hodge
If you have questions about transferring property to a young child or buying a property for a minor, contact us online or call 1800 770 780 to schedule a consultation today. The experienced property lawyers at Owen Hodge Lawyers look forward to helping you arrive at the best possible solution.
Can a minor own property: FAQs
According to Australian Law, anyone under 18 years of age can own and purchase a property with their name in the house title.
Yes, it is legal to purchase a house for a child, even if they are under the age of 18. The title deed will need to state that the owner is a minor.
To include your child’s name on the title to your house, they will need to have an interest or share in the property. This means that you will need to complete and lodge a series of forms with your local Land & Property Information Office. Please contact your property solicitor or conveyancer for further information about this process.
For more information: Transfer of property title in NSW