Most parents who call me have already decided they want to help. What they have not decided is how, and that second question is where the money is won or lost. The five ways parents can help their kids buy or invest all work. They also carry very different risks, costs and exit points.
The gap between a deposit and a Brisbane or Sunshine Coast price has not closed, and it is not going to close quietly. Meanwhile the parents I speak with are often standing at the other end of the same problem. They are ready to retire, most of their wealth is sitting in a house they no longer need in full, and an adult child is still in the spare room.
Each option below changes something different. One changes the security a lender holds. One changes who owns what. One changes nothing except the size of the deposit. Working out which one fits usually starts with the parents’ position rather than the child’s, and a family guarantee home loan is normally structured only after both balance sheets are on the table.
The generosity is rarely the hard part. The structure is, and the structure decides whether this help costs a parent nothing or costs them a great deal more than they planned.
A family guarantee, sometimes called a security guarantee, lets parents use the equity in their own home as additional security for a child’s loan. No money changes hands, which is why families reach for it first:
The lender takes a limited second mortgage over the parents’ property alongside the mortgage over the child’s new home. That extra security lifts the total security value, which brings the loan-to-value ratio (LVR) down.
Bring the LVR under the relevant threshold and lenders mortgage insurance (LMI) may not be required, depending on the lender’s criteria. For a child with income but no deposit, that combination is often the difference between buying and waiting another three years.
A well-structured guarantee is capped at a specific dollar figure rather than covering the whole loan. The cap is usually set at the amount needed to bring the LVR to the lender’s threshold, which commonly works out to around 20% of the purchase price plus costs, though acceptable levels vary between lenders.
That distinction matters more than almost anything else. Parents are exposed to the capped figure, not to their child’s entire debt. A guarantee written without a clear cap is a different and much larger proposition.
The guarantee is a real liability. Should the child default, the lender can call on the portion covered by the guarantee, and the parents’ home is the security standing behind it. A guarantee can also limit the parents’ ability to borrow again, or to sell, while it remains in place.
Most guarantees can be released once the child’s LVR improves enough through repayments or growth. Planning that release at the start, rather than discovering the conditions years later, is what separates a good arrangement from an awkward one.
Parents should take independent legal advice before signing. The Australian Securities and Investments Commission sets out the risks of going guarantor on its Moneysmart site.
A gift is the simplest option and the one with the fewest moving parts. Simple is not the same as consequence-free, and lenders scrutinise gifts far more closely than most families expect:
Lenders generally want a signed gift letter confirming the money is a gift and is not repayable. The reason is straightforward. A repayable gift is a debt, and a debt changes the child’s serviceability.
Some lenders also want to see the funds held in the child’s account for a period, and some still want genuine savings on top of the gift. Requirements differ enough between lenders that the gift is better timed around the application rather than the other way around.
Gifting can affect Age Pension entitlements. Centrelink applies gifting rules that limit how much can be given away before the amount continues to be counted as an asset of the person who gave it, for a period after the gift.
Parents at or approaching pension age should check their position with Services Australia or a financial adviser before transferring anything. The timing of a gift can matter as much as the amount, and this is not a lending question.
A gift into a couple’s purchase becomes part of the pool in a relationship breakdown. That is not a comment on anyone’s relationship. It is simply how the money is treated.
Families uncomfortable with that outcome sometimes prefer a documented loan, or ask about an agreement between the couple. Both are conversations for a solicitor, and both are much easier to have before the money moves than afterwards.
A family loan sits between a gift and a guarantee. The parents keep a claim on the money, the child gets the deposit, and the lender needs to know about it:
A family loan should be documented like any other loan, covering the amount, any interest, the repayment terms, and what happens on death or default. The document is what makes it a loan rather than a gift, and it is what protects the parents’ claim where circumstances change.
A documented loan is a liability, so it reduces the child’s borrowing capacity, and some lenders will not proceed at all where the deposit itself is borrowed. A gift letter avoids that problem but gives up the claim.
Families routinely want the protection of a loan and the serviceability of a gift. They cannot have both from the same lender at the same time. Which way to go depends on the child’s income, the size of the shortfall and the individual lender’s policy, so it is worth testing across lenders before anyone signs anything.
The terms should say how this ends. Some family loans are interest-free and repayable on sale. Some convert to a gift after a set period. Some are repaid out of an inheritance and simply adjust the estate between siblings.
Writing that down early prevents the conversation that otherwise happens years later, usually at the worst possible moment, between people who remember the arrangement differently.
Co-ownership changes the question. It stops being how to help a child buy and becomes who owns what. It suits families where the parents hold significant equity and the child has income but no deposit, and it is the structure behind the most instructive case I have worked on:
Some lenders offer a formal co-ownership product. Commonwealth Bank’s Property Share is one, and it lets two or more people own a property together while holding separate home loans and managing their own repayments.
The conditions are specific. Every borrower must be an owner of the property, each guarantees the other’s loan as security, and a maximum of two home loan applications is allowed per security. It cannot be used for business purposes, bridging, land purchase or construction. All parties must obtain legal advice and sign a statutory declaration before entering the arrangement.
A client’s son was still living at home. The family home in Brisbane was worth around $1.7 million and his parents owned it outright. He had income and no realistic path to a deposit for a separate purchase at anything like that price.
Rather than help him buy elsewhere, we structured his purchase of a 30% share of the family home, funding around $500,000 through a property share arrangement. He went onto the title as a part owner. His parents retained the balance.
The son became a property owner, holding a share of an asset that had already performed rather than an entry-level purchase somewhere he did not want to live. The parents released capital from a home they were living in but no longer needed in full.
Over time his parents bought another place, and eventually the rest of the house was transferred to him. That gave them the clean retirement exit they had not been able to engineer while he was living at home and they held all the equity. The problem they came to me with was not really a deposit problem. It was a retirement problem wearing a deposit costume.
It worked because the son could service his own loan, and because the family was comfortable with joint ownership of a home they all had history in. Neither of those is a given, and where either is missing this is the wrong structure.
Transfer duty is generally payable in Queensland on the value of the interest acquired, and the Queensland Revenue Office is the place to confirm what applies to a particular transfer.
Going onto a title carries consequences beyond duty. An adult child who becomes a property owner may no longer qualify as a first home buyer for grants or duty concessions on a later purchase, and the first home buyer grants they give up can be worth more than the help on offer. That is an expensive thing to discover afterwards.
Co-ownership needs an agreed ending before it has a beginning. Who can force a sale, how the property gets valued, what happens where one party wants out or dies, and how rates, insurance and maintenance are split all belong in a written co-ownership agreement drafted by a solicitor.
The case above ended well in large part because the family discussed the exit at the start, when everybody was still getting along.
This one is new, and it is why the conversation with parents has changed since May 2026. The tax treatment of an investment property now depends on whether it is new:
The 2026 Budget measures, now law, limit negative gearing on residential property to new builds from 1 July 2027 and replace the 50% capital gains tax (CGT) discount for individuals and trusts with an inflation-based method. Investors in new builds keep negative gearing against all income and keep the choice of the 50% discount.
Helping an adult child into an investment property in their own name now means helping them into a materially better tax position by helping them build rather than buy established. The detailed definition of a new build turns on whether the dwelling genuinely adds to housing supply, and it is still being finalised, so the specific project matters.
Building splits the purchase into land and construction, which changes the deposit conversation entirely. Parents helping here are often helping with the land component, or with the equity that supports the whole facility.
Releasing equity from their own home is the common way to fund it, though releasing home equity carries risks of its own. What parents can give up without compromising their own retirement is a modelling question, and it is the step families most often skip.
A build is slower than a purchase and the money moves in stages. Progress payments follow builder milestones rather than a single settlement, and the child carries interest during construction while frequently still paying rent somewhere else.
Parents underwriting a build should understand the support may be needed for longer than a settlement date, and that timelines move. That is manageable when it is expected and stressful when it is not.
Five options, and no default answer. The right structure usually falls out of a handful of honest questions rather than a preference:
General guide only. Lender criteria, transfer duty, grant eligibility and tax treatment vary by state, by lender and by your circumstances, and some 2026 rules were still being finalised at the time of writing. Confirm your own position with a qualified professional before acting.
The hardest part of this is not the money. It is the conversation, and most families have it in the wrong order. They decide to help, then work out how, then discover what it cost them.
Turn that around and the whole thing gets easier. Start with what the parents can genuinely afford to risk, what they need back, and when they want out. The structure that fits those answers is usually obvious once they are on the table, and the family that has said all of it out loud tends to end up with an arrangement everybody can still live with in 10 years.
The son in that Brisbane case did not get a favour. He got a structure, and so did his parents. That is the difference worth aiming for.
At Ausfirst Lending Group, we are happy to sit down with both generations at once, because that is usually the only way this gets solved properly. Bring your questions, and we will work through which of the five paths suits your family.
Yes. A family guarantee uses equity in the parents’ property as additional security, so no cash changes hands and the parents keep their savings. The trade-off is that the guarantee is a real liability. The parents’ home stands behind the portion covered by the guarantee, so this is help with a risk attached rather than help without a cost.
It puts a portion of it at risk. Where the loan is properly structured, the guarantee is capped at a set dollar amount rather than the whole debt, so the exposure is limited to that figure. Should the child default, the lender can call on the portion covered by the guarantee. That is why independent legal advice before signing is not a formality.
It can help and it can complicate. Lenders generally want a signed gift letter confirming the money is not repayable, and some want the funds seasoned in the account or genuine savings on top. A gift that turns out to be repayable is a debt, and it will be assessed as one. The paperwork is what determines how a lender reads it.
Yes, and some lenders offer a formal product for it. Co-ownership arrangements allow each party to hold their own loan over a shared property, with each owner guaranteeing the other’s loan as security. The structure suits families with substantial equity and a child who can service a loan. It needs a solicitor, a written co-ownership agreement and an agreed exit before anyone signs.
It might. Centrelink gifting rules limit how much can be given away before the amount keeps counting as your asset for a period, which can affect entitlements. Check with Services Australia or a financial adviser before transferring anything, because timing can matter as much as the amount.
Possibly. Becoming a property owner can affect eligibility for first home owner grants and transfer duty concessions on a later purchase, and the rules differ by state. This is worth checking before the share is acquired. We raise it early with families precisely because it is difficult to unwind later.
For an investment property in the child’s own name, the 2026 measures now favour building. New builds keep negative gearing against all income and keep the choice of the 50% CGT discount, while established property bought after Budget night does not. For a home to live in, the tax question falls away and the answer comes down to timeline, budget and what the family can carry during construction.
