Is it a gift or a loan when parents help kids buy a home? How to avoid family fights over money

Research published by The Conversation reveals a growing problem with how Australian families handle financial help for home purchases. In interviews with eighty older parents and adult children—most from Sydney—researchers found that when the so-called "Bank of Mum and Dad" steps in, huge legal and financial risks emerge. Participants had received or given an average of seventy-five thousand dollars, with some transfers reaching five hundred thousand. The core issue: almost nobody was clear whether the money was a gift or a loan, and almost no one documented it in writing. Under Australian law, funds from a parent to a child are presumed to be a gift unless proven otherwise—which puts the burden on parents if they expect repayment. The research found that mismatched expectations often led to conflict: one parent said the transfer was a gift, but his daughter assumed she'd repay it. To avoid costly legal battles and family rifts, The Conversation's researchers recommend having explicit conversations about repayment expectations and putting any agreement in writing before the money changes hands.

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