Before the family money moves

A checklist for the conversation, not a form. Each item is a question one side or the other will be asked eventually, by a lender, a solicitor, Centrelink, an executor or a court; answering it now is cheaper than answering it then. The professional named against each item is the one who answers it properly.

Both sides, together

1. Which is it: a gift, a loan, a guarantee, or a share of the title? Decide the word before any paperwork uses it. Everything else on this list depends on the answer.
2. How much, and when? A gift that arrives months before the application is treated differently from one that arrives at exchange. The planner shows what a given amount does to the deposit and the loan.
3. What is the ending? A loan has a repayment date, a guarantee has a release point, a share has an exit. Write down which.
4. What if things change? The child separates, a parent dies, the child wants to sell, a parent needs the money back. Say now what happens then; the agreement records it.
5. Are the other children being treated in a way everyone can live with? A gift or loan to one child is a question for the parents' will as much as for the purchase.

The buyer

6. Does the lender know? A gift needs a gift letter; a loan is a liability on the application; a guarantee is part of the loan structure. Ask the broker or lender what the policy accepts before relying on it.
7. Does the help change the schemes? The 5% Deposit Scheme, Help to Buy, the grant and the duty concession each test the buyer; a parent on the title is tested too. The schemes guide and the state pages have each test.
8. Is the price right? The help lifts what the buyer can pay; it does not tell them what the property is worth against recorded sales. That is the question the report answers, and the family money is riding on it.

The parents

9. What does it do to the pension? Gifts above Centrelink's free areas are counted for five years; a loan stays an asset. An adviser or a Services Australia financial information officer can model it.
10. What does it do to tax? Interest received is income; a share of the title has land tax and capital gains consequences. An accountant.
11. What is actually at stake? A gift is gone; a loan is money expected back; a guarantee is a capped amount secured on the parents' home until released. The guarantor guide and the planner put a figure on it.
12. Has the guarantor seen their own solicitor? Lenders commonly require it, and that solicitor acts for the guarantor, not for the buyer.

Who to see

Question	Who answers it
The loan agreement, the guarantee document, the co-ownership agreement, the will	A solicitor, ideally one for each side where a guarantee or a share is involved
What the lender will accept, and how the help changes the loan	A mortgage broker or the lender
Interest, land tax, capital gains, the parents' tax position	An accountant
The pension, deeming, the parents' retirement income	A financial adviser or a Services Australia financial information officer
Where the price sits against the recorded sales for that property	The report

Before signing anything

• The word (gift, loan, guarantee, share) is the same on every document.
• The lender has the paperwork it asked for, in the form it asked for.
• Each side has read what it is agreeing to, and the guarantor has seen a solicitor of their own.
• Both sides have a copy of everything, and a record of every transfer and repayment from the first day.