Gifted Deposit Conveyancing

If your deposit is coming from Mum, Dad, a grandparent, or another relative, you’re not alone. In Melbourne, gifted deposits are part of everyday property life, especially for first home buyers trying to buy near work, family, schools, or a tram line. A family contribution can be the difference between watching auctions in Brunswick for months and finally having a real shot on the day.

There’s a catch, though. A gifted deposit adds another moving piece to a purchase that already moves fast. The money might be coming from a redraw, a term deposit, a sale of shares, or an overseas transfer. Someone else may need time to organise it. And your lender will want the story, the paperwork, and the bank evidence to line up.

Most problems we see aren’t caused by family generosity. They come from mixed messages. The family thinks it’s a ‘gift’, the buyer quietly thinks it’s a loan they’ll repay later, and the bank is told it’s unconditional. Once those versions drift apart, finance approval can slow down, deposit deadlines become stressful, and settlement starts to feel uncomfortably close.

This is general information for Victorian buyers and families. It’s not personal legal advice. If you’re relying on gifted funds, it’s worth treating the gift as a formal part of your purchase plan from the start, not a side arrangement you sort out after signing.

Decide what the money is before you fall in love with a property

Before you get carried away with a bright kitchen in Coburg or a neat townhouse in Bentleigh, get clear on one question: what is this money meant to be?

Most family contributions fall into one of these categories:

A true gift
No repayment is expected. The donor does not want to be on title and does not expect any share if the property is sold.

A family loan
Repayment is expected, whether that’s monthly repayments, a lump sum later, or repayment when the property is sold.

A contribution that comes with ownership expectations
The donor expects to be on title, to have a defined share, or to recover their contribution (or a portion of growth) if the property is sold.

Those labels matter because they affect your lending position and your risk. If your broker and lender are told the funds are a gift, but the family expects repayment, you can end up in a messy spot. Even if nobody means any harm, it can create disputes after settlement, especially if circumstances change.

If the conversation feels awkward, keep it practical. Try questions like:

• ‘Do you expect this money back at some point?’

• ‘Do you want any ownership share recorded on title?’

• ‘If we sell in a few years, do you expect your contribution back first?’

• ‘Is this gift meant for both buyers, or only one of us?’

It’s much easier to sort this out over a calm chat at the kitchen table than to untangle it when the agent is chasing a deposit receipt and the bank is asking for updated documents.

The paper trail lenders usually want (and why it matters)

A gifted deposit can be perfectly acceptable to many lenders, but it needs to be supported by a clear trail. Each lender’s requirements differ, and they can change over time, so your broker is usually the best source for the exact form or wording your lender wants.

In practice, buyers are often asked for some combination of:

• A signed gift letter or the lender’s own gift declaration form

• Donor identification details (sometimes including proof of address)

• Bank statements showing the funds leaving the donor’s account

• Evidence the funds arrived in the buyer’s account (or the agreed channel)

• An explanation of where the donor’s funds came from if it isn’t obvious (for example, a recent large deposit)

• Statutory declarations in some situations

The theme is consistency. Names, amounts, dates, and the purpose of the transfer should match across documents. A small mismatch can create delays that feel ridiculous in the moment, like ‘Dad’ on one form and ‘Robert James Smith’ on the bank account, or a middle name appearing in one place and not another.

A common mistake is downloading a generic gift letter template online, then discovering your lender won’t accept it. If your lender has a preferred form, use it. If they don’t, get your broker to confirm what must be included so you don’t end up rewriting documents when you should be preparing for settlement.

Deposit language in Victorian contracts can trip people up

Buyers often use the word ‘deposit’ to mean ‘the money I need overall’. Your contract uses it in a more specific way.

In many Victorian purchases, the deposit under the contract is the amount payable after signing (or straight after auction), usually paid to the agent’s trust account or to the vendor’s representative. The balance of the price is paid at settlement through the settlement process.

If you’re feeling unsure about the terminology, it can help to read a plain English explanation like What Is The Difference Between Vendor Deposit And Bank Deposit so you can keep your broker, your conveyancer, and your family on the same page.

Why does this matter for gifted deposits? Because timing is often tight. The contract might require a deposit quickly, while the lender is still assessing the gifted funds evidence. Or the family might assume they can transfer money the day before it’s needed, only to hit bank limits or processing delays.

Sorting deposit timing early is one of the simplest ways to reduce stress.

Auctions move fast, and they don’t wait for paperwork

Melbourne auctions create a particular kind of pressure. You inspect on Saturday, come back for a second look mid week, then the agent calls with a stack of interest. Suddenly you’re considering bidding in seven days.

If you buy at auction, you should assume you’ll be locked in once you sign. Cooling off rights are limited in Victoria and are commonly not available around auctions. That’s why gifted deposits need to be lender ready before auction day, not ‘nearly ready’.

A familiar scenario looks like this:

You’re bidding on a period home in the inner north. Your parents are gifting part of the deposit. They have the money, but it’s sitting in a term deposit that needs a few days to break. Meanwhile, the bank asks for a gift declaration and updated statements, and the donor’s account name doesn’t match the name on their ID because one uses initials. Nothing is impossible to fix, but the clock is loud.

If you’re going anywhere near an auction, get your broker and conveyancer involved early. Share the gift amount, who the donor is, where the funds are sitting, and how quickly they can move.

Private sale gives more breathing room, but it’s not a free pass

Private sale can feel calmer. You can negotiate the price, request changes to terms, and organise your checks with a bit more space. Even so, gifted deposit paperwork can still cause trouble when it’s left too late.

If your finance approval depends on gifted funds evidence, delays can eat into your timeline quickly. And if the contract requires a deposit by a certain date, the agent will still chase proof of payment, even if you’re still waiting on donor statements.

The goal is simple: make sure the gifted funds plan matches the contract’s deposit clause and your lender’s evidence requirements. When those three pieces line up, the process tends to run smoothly.

A simple timeline that works for gifted deposits

Before you make offers or bid

Tell your broker and conveyancer that gifted funds are involved. Don’t wait until you’ve found ‘the one’. Provide:

• the approximate amount

• who the donor is

• whether the money is already available

• any timing constraints (term deposit, overseas transfer, sale of assets)

If your donor needs to move money across accounts, confirm how long it really takes. Weekends, public holidays, and transfer limits can all slow things down.

During contract review

This is where conveyancing earns its keep. Your conveyancer will review the Section 32 and contract conditions, but they’ll also look at practical risk points like deposit timing, settlement date, and special conditions.

If your gifted funds are still being organised, your conveyancer can often flag where the contract creates unnecessary pressure, and where the terms may be negotiated (especially in private sale). Even small shifts in timing can make a big difference to stress levels.

After signing

Move quickly on lender requests and keep one set of facts across everyone involved. When the story changes between the broker, the lender, and the conveyancer, you end up with duplicate questions and last minute document requests.

It helps to store all gift related documents in one folder and keep a simple note of the amount, transfer date, and which account it came from.

Leading up to settlement

Your conveyancer will coordinate figures, adjustments, and settlement preparation. Gifted funds should be in place with buffer time, not sitting on a plan to transfer at the last possible moment. Banks can ask follow up questions late in the process, and you don’t want a transfer delay to be the reason you’re scrambling days before settlement.

Section 32 and special conditions still matter, even when the money is sorted

A gifted deposit doesn’t replace the usual Victorian checks. You still need the contract and Section 32 reviewed properly before you commit.

A careful review commonly looks at:

• title details and any easements or restrictions

• zoning and planning disclosures

• rates and outgoings

• owners corporation information (for units, apartments, and many townhouses)

• special conditions that shift risk onto the buyer

• settlement timing and deposit arrangements

Family help can sometimes tempt buyers to move faster, because they feel grateful and excited. That’s when mistakes happen. The safest approach is to get the legal review done early so you’re not relying on a rushed decision during a busy week of inspections.

Common Melbourne buying scenarios where gifted deposits need extra care

Buying a townhouse or unit with an owners corporation

Townhouses and units can come with owners corporation fees, maintenance obligations, and rules that affect how you use the property. The contract may also include special conditions that you wouldn’t see in a standalone house purchase.

If you’re leaning towards a townhouse, Buying A Townhouse In Melbourne The Conveyancing Differences You Need To Know is a helpful read alongside your contract review.

Off the plan purchases

Off the plan purchases often involve longer timeframes. That can create a false sense of security. A long timeline doesn’t remove the need for good record keeping, especially if your lender asks for a clear trail later.

Families sometimes say, ‘We’ll gift it when settlement gets closer’. That can work, but it needs planning. If the donor’s circumstances change, or the lender’s requirements shift, you don’t want to discover late that your evidence is missing or your transfer plan won’t meet a deposit deadline.

First home buyers trying to juggle grants, lenders, and family timing

If you’re a first home buyer, gifted funds often sit alongside other moving parts: grants, concessions, savings history, and loan approval steps. It’s a lot to manage, especially when you’re also attending inspections every weekend.

If that sounds familiar, First Home Buyers Guide 2025 First Home Buyer Scheme Financing And Conveyancing Tips For Buying Your First Home In Melbourne can help you organise the bigger picture, so the gifted deposit is one piece of a clear plan rather than a last minute scramble.

Buying with a partner when one family provides most of the deposit

This is one of the most sensitive parts of gifted deposit conveyancing, and it deserves careful handling.

Picture a couple buying near a tram line in Preston. One partner’s family contributes a large sum. Everyone agrees it’s ‘for the deposit’. Settlement goes through, life moves on, and then a year later a relationship wobble or a job move raises big questions. Was the gift meant for both buyers? Should one buyer receive more if the property is sold? Was repayment expected?

There’s no single right answer. The key is to decide before you sign and document it in a way that matches your legal structure.

Your conveyancer can explain common ownership options, including joint ownership versus holding different shares. If there are bigger family asset concerns, independent legal advice can also be wise, particularly where one side is contributing a large portion of the purchase funds.

The aim isn’t to make things cold or transactional. It’s to protect everyone’s relationships by setting expectations when things are calm.

When the gift comes from overseas

Overseas gifted deposits are workable, but they often attract more questions and take more time.

Expect extra scrutiny around:

• account ownership and name matching

• the transfer path from donor to buyer

• timing, including bank processing and time zone delays

• currency conversion and the final amount received

If overseas funds are involved, start early. Earlier than you think. Keep transfer receipts and account records in one place, and confirm with your broker what evidence the lender will want so you aren’t chasing documents across multiple banks at the last minute.

Also plan around weekends and public holidays. A transfer that looks simple on a Tuesday can feel very different when you’re trying to line it up with a settlement schedule.

Donor side realities families sometimes miss

Most donors are focused on helping, not on the paperwork or the flow on effects. That generosity is a strength, and it’s also why we encourage donors to protect themselves with clear records.

Two donor side issues come up regularly:

Make the documents match the real intention
If repayment is expected, call it a loan and get advice on how to record it properly. If it’s a gift, keep it clean and consistent.

Consider the donor’s wider financial position
Large gifts can affect a donor’s planning, especially if they receive certain government payments or may apply in the future. The rules are personal and can be complex, so financial advice may be sensible for donors before they transfer a substantial amount.

People also ask about ‘gift tax’. Australia doesn’t generally tax cash gifts in the way some countries do, but that doesn’t mean there are never wider consequences depending on the donor’s situation or how the funds are raised. Keep your advice team broad when needed: conveyancer for the property side, broker for the lender side, and financial or tax adviser for donor planning.

‘Should we do this through super instead?’ A quick reality check

Sometimes families compare a cash gift to other options, like buying through an SMSF. That is a completely different pathway with its own rules, paperwork, and compliance obligations. It can suit some people, and it can be the wrong fit for others.

If you’re weighing those options, read Buying Property With Your Smsf In Victoria The Complete Conveyancing And Compliance Guide and get proper advice before you commit to a structure. It’s not something you want to decide in a rush after an inspection.

A practical playbook you can use right now

If you’re buying in Victoria with gifted funds, this sequence keeps things calm:

• Confirm whether the money is a gift, a loan, or a contribution linked to ownership

• Tell your broker and conveyancer early, before you’re making offers or bidding

• Use the lender’s preferred gift form, and keep names and amounts consistent across documents

• Match the contract deposit timing to real transfer timing (with buffer time)

• Keep your gift documents and bank records in one place so requests are easy to answer

• Avoid last minute transfers close to deposit due dates or settlement

It’s simple stuff, but it prevents most of the panic we see in the final stretch.

The calm version of a gifted deposit purchase

Gifted deposits are normal in Melbourne’s market. There’s nothing unusual about families stepping in to help buyers bridge the gap. The deals that run smoothly tend to share one feature: the family story, the lender story, and the legal story all match.

If you’re using gifted funds, bring it into the open early, document it properly, and let your conveyancer review the Section 32 and contract terms before you commit. It’s the best way to reduce risk and move towards settlement with confidence.

If you’d like tailored guidance for your purchase, contact Pearson Chambers Conveyancing for a complimentary Section 32 contract review.

Email contact@pearsonchambers.com.au and we’ll help you map the next steps.