After more than two decades selling homes in the Perth Hills, I have watched the “Bank of
Mum and Dad” go from the occasional helping hand to one of the biggest forces in the
market. More and more parents are using the equity in their home, or their savings, to get a
son or daughter onto the property ladder. It makes sense. Property has been good to a lot of hills families, and helping your kids is one of the most natural things in the world.

But I have also seen how badly it can go when it is done on a handshake. So this is a plain-
English look at what tends to go wrong, and the one simple step that protects everyone  before a cent changes hands.

First, the important bit. I am a real estate agent, not a lawyer or an accountant. Nothing here is legal, tax or financial advice. It is general information from someone who has watched a lot of these arrangements up close. When it comes to your own family, get proper advice. I will say that more than once, because it matters.

Why “we’ll sort it out later” is where the trouble starts

The common thread in almost every one of these situations is the same. The money moved, and the paperwork did not. Everyone was close, everyone trusted each other, and nobody wanted to make it awkward by writing things down. Then something changed, a relationship, a marriage, a death, an illness, and suddenly two people remember the same conversation completely differently.
Australian courts have dealt with plenty of these cases, and a few patterns come up again
and again. A loan that was never really treated as a loan. If parents lend money but never ask for a repayment or set any terms, a court can later decide it was in fact a gift. What you call it matters far less than how you behave over the years that follow. In fact, Australian law generally starts from the opposite of what most people expect: money from a parent to a child is presumed to be a gift unless there is clear evidence, set up at the time, that it was a loan. That is a big reason lawyers are so firm about documenting these arrangements
properly, and then actually sticking to the terms.

One person thought it was a loan, the other thought it bought them a share of the house.
Without something in writing, that disagreement can end up being settled in court, years
later, from memory.
Money put toward a “granny flat” or the right to live somewhere for life, with nothing to
formalise it. In one Queensland Supreme Court case, Cook v Alderson (2025), an older
woman sold her own home and put her savings into her daughter and son-in-law’s property on the understanding that she could live there for the rest of her life. That arrangement was never documented as a legal interest in the property. When the relationship broke down, she had to go to court, and the court awarded her more than $400,000 to compensate for the loss of that right. She got there in the end, but only after years of stress and legal cost that a clear agreement up front would very likely have avoided.

Sweat equity that counts for nothing. If a family member puts in months of labour instead of cash, expecting to be repaid, they are often shocked to learn that unpaid work, without an agreement, can carry little or no legal weight when a property is eventually split.
None of these people set out to end up in court. They just trusted that it would never come
to that.

The one step that protects everyone

Here is the part I can say plainly, because it is common sense rather than legal advice. Put it in writing, before the money moves, with proper help.
A lawyer can document whether the money is a gift or a loan, what happens if the property
is sold, what happens if a relationship ends, and what rights each person actually has. An
accountant can walk you through the tax side. Lawyers who work in this area often point out that the cost of drafting a clear agreement is a tiny fraction of what a dispute costs later. From what I have seen, they are right.

And write it down at the time, not afterwards. Agreements made when everyone is happy
and on the same page carry far more weight than ones reconstructed later, once memories
have drifted apart.

One option worth raising with your lawyer

If you are going to own the property together, how you own it matters, and it is worth asking about early. In Australia, co-owners generally hold property in one of two ways. As joint tenants, everyone owns the whole thing equally, and if one owner dies their share passes automatically to the others. As tenants in common, each person owns a defined share, and it does not have to be equal. Parents and a child could hold a third each, for example, or any split that reflects what each of them put in, and each person’s share forms part of their own estate rather than passing automatically to the others. Neither is right or wrong. Which one suits your family is a legal question, so raise it with your lawyer or settlement agent before you buy, not after.

Where a real estate agent actually fits in

I cannot draft your agreement, and I would not try. But there is one thing that sits at the
front of every one of these decisions, and it is the thing I can help with. Knowing what the property is really worth.

Almost every Bank of Mum and Dad decision starts with a number. How much equity is
genuinely in the family home. What a property might sell for if the plans change. What a fair share looks like when more than one person is contributing. Guess that number, or get it wrong, and every decision built on top of it is shaky.

So if you are a hills family weighing up helping the kids, or thinking about selling to free up
equity, the sensible first move is an honest, current valuation of your home. Not an online
estimate, a real appraisal from someone who knows these streets. That gives you and your
advisers solid ground to build on.

We have been doing exactly that across the Perth Hills since 2002, from our office on
Brookton Highway. No pressure, no obligation. Just a straight answer on what your home is worth, so you can make good decisions with the people who matter most.

Before you help the kids buy: a starting checklist

• Have we had a current, honest appraisal of our home, so every decision starts from a
  real number?
• Have we spoken to our accountant about the tax side?
• Have we spoken to a lawyer about how to set this up?
• Have we agreed, and can we show, whether this is a gift or a loan?
• Does everyone involved understand the arrangement the same way?
• Has it been documented properly, at the time, not later?
• Have we talked through what happens if someone dies, a relationship ends, or someonewants to sell?

This checklist is a starting point for conversations with your lawyer and accountant, not asubstitute for their advice.
Book a free, no-obligation appraisal

Important disclaimer

This article is general information only and does not take your personal circumstances into
account. It is not legal, financial or tax advice. Naked Real Estate is a licensed real estate
agency, not a law firm or a financial adviser. Before lending, gifting or co-owning property with family, please seek advice from a qualified lawyer and accountant.

Source note
The case referred to, Cook v Alderson, was decided in the Supreme Court of Queensland in
2025 and has been reported by multiple Australian news outlets. The full judgment is
available on the public court record.