Quite a few Kiwis that are buying their first home (or another home) are helped by parents that want to “gift” them or “loan” them some money.
Gifting Should Be Recorded
A Deed of Gift is a great way to formalise an intention to gift money or assets to someone. A Deed of Gift is particularly effective for recording a gift from parents to children for the purpose of purchasing a home.
If parents are giving one of their children money without expecting or requiring anything in return, then you will probably be making a gift.
In that case, a Deed of Gift is right for you.
Acknowledging A Debt
A Deed of Debt (also known as a “Deed of Acknowledgement of Debt”) is a great way to formalise a loan of money or assets to another person.
A Deed of Debt is particularly useful for recording a loan between parents and children for the purpose of purchasing a home. If parents are making a loan to their children by giving them money that they must pay back, then this is probably making a loan and a Deed of Debt is right for you.
In most cases a Deed of Debt is treated very much like a gift and the agreement
Is A Deed Of Debt Better Than A Gift?
A Deed of Debt (also known as a “Deed of Acknowledgement of Debt”) has some key advantages over gifting money, and would often be recommended by solicitors and mortgage advisers as a more prudent way to record any gift or loan.
In particular the advantages are:
The “debt” can be interest free and with no requirement for any repayments, so for the children and the bank it is treated in a very similar way to a gift.
If parents are wanting to help a child they may want to “gift” their child money, but have concerns that if their child and partner separated the partner will want to split the assets 50/50. The money that was gifted is effectively then the child’s money and that too would normally be part of any 50/50 split. If instead of being a gift it was a “debt” then that would need to be repaid to the parents on the sale of the property and that way it does not become part of the assets that get split.
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If the property is sold for whatever reason the debt becomes due to be repaid.
Get Discounted Agreements Online Now
We have negotiated with a company called Agreeable to offer you their certified agreements.
These are agreements that you can buy online for a fraction of the normal price, fill out the short questionnaire, then the Agreeable team can help you edit the Deed to fully reflect your intentions.
You can also get a fixed fee quote if your situation is a little more complex and you require personal and professional legal advice.
![](https://mortgagemanagers.co.nz/wp-content/uploads/2023/11/Deed-of-Gift.png)
![](https://mortgagemanagers.co.nz/wp-content/uploads/2023/11/Deed-of-Debt.png)
IMPORTANT: Mention the code MORTGAGE15 for 15% off the agreement