How Parents Can Strategically Help Their Kids Buy a Home (Without Giving It All Away)

The Great Australian Dream is getting harder to reach for first-time buyers. But what if parents could help without overextending themselves, and make it a smart move for both sides?

At JORIS Advocacy, we believe intergenerational wealth transfer isn't just about giving money away. It's about being strategic. With the right approach, parental help can fast-track homeownership for kids and protect family wealth in the long term, and you don’t need to be a multi-millionaire to make it work.

Why This Matters Now

Australia is on the cusp of the greatest intergenerational wealth transfer in history: over $3.5 trillion expected to change hands by 2050 (Productivity Commission)⁽¹⁾. Many parents want to support their children with a home deposit, but worry about fairness, their own retirement, or potential relationship risks.

There is a smarter way.

With rising prices in Sydney and Melbourne, many families are turning to more accessible markets like Newcastle. With a sub-$1M median house price (Cotality)⁽²⁾ and strong capital growth, it offers a realistic launchpad for first-home buyers, especially when family help comes into play.

For more risk-averse families, one powerful option is a family guarantee loan, where parents can use the equity in their own home as security, instead of providing cash. Here’s the strategic part: once the child’s property grows in value (or the loan is paid down), the guarantee can often be released in 18 to 24 months. This allows parents to help without being tied in long-term or risking their full asset base.

5 Strategic Ways to Help (Without Regret)

1. Gifting a Deposit
Straightforward and common, but not always strategic. No legal claim if a relationship breaks down unless it's structured properly. Best for families who can afford to gift without impacting retirement plans.

2. Loaning the Deposit (With Documentation)
Funds are given as a private loan. Can be interest-free or structured with terms. A formal legal agreement protects the money and can ensure repayment if needed.

3. Family Guarantee Loan
Parents use equity in their own home to secure their child’s loan. No cash required, but there are risks if repayments default. The guarantee can usually be released once the child builds sufficient equity, often within 18 to 24 months in the right market conditions.

4. Co-Ownership / Joint Venture
Parents and children purchase together as co-investors. This can be structured with part ownership, rental income shares, or eventual buy-outs. Best paired with a buyer’s agent to uncover dual-income or growth opportunities.

5. Supercharged Entry with Government Schemes + Parental Support
Combine the First Home Guarantee (5% deposit, no LMI) with a small family gift or loan to unlock higher quality property. This can open doors to properties 5–15 minutes from the beach, with an extra bedroom or land for future renovation. Wealth is built through options, and this creates them.

Missed Opportunity: Where Buyer’s Agents Add Real Value

Many families go it alone, and end up buying emotionally or overpaying.

A buyer’s agent can:

• Unlock Off-Market Deals: Essential when competition is fierce.
• Strategically Select Suburbs: Buying in Newcastle instead of stretching in Sydney can mean a better asset, lower debt, and faster equity.
• Maximise Every Dollar: Ensure family contributions stretch further by targeting renovation potential, dual-income layouts, and long-term upside.
• Reduce Risk: We help structure agreements and ownership models to protect both sides.

According to REBAA, working with a buyer's agent can reduce search time by 80%, avoid costly mistakes, and help you buy up to 15% below market value when timed right⁽³⁾.

Example: How a Newcastle Buy Made It Work

Emma's parents had $300K in equity in their Sydney home. Instead of gifting cash, they backed her loan as a guarantor and worked with a buyer’s agent to purchase a $710K home in Mayfield.

After a $25K cosmetic renovation and smart tenant placement, the property is now worth over $800K and rents for $590/week.

Her parents released the guarantee in just 18 months, once Emma's property had appreciated enough in value to reduce her loan-to-value ratio below 80%, allowing the bank to remove the additional security. That’s the power of timing, structure, and strategic suburb selection.

Risks to Consider

• Relationship breakdowns: Protect contributions with legal documentation.
• Unclear expectations: Agree on terms upfront, ownership shares, repayments, decision rights.
• Overextending: Parents should never compromise their own retirement.
• Tax or pension implications: Always get tailored financial advice.

Final Word

Helping your child into their first home doesn’t mean putting your own plans on hold. When structured with clarity and guided by strategy, it’s a powerful way to build multi-generational wealth, and strengthen family outcomes.

Once you've discussed the right structure with your mortgage broker, accountant, or lawyer, we're ready to help you execute it strategically. If you don't have professionals you trust, we can connect you with experienced experts our clients have had great success with. If you're ready to explore secure, smart ways to support your kids into the market, let’s talk.

Disclaimer: This article provides general information only and is not intended as legal, financial, or tax advice. The information is based on current market data and legislation as of July 2025. Individual circumstances vary, and we strongly recommend seeking independent professional advice before making any financial or property-related decisions.

Sources

1. Productivity Commission, "Wealth Transfers and Economic Mobility," 2024
2. Cotality, "Regional Market Update – July 2025"
3. REBAA, "Why Use a Buyer's Agent," 2025