Gifts Or Loans From Parents

Buying a property in New Zealand can be challenging, especially for first-time buyers who may struggle to save enough for a deposit. One option that some people consider, is using gifts or loans from their parents to help them finance their purchase. However, this option comes with some risks and implications that should be carefully weighed up before making a decision.

A gift is a sum of money that is given to someone without any expectation of repayment or interest. A loan is a sum of money that is lent to someone with an agreement to repay it over a certain period of time, with or without h interest. Both gifts and loans can affect the eligibility and affordability of a mortgage, as well as the tax and legal implications for both the buyer and the parents.

If the money is a gift, the buyer will need to provide a signed declaration from their parents stating that the money is a gift and that they have no claim over the property or the repayment of the money. The buyer will also need to declare the gift to their lender and to the Inland Revenue Department (IRD), as it may affect their income tax and student loan obligations. The lender may also require the buyer to have some savings of their own, as a gift does not demonstrate the buyer’s ability to save and repay a mortgage.

If the money is a loan, it can be secured by a loan agreement or by a Deed of Acknowledgment of Debt. The buyer will need to provide a written agreement from their parents outlining the terms and conditions of the loan, such as the amount, interest rate, repayment schedule, and security. The buyer will also need to disclose the loan to their lender and to the IRD, as it will affect their debt-to-income ratio and their borrowing capacity. The lender may also charge a higher interest rate or require a larger deposit, as a loan increases the risk of default. Generally, for the bank to accept the loan they will require confirmation that the loan is interest free and that the parents will not take security for the loan.

The parents will also need to consider the tax and legal implications of lending money to their child, such as whether they need to register as a financial service provider, whether they need to pay income tax on the interest they receive, and whether they have a claim over the property if the buyer defaults on the loan.

Using gifts or loans from parents can be a viable option for some buyers who need extra financial assistance to buy a property in New Zealand. However, it is not a decision that should be taken lightly, as it involves significant risks and responsibilities for both parties.

We advise you to seek independent legal and financial advice before entering into any such arrangement and note that any money received is presumed to be a gift unless documented as a loan so it is important communicate clearly and honestly with each other about the expectations and consequences of the transaction.

"Custody" isn't actually a legal word in NZ anymore - here's what we say instead

20 September 2026

He taonga to mokopuna, kia whāngaia, kia tipu, kia rea - a child is a treasure, to be nurtured, to grow, to flourish. A common thing we hear from clients is "I want custody of my children." While most people understand what "custody" means, the reality is that custody is no longer a legal term used in New Zealand family law. In fact, the term was removed from our legislation more than 20 years ago. So, what changed? The Care of Children Act 2004 replaced the old concepts of "custody" and "access" with language that focuses more directly on children's needs and parental responsibilities. Instead of talking about custody, the Family Court now talks about: Day-to-day care (who the child lives with and who looks after them on a daily basis); and Contact (the time a child spends with a parent or other important person when they are not in that person's care). The change was intentional. The law moved away from language that can sound like a child is something to be "owned" or "won" by one parent. What does "day-to-day care" mean? Day-to-day care refers to the practical care of a child, including: Where the child lives; Their daily routine; School attendance; Meals, bedtime, and general supervision; and The everyday decisions involved in raising them. A parent can have: Sole day-to-day care; or Shared day-to-day care arrangements. There is no legal presumption that one parent should have day-to-day care over the other. The Court's focus is always on what is in the child's welfare and best interests. What about "contact"? What many people previously called "access" is now referred to as contact . Contact can take many forms, including: Weekend visits; School holiday time; Telephone calls; Video calls; Supervised contact; or Other arrangements that allow a child to maintain a relationship with an important person. The Court recognises that children generally benefit from having ongoing relationships with both parents, provided doing so is safe and in their best interests. Does this mean I can't say "custody"? Not at all. Many people still use terms like "custody," "shared custody," and "access" in everyday conversation, and most lawyers will understand exactly what you mean. However, if you're involved in Family Court proceedings, you'll hear terms such as: Day-to-day care Contact Guardianship Parenting orders These are the legal concepts that will appear in Court documents and orders. Why does the language matter? The shift away from "custody" reflects a broader change in how New Zealand family law views parenting after separation. Rather than focusing on which parent "gets" the child, the law focuses on: The child's welfare and best interests; Maintaining important relationships; Encouraging parents to work together where possible; and Ensuring children are protected from harm. Ultimately, Family Court decisions are not about determining a "winner" and a "loser." They are about creating arrangements that best support the child's wellbeing. As family lawyers , we offer advice, guidance and representation in family law matters, if you would like assistance or to talk to someone, contact us today. Written by: Eva Leutele

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