Key Takeaway

Australian lenders will accept gifted deposits from family members, but they require specific documentation to prove the money is a genuine gift and not a loan. You will need a signed statutory declaration from the donor confirming the gift has no repayment obligation, proof of the donor’s identity and source of funds, and bank statements showing the transfer into your account. The documentation must be completed before settlement, and some lenders also assess whether the donor can afford to give the money without financial hardship.

What a Gifted Deposit Is

A gifted deposit is money given to you by a family member (typically a parent, grandparent, or sibling) to help cover part or all of your deposit for a home loan. The critical distinction is that the money must be a genuine gift with no expectation of repayment, rather than a private loan. According to ASIC MoneySmart, lenders need to confirm this because any informal loan arrangement affects your serviceability and the lender’s security position.

The gift can be used to increase your deposit, reduce your loan-to-value ratio (LVR), or help you avoid lenders mortgage insurance (LMI) by reaching the 20 per cent deposit threshold. Foundational finance texts such as Principles of Finance explain that gifts differ from loans in that they carry no repayment obligation or interest cost, which is why lenders treat them separately in their assessment.

What Lenders Require

Most Australian lenders require the following documentation before they will accept a gifted deposit:

  • Statutory declaration: A signed, witnessed statement from the donor confirming the money is a gift with no repayment required, typically on a standard form provided by the lender.
  • Proof of donor identity: A copy of the donor’s driver licence or passport.
  • Evidence of funds: Bank statements or other documents showing where the donor’s money came from (such as savings or the sale of an asset), to satisfy anti-money-laundering requirements overseen by APRA.
  • Transfer proof: A bank statement or transaction record showing the money has been transferred from the donor’s account into your account.
  • Donor’s financial capacity: Some lenders ask for evidence that the donor can afford the gift without causing themselves financial hardship, particularly for larger amounts.

All documentation must be provided before settlement. Lenders will not accept vague promises or informal arrangements.

Why Lenders Are Strict About Gifted Deposits

Lenders are cautious because they need to distinguish between a genuine gift and a disguised loan. If the money is actually a loan that you will need to repay, it affects your borrowing capacity (serviceability) and increases your debt obligations, which the lender must account for in their assessment. Regulatory requirements mean lenders must verify the source of all deposit funds to prevent fraud and money laundering.

The statutory declaration protects both you and the lender. It provides a clear, legally binding record that the donor has no claim over the property and will not seek repayment, which could otherwise complicate ownership or lead to disputes after settlement.

Read also: Buying with a Guarantor in Australia: How Family Security Works

Common Issues and How to Avoid Them

The most common rejection reasons are incomplete statutory declarations (missing signatures or incorrect wording), insufficient proof of the donor’s funds, or evidence suggesting the money may actually be a loan. To avoid problems:

  • Use the lender’s standard statutory declaration form rather than drafting your own.
  • Ensure the donor has their statement witnessed by an authorised person (such as a Justice of the Peace or solicitor) before submission.
  • Provide clear bank statements showing the full transaction trail from the donor’s account to yours.
  • Declare the gift early in your application process so the lender can request any additional documents before the settlement deadline.

If the donor cannot comfortably afford the gift, or if the money comes from an unusual source, expect the lender to ask more questions. Resources such as Finder’s home loan guides note that transparency and early disclosure prevent delays.

Next Step

Contact your lender or mortgage broker as soon as you know you will be receiving a gifted deposit. Ask for their specific statutory declaration form and document checklist so you and the donor can prepare everything in advance, well before your planned settlement date.

General Advice Warning: This article provides general information only and does not consider your personal objectives, financial situation, or needs. It is not financial, legal, or lending advice. Before acting on this information, consider seeking advice from a licensed mortgage broker or financial adviser. Lender requirements, loan eligibility, deposit rules, and documentation standards vary by lender and your individual circumstances. Always confirm current requirements directly with your lender or broker.