"Home Alone" signed a contract to buy a house in the name of a child, OK?

Buying a house in the name of a minor child has advantages and disadvantages. On the one hand, it can avoid future transfer taxes and fees, but on the other hand, mortgage loans cannot be made when buying a house, and there will be a lot of trouble in the future transfer. Whether or not to be "Home Alone", parents should make a decision after careful consideration.

01

can avoid future gift transfer tax and

buying a house in the name of a child can avoid future gift transfer tax. If you choose to transfer the property as a gift to the child after the child grows up, a 3% deed tax is required. If the name of the underage child is on the title certificate when the house is bought, the child will own the property directly after the child is an adult, and there will be no gift transfer, and the 3% deed tax can be saved.

For example, Aunt Wang is considering buying a house for her son Xiao Ming. If Xiao Ming’s name is written on the title certificate when buying, then Xiao Ming will directly own the house when he is an adult. If Aunt Wang chooses to give the house to Xiao Ming, assuming that the house is worth 5 million in 10 years, then Aunt Wang needs to pay a 3% deed tax, which is 150,000.

02

Minors cannot borrow from the bank

Although they can buy a house in the name of a minor child, the bank grants loans to natural persons with full civil capacity, so they cannot borrow in the name of the child. In this case, parents need to be notarized by the guardian, and the house can only be purchased in full.

If you want to add the child's name to the title certificate and still be able to loan, the parents and minor children can sign together. Under this circumstance, the parents apply for loans and make mortgage commitments from the bank. Generally, the bank will directly review the financial ability of the parents, taking into account the underage children’s inability to repay the loan.

03

It is necessary for minors to sell a house in their interests.

The owner of the house is a minor child, and the transfer of the house is more troublesome than an ordinary house. If for some reason, parents sell the house, they need to show the "Declaration of Selling Real Estate for the Benefit of Minors" and provide a certificate signed by the guardian to ensure that they are qualified as guardians before they can sell the house under the name of the minor.

04

Parents have no right to dispose of the property after adulthood.

Although the property is purchased by the parents, but the children have the capacity for civil conduct after they reach adulthood, they can only dispose of the property by themselves. If you want to sell the property, you must have written authorization from your children, expressing your willingness to sell the property, and the parents will handle it on your behalf. At the same time, notarization is required.