Buying a House for Your Children (Who Are Under 18)
Category Buying and Selling Property
Should you buy a house and put it in your young child’s name?
This is a common question, and generally, the answer is no. In South Africa, a child becomes a legal adult at 18. Before that, they can’t sign a contract on their own—a parent must help them.
Here’s why it’s usually a bad idea:
1. They Gain Full Control at 18
- Once your child turns 18, they are the legal owner and can do whatever they want with the house.
- They can sell it or take out a loan against it (a bond) without needing your permission at all.
- They get to keep all the money from the sale or loan. If your relationship isn't great at that time, you'll have no say.
2. Marriage Risks
- If your child gets married in community of property (a common way to marry), their new spouse automatically owns half of the house.
- If they later get divorced, the ex-spouse gets to walk away with half the house.
- Note: If your daughter gets married before she turns 18, the law treats her as an adult right away!
3. Getting Your Money Back is Hard (or Impossible)
- Let's say you registered the house in their name, but now you need the money back. It's tough!
- If the house is worth more than R250 000, you need to get a special High Court Order (permission from a Judge) just to sell it.
- The Judge’s priority is the child, not you. The order will likely state that the sale money must be invested for the child's benefit until they turn 18. You won't be able to get your original investment back for yourself.
- Getting this Court Order is expensive, costing tens of thousands of Rands in legal fees.
4. Tax Issues
- Putting the house in their name is seen as a donation (a gift) from you to your child.
- This gift usually means you must pay Donations Tax (currently 20%) to SARS (the tax authority).
- It's hard to call it a loan because a minor can't legally sign a binding loan agreement.
In short: While it sounds nice to give your child a head start, registering property in a minor's name creates major risks and legal hurdles for the parent.
Author Source: A J Murruy – Miltons Matsemela Attorneys
Published 26 Nov 2025 / Views -