If parents provide funds for their children to purchase a house and cannot provide sufficient evidence that the funds are a loan, it is generally deemed as a gift to the children

Marriage is a major event in a person's life, and it is also a hope that many parents have for their children.

Many parents will invest in purchasing houses for their children, and when a marriage breaks down, one parent may claim that the house purchase money is a loan and demand its return, while the spouse of the child may claim it as a gift.

Some courts, in the trial process, may argue that parents have no obligation to purchase houses for their children and that there is no intention to make a gift, thus identifying the amount as a loan without a specified repayment period, which the couple must repay together.

How should such a situation be determined? The Daohua Family Law Firm provides the following analysis.

In life, due to the close personal and property relationship between parents and children, parents rarely leave evidence to prove their investment when they make the payment. The main evidence in court trials is usually the statements of the parties involved, so the following points should be emphasized:

（1）Respect the true intention of the parents. The true intention generally occurs at the time of the investment or shortly thereafter. If there is an agreement between the parents and children that it is a gift or if the parents explicitly state it as a gift, it should be identified as a gift relationship.

（2）According to the principle of "who claims, who proves," if the parents' evidence of the loan relationship is insufficient, it is usually identified as a gift.

This is because, in private lending, the parties involved usually make a written record, requiring the borrower to issue a promissory note. In a gift relationship, there is no issue of subsequent return, and no related evidence is kept. Therefore, the evidence of a loan relationship is easier to preserve than that of a gift relationship.

Moreover, the close personal relationship between parents and children determines that the possibility of parents investing in a gift is higher than that of a loan. In China, when children are unable to bear the cost of purchasing a house, parents often voluntarily invest in purchasing houses for their children to improve their lives and help them establish a family. Therefore, in practice, identifying parents' investment as a gift is also consistent with our life experience.

Therefore, if the parents cannot provide sufficient evidence to prove the claimed loan relationship, it is generally identified as a gift to their children.

Related Provisions:

Article 29 of the "Interpretation of the Supreme People's Court on the Application of the Provisions of the Civil Code on Marriage and the Family"

Before the parties get married, if the parents invest in purchasing houses for both parties, the investment should be identified as a gift to their own children, except when the parents explicitly state that the gift is to both parties.

After the parties get married, the investment in purchasing houses for both parties should be handled according to the agreement; if there is no agreement or the agreement is unclear, it should be handled according to the provisions of Article 1062, Paragraph 1, Item 4 of the Civil Code.

Article 1062 of the Civil Code: The following property acquired by the couple during the marriage relationship is joint property, owned by both parties:

（1）Salaries, bonuses, and remuneration for labor;

（2）Profits from production, operation, and investment;

（3）Income from intellectual property rights;

（4）Property inherited or gifted, except for the property specified in Item 3 of Article 1063 of this Law;

（5）Other property that should be jointly owned.

The couple has equal rights to dispose of the joint property.

Article 1063: The following property is the personal property of one party of the couple:

（1）The personal property of one party before marriage;

（2）Compensation or compensation obtained by one party due to personal injury;

（3）Property specified to be the personal property of one party in a will or gift contract;

（4）Personal daily necessities used by one party;

（5）Other property that should be the personal property of one party.