Parents contribute funds for children's house purchase; if sufficient evidence of loan is not provided, it is generally regarded as a gift to the children

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

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

Some courts, in the process of trial, would argue that parents have no obligation to purchase a house for their children, and thus consider there to be no intention of gifting, treating the amount as a loan without a specified repayment deadline, which both husband and wife need to repay together.

How should this situation be identified? The Dao Hua 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 contributions when they invest. During court trials, the main evidence is often 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 investment or shortly thereafter. If there is an agreement between the parents and the child regarding a gift or if the parents explicitly state it as a gift, it should be deemed a gift relationship.

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

This is because, in private lending, both parties usually make a written record, requiring the borrower to issue a receipt. In a gift relationship, there is no issue of subsequent return, and relevant evidence is not kept. Therefore, it is easier to preserve evidence in a lending relationship than in a gift relationship.

And, the close personal relationship between parents and children determines that the possibility of parents making a gift is higher than lending. In China, when children are unable to bear the cost of buying a house, parents often voluntarily provide funds to buy a house for their children, in order to improve their children's lives and help them establish a family and career. Therefore, in practice, recognizing parents' contributions as gifts is also consistent with our life experiences.

Therefore, if the parents cannot provide sufficient evidence to prove the claimed loan relationship, it will generally be deemed as a gift to the children.

Relevant provisions:

Article 29 of the "Interpretation and Application of the Marriage and Family Article of the Civil Code"

Before the parties get married, if the parents contribute funds to purchase a house for both parties, such contribution shall be deemed as a personal gift to their own children, except when the parents explicitly state that the gift is to both parties.

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

Article 1062 of the Civil Code of the People's Republic of China: During the existence of the marriage relationship, the following property acquired by the husband and wife shall be the joint property of the husband and wife, jointly owned by them:

(1) Salary, bonuses, and remuneration for labor.

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

(3) Income from intellectual property rights.

(4) Property inherited or gifted, except as provided for in the third item of Article 1063 of this Law.

(5) Other property that should be jointly owned.

Husband and wife have equal rights to handle the joint property.

Article 1063 The following properties shall be the personal property of one spouse:

(1) The pre-marital property of one party.

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

(3) Property specified in a will or gift contract to be solely owned by one party.

(4) Articles of daily use exclusively for one party.

(5) Other property that should be attributed to one party.