When parents pay for a house, they should clearly state whether it’s a loan or a gift at the time of transfer

There is no cost involved. On the day of payment, write a brief note specifying whether the money is a gift or a loan to the child. Both the parent(s) making the payment and the child must sign it. If it’s a loan, both spouses should also sign. Use the same wording in the transfer description.

Payments made by parents before marriage for a house are typically viewed as gifts to just one child, unless they explicitly state otherwise. After marriage, any agreement governs the arrangement; otherwise, it’s treated as joint property. Since February 2025, if one set of parents fully funds a house during marriage without specifying it’s only for their child, a court may award it to that child upon divorce and later determine if compensation is warranted. Factors considered include shared living arrangements, children born together, fault in the divorce, each party’s contributions, and current market value. Partial funding by one or both sets of parents results in a similar ruling, with compensation based on proportional contributions nationwide.

最高人民法院 (2020). 关于适用《民法典》婚姻家庭编的解释（一）（法释〔2020〕22 号，第二十九条）. https://www.court.gov.cn/fabu/xiangqing/282071.html；最高人民法院 (2025). 关于适用《民法典》婚姻家庭编的解释（二）（法释〔2025〕1 号，第八条）. https://www.court.gov.cn/zixun/xiangqing/452771.html；全国人大 (2020). 民法典（第一千零六十二条第一款第四项）. https://www.spp.gov.cn/spp/fl/202006/t20200602_463888.shtml

This rule applies to both parties involved. Parents no longer need to rely on a post-divorce loan agreement to protect their investment; post-February 2025, the source of funds itself determines ownership, independent of whose name appears on the title. Recipients of such funds also gain clarity early on. To treat it as a loan, all terms must be explicitly documented, signed, and reflected in the transfer description — otherwise, legal justification becomes necessary.