We want to help our 28-year-old buy his first home. Should we take out a mortgage?

September 9, 2026 — 5:00am

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We would love your advice on helping our 28-year-old son buy his first apartment. He has saved more than $200,000 but, having recently completed his PhD, is looking for a postdoctoral position. Meanwhile, he earns money tutoring and marking exams, which makes obtaining a mortgage difficult. He currently pays $500 a week rent.

We are self-funded retirees and don’t want to gift him money or compromise our retirement capital.

We are considering using his savings as the deposit on a property costing around $600,000 and taking out the mortgage in our names, with him making the repayments. We would document the arrangement and amend our wills so our other child is treated fairly.

Is this sensible, and what structure would best protect us while helping him buy his home?

It’s most important that your names do not go on the title deed. Otherwise, you could face substantial capital gains tax when transferring your interest to him, and he might lose valuable first-home buyer stamp duty concessions.

I recommend going through a good mortgage broker. The challenge is finding a lender prepared to let your son own the property while you become responsible for the mortgage if necessary. The broker should investigate whether his $200,000-plus deposit and current income could qualify him for a loan in his own name, with you providing only limited support or a guarantee. That would reduce your exposure. His deposit is around one-third of the purchase price, but remember that if you guarantee the loan, your assets could ultimately be at risk if he cannot make the repayments.

The challenge is finding a lender prepared to let your son own the property while you become responsible for the mortgage if necessary.

Also talk to an estate-planning lawyer. Any mortgage payments you make on his behalf should be treated as a loan rather than a gift and properly documented. The loan could be repayable when he eventually sells the property, and your wills should deal with any outstanding amount so your other child is treated fairly.

I am 68 and my assets are a little over the pension assets-test cut-off point. If I buy an asset in July 2027 and sell it six months later for a capital gain of $100,000, what will my tax position be? My income is mostly from my tax-free superannuation. Would the tax be different if I could qualify for a part age pension?

Because you have held the asset for less than 12 months, there is no indexation, so the $100,000 gain will simply be added to your taxable income. The normal tax on that would be $20,520, but under the new rules, the gain is subject to a minimum tax rate of 30 per cent, taking the tax to $30,000. However, recipients of certain income-support payments, including the age pension, are exempt from the 30 per cent minimum tax. Therefore, if you qualified for even a part age pension, the minimum 30 per cent tax rate would not apply and your tax payable would be $20,520.

If I have $500,000 in super, my deemed fortnightly income is $540. However, my $500,000 is actually earning $1250 a fortnight at 7 per cent. As far as my pension goes, does Centrelink assess the deemed amount or the actual amount?

Deeming gives Centrelink a notional income from your financial assets, regardless of what they actually earn. However, with $500,000 in super, I suspect the assets test rather than the income test may determine your age pension entitlement, in which case the deeming calculation may make no difference.

Could you please explain what it means to commute money from a pension account back to an accumulation account?

I am told that doing this before 30 June can reduce the amount counted against my transfer balance cap (TBC), allowing me to take advantage of future increases in the cap, currently $2.1 million. Is this correct, and are there other advantages?

Mindy Ding of the Entireti Technical team says that a pension is commuted when some or all of the money supporting it is taken out of pension mode. The money can either be paid to you as a lump sum or transferred back to your accumulation account.

Commuting money does create more room under your TBC, but it does not increase your entitlement to future increases in the cap. That entitlement is based on the highest percentage of your TBC you have ever used. Once you have used that percentage, commuting money later does not undo it.

There can, however, be other advantages. A commutation can create TBC space to receive a death benefit pension from a spouse, helping retain more money within super.

It can also reduce deemed income under the income test for certain Centrelink-issued concession cards, including the Commonwealth Seniors Health Card and Low Income Health Care Card. It may also improve Centrelink entitlements where assets held in the accumulation account of a person, or their spouse, under Age Pension age are sheltered from assessment.

Noel Whittaker is the author of Retirement Made Simple and other books on personal finance. Email: [email protected]

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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Noel Whittaker, AM, is the author of Making Money Made Simple and numerous other books on personal finance.Connect via X or email.AdvertisementAdvertisement