Insight
September 9, 2026
A parent may buy a property with a child's future in mind. It might be an investment intended to provide financial security, a home the child could use one day, or part of a broader plan to transfer wealth to the next generation.
Registering that property in the child's name, however, does considerably more than earmark it for the future. It makes the child the legal owner.
South African law allows a minor to own immovable property. The fact that the owner is under 18 does not prevent registration, although the child's guardian will generally need to represent or assist the child in the legal and contractual aspects of the transaction. Under the Children's Act, a guardian is responsible for administering and safeguarding a child's property and property interests and representing the child in legal matters.
For families considering this route, the implications extend well beyond the initial transfer.
The property belongs to the child
The distinction between buying a property for a child and buying it in the child's name is fundamental.
A property purchased by a parent with the intention of giving it to a child later remains the parent's asset until ownership is transferred. Once the property is registered in the child's name, the child becomes the registered owner.
The parents may continue to administer the property while the child is a minor, but their role is that of guardians managing an asset belonging to someone else. They cannot simply treat the property as their own because they provided the purchase price.
This distinction becomes particularly relevant if circumstances change. A family may later need to sell the property, raise finance against it or use its value for another purpose. Each of those decisions must take account of the child's ownership.
How will the purchase be funded?
The source of the purchase price deserves careful consideration before the transaction is concluded. Where parents provide money for a property that is acquired by the child without requiring repayment, the arrangement may constitute a donation or other gratuitous disposition for tax purposes. South African donations tax can apply to gratuitous disposals, subject to the exemptions and thresholds provided for in the Income Tax Act.
There may also be consequences after the purchase. SARS provides that income accruing to a minor child from a donation, settlement or other disposition made by a parent may, in specified circumstances, be taxed in the hands of the parent. Similar attribution provisions can apply to capital gains arising from assets funded through a parental donation or disposition.
Registration in a child's name should therefore not be assumed, on its own, to transfer the associated tax consequences to the child.
Transfer duty and the ordinary costs associated with acquiring property must also be considered. Transfer duty generally applies to the person acquiring the property where the transaction is not subject to VAT, subject to the prevailing thresholds and statutory exemptions. A purchaser's status as a minor does not create a general exemption from these requirements.
Bond finance can complicate the structure
A cash purchase is considerably easier to contemplate than one requiring the property itself to be mortgaged.
Section 80 of the Administration of Estates Act restricts a natural guardian from mortgaging immovable property belonging to a minor without the necessary authority from the Master or the Court. The Master's authority is itself subject to statutory limits and to the requirement that the mortgage must serve purposes permitted by the Act.
The proposed financing structure should therefore be discussed with the attorneys and lender before an agreement of sale is signed. A transaction structured on the assumption that an ordinary mortgage bond can simply be registered over the child's property may encounter difficulties later in the transfer process.
Parents do not retain an unrestricted right to sell
Property ownership can last for many years, and family circumstances rarely remain static throughout a child's minority. A property acquired as a long-term investment may later need to be sold because the family relocates, the investment no longer performs as expected or the funds are required for another purpose.
A guardian cannot freely alienate immovable property belonging to a minor. Section 80 of the Administration of Estates Act requires authority from the Master or the Court, depending on the circumstances and value of the property. The legislation currently limits the Master's authority to qualifying property valued at no more than R250,000.
Barnard recently acted in a High Court application involving residential property registered in the names of two minor children. The Court authorised the sale and transfer and directed that the net proceeds be paid into the Guardian's Fund. The matter demonstrated how a decision made when property is originally acquired can have significant consequences when the family later wishes to dispose of it.
[Related article: Can parents sell property registered in their minor child's name?]
Ownership does not end when childhood does
There is another longer-term consequence which can easily be overlooked.
Under the Children's Act, a child reaches majority at 18. Once the child is an adult, the basis on which the parents administered the property as guardians falls away.
If the property remains registered in the child's name, it remains the child's property.
Parents contemplating an acquisition for a young child should therefore consider whether they are comfortable with the child ultimately having control of an asset that may, by then, be worth considerably more than its original purchase price. A structure designed for a five-year-old needs to remain appropriate when that child becomes an 18-year-old property owner.
Start with the purpose, not the structure
There can be legitimate reasons for wanting to provide a child with property or to begin transferring family wealth during a parent's lifetime. Direct registration in the child's name is one possible route, but it should follow from the family's objective rather than become the objective itself.
The intended use of the property, how the purchase will be funded, possible tax consequences, the need for future finance, the parents' ability to deal with the asset during minority and the child's eventual control of it all form part of the assessment.
Depending on those circumstances, direct ownership may remain appropriate. In other cases, an alternative estate-planning or ownership structure may better reflect what the family is trying to achieve.
Considering those issues before signature and transfer provides considerably more flexibility than trying to restructure ownership once the property has already been registered in the child's name.
Barnard's Conveyancing, Family Law and related advisory teams assist families with property transactions involving minors and the broader legal implications of structuring ownership for the next generation.
