A First Time Buyers Guide to Gifted Deposits

A gifted deposit is money given to a homebuyer to help them buy a property, usually to cover part or all of the mortgage deposit. The money must be a true gift — it does not need to be repaid, is not a loan, the giver will not own any part of the property, and there is no expectation of interest or future repayment.

Gifted deposits usually come from parents or grandparents, and some lenders are most comfortable with gifts from close family members. Some lenders may also accept a gift from a friend, partner or more distant relative, but this can involve extra checks about the relationship and whether the giver expects anything in return.

Sometimes yes, but it can be more complicated. Your lender and conveyancer may need extra evidence to comply with anti-money laundering rules — bank statements, proof of identity and address, evidence of how the money was built up, and confirmation the gift is not a loan.

They can, depending on the amount and how long the giver lives after making the gift. Individuals can usually give away up to £3,000 each tax year using their annual exemption. If the gift is above this, it may be a potentially exempt transfer — if the giver lives for seven years after the gift, it usually falls outside their estate for inheritance tax.

Your lender and conveyancer will usually ask for a gifted deposit letter or declaration, photo ID, proof of address, bank statements, evidence of where the money came from, and confirmation the money does not need to be repaid and the giver will have no legal interest in the property.