When parents fund a home, record whether it is a loan or a gift at the time of transfer
In China, parents' premarital contributions default to a gift to their own child. Unspecified contributions after marriage are treated under joint-property rules. From February 2025, where one side's parents fully funded a home during marriage without specifying a gift to their own child alone, a divorce court may award it to that child and then determine compensation for the other spouse. If it is a loan, document and sign it that day.
What it takes
Free. On the day of payment, write a page identifying the recipient and whether the money is a gift or loan, signed by the contributing parents and children. For a loan, have both spouses sign and repeat the description in the transfer memo.
What you may gain
Parents contributing to a couple's home before marriage are deemed to give to their own child unless they explicitly give to both. Contributions after marriage follow any agreement; without a clear agreement, joint-property principles apply. A further rule effective February 1, 2025 permits a divorce court to award a home entirely funded during marriage by one spouse's parents to that spouse, even if the gift agreement did not expressly limit the gift to their child. The court then considers cohabitation and shared children, fault in divorce, contributions to the family and the home's market value at divorce to decide whether and how much to compensate the other spouse. With partial funding by one side's parents or contributions from both sides, allocation to one spouse and reasonable compensation are based on funding sources and proportions. These rules apply throughout China.
Context & considerations
Clarity helps both sides. Parents need not hope that a loan acknowledgment produced at divorce will protect their contribution. Under Interpretation (II), the source of funds itself informs allocation; whose name appears on the title does not decide ownership alone. Recipients also know from the start what the money represents. Treat a loan as a real loan: agree that it is borrowed, specify repayment, label the transfer and retain repayment records where needed. Missing pieces require explanation in court.
Research & references
Supreme People's Court of China (2020). Interpretation (I) on the Application of the Marriage and Family Book of the Civil Code, Judicial Interpretation [2020] No. 22, Article 29. https://www.court.gov.cn/fabu/xiangqing/282071.html; Supreme People's Court of China (2025). Interpretation (II), Judicial Interpretation [2025] No. 1, Article 8. https://www.court.gov.cn/zixun/xiangqing/452771.html; National People's Congress of China (2020). Civil Code, Article 1062(1)(4). https://www.spp.gov.cn/spp/fl/202006/t20200602_463888.shtml