Insights

Who will the parents pay for the house before and after marriage in Ningbo?

Ningbo Author：LuXu WANG

Xiao Wang was ready to get married, and his parents offered to contribute money to help him buy a house; after Xiao Li got married, his parents transferred 500000 yuan to help him repay the loan. In contemporary China, parents financing their children’s home purchases is the most common form of financial transfer within families and also the property issue that most frequently gives rise to disputes in divorce cases. Direct to the conclusion: if the parents contribute to purchase the house before marriage and register it under their own children's name, it shall in principle be deemed as a gift to their own children and belong to their personal property (the first paragraph of Article 29 of the Interpretation (I)); After marriage, the purchase of a house by parents shall be handled according to Article 8 of the Interpretation (II) for Marriage and Family from February 1, 2025-if there is a clear agreement (the gift contract states that it belongs only to their children), there is no agreement, the court of one parent's full contribution may decide that the house is owned by one of the funder's children (and the comprehensive factors determine whether to compensate the other party), and the partial contribution of one parent or the contribution of both parents shall be based on the source and proportion of the contribution. For the first time, there are clear and enforceable new rules for the "to whom" issue of parental funding.

1. The time boundaries of the two sets of rules

When dealing with parents’ financial contribution toward purchasing a home, first determine whether the contribution occurred before or after the marriage:

  1. Pre-marital capital contribution: the first paragraph of Article 29 of the (I) of Interpretation-Before the parties get married, if the parents contribute capital for the purchase of houses for both parties, the capital contribution shall be recognized as a personal gift to their own children, unless the parents clearly indicate that the gift is given to both parties. If it is registered in the name of its own children, the house is their personal property;
  2. Capital contribution after marriage: Article 8 of the (II) interpretation is applicable to cases tried after February 1, 2025 (the interpretation will be implemented from February 1, 2025, and the cases of first instance and second instance that have not been concluded after the implementation are applicable). Prior to this, no agreed capital contribution after marriage fell into the common property of husband and wife according to the second paragraph of Article 29 of the Interpretation (I). The rules have been updated and the old conclusion should not be used as the basis.

Four Cases of 2. Pre-marital Capital Contribution

  1. The parents of one party purchased the house with full payment before marriage and registered the name of their children: personal property, divorce is not divided;
  2. One party's parents make a down payment before marriage, register their children's name, and repay the loan together after marriage: The house belongs to the registered party (the children of the down payment party), and the registered party shall compensate the other party for the joint repayment of the principal and interest of the loan and the corresponding value-added part after marriage (Article 78 of the interpretation (I));
  3. Before marriage, the parents' contribution is registered in the name of the other party (daughter-in-law/son-in-law) or in the name of both parties: Unless there is evidence to prove that the parents clearly give the gift to both parties, they still tend to be identified as the gift to their own children, and they will be dealt with comprehensively according to the contribution of capital and the registration situation -- the evidence of such cases (the flow of capital contribution, the meaning of the gift) determines the result;
  4. Both parents jointly contribute before marriage: their respective contributions are regarded as gifts to their respective children. The shares under the name of one party in the house registration shall be converted according to the proportion of both parties' contributions, and those under the name of both parties shall be treated as joint.

3. Post-Marital Contributions: Explaining Three Cases (II) Article 8

Article 8 of the explanatory (II) is the core of the new regulation in 2025, and the logical dismantling of the original text is as follows:

  1. One party's parents fully contribute: if the donation contract clearly stipulates that only one party will be donated to their own children, it will be handled according to the agreement (the house belongs to the investor's children); if there is no agreement or the agreement is not clear, when the couple's common property is divided by divorce, the people's court can decide that the house belongs to the investor's children, and take into account factors such as living together and giving birth to common children, the fault of divorce, the contribution to the family and the market price of the house at the time of divorce, to determine whether the party acquiring the house will compensate the other party and the specific amount of compensation;
  2. Partial contribution by one parent or contribution by both parents: according to the agreement if there is a clear agreement; if there is no agreement, the court can decide that the house belongs to one party according to the litigious request of the parties, based on the source and proportion of capital contribution, comprehensively considering the factors such as common life and gestation situation, divorce fault, contribution size and market price of the house, and the party who obtains the house will make reasonable compensation to the other party;
  3. Weakening of registration factors: the new rules no longer take "under whose name" and "under the names of both parties" as the decisive factors, and the source and proportion of capital contribution have become the basis of judgment-the old cognition that "half of one person is registered under the name of the young couple" has been revised.

Illustration (example, fictitious): The total purchase price of Xiao Li after marriage is 3 million yuan, and the down payment of 1.8 million yuan is fully paid by Xiao Li's parents, which is registered in the name of both Xiao Li and his wife, and the loan is 1.2 million yuan (400000 yuan has been repaid) after marriage. At the time of divorce, according to the first paragraph of Article 8 of the Interpretation (II), the house can be awarded to Xiao Li, who will compensate his wife for the corresponding amount according to factors such as joint loan repayment contribution and taking care of the woman-instead of mechanically dividing it in half.

Whether 4. capital contribution is "gift" or "loan": an indisputable point of contention

The parents did not specify the nature of the transfer. When divorcing, the parents may claim that "it is lent to you and you must pay it back", while the children claim that "it is a gift". There are different treatments in judicial practice: for the capital contribution registered in the name of the young couple and the amount closely corresponding to the purchase of the house, more judges will treat it as a gift (in line with the framework of "gift contract" in Article 8 of the (II) of Family Ethics and Interpretation); However, there are some cases that support parents' claim to borrow money (the children are adults and the parents cannot set the obligation to contribute money). Key in the evidence:

  1. Remarks on transfer voucher ("gift of purchase money" and "loan") are the most direct evidence of meaning;
  2. The promissory note and repayment records serve as proof of the agreement to lend and borrow;
  3. chat records and witness testimonies to prove the true meaning of the investment;
  4. If it is stated in the gift contract that "it is personally owned by my son", the interpretation will be handled directly according to the agreement in Article 8 of the (II).

Suggestions for parents: Before contributing, think clearly whether to "give" or "borrow", and fix it in written form-if you want to prevent marriage change for your children, write a gift contract and indicate "only owned by our children"; if you want to keep the creditor's rights, write a debit note and keep the transfer record. To write nothing is to give the power of interpretation to the judge.

5. decoration capital contribution and loan repayment capital contribution

If the parents' contribution is used for decoration, furniture and household appliances, it is generally not treated according to the share of the house, and the return or compensation is decided according to the nature of the contribution (gift or loan), but it does not directly correspond to the share of the real estate; if the parents' contribution is used for repaying the loan after marriage, it belongs to the repayment of the loan, and the contribution is incorporated into the compensation calculation of the joint repayment part (see the idea of the explanation (I) article 78). Regardless of the type, records of fund transfers must be retained.

Key Points of Practical Operation in 6. Proof and Litigation

After the case funded by parents enters the lawsuit, the attack and defense of proof and cross-examination are concentrated in three places:

  1. Complete restoration of the capital contribution flow: the court will require the complete correspondence of the capital link of "parents' account→children account→seller/loan account", and one more transfer in the middle or mixed with other funds may be questioned-the capital contribution of parents is better paid directly to the seller or loan account to reduce the intermediate link; if multiple transfers have taken place, the capital flow shall be listed one by one and an explanation shall be attached;
  2. Evidence form of meaning expression: the chat record, remarks and witness testimony at the time of contribution can all prove "to whom the gift is given", and the explanation of post-signing is weak; the party who claims to borrow must show evidence such as the IOU formed at the time of contribution or before and after the contribution, the transfer note "borrowing" and so on, and it is difficult to overturn the presumption of gift only by "parents verbally saying that it is borrowed;
  3. Cross-corroboration with the fact of registration and loan repayment: under whose name is registered, who is repaying the loan after marriage, and who lives and uses the house, it forms a complete story line by cross-confirmation with the capital contribution evidence -- single-point evidence is easy to be refuted, and it is much less difficult to determine the facts of multi-link coincidence.

Litigation strategy tips: most of these cases are accompanied by divorce litigation, and the dispute of parental contribution is often tied to the division of the house. The party who advocates that the capital contribution should belong to the children's individual, should put "the time of capital contribution (before/after marriage), the proportion of capital contribution, whether there is a directional donation agreement, registration and loan repayment" into a one-page "statement of capital contribution facts" submitted with the evidence to help the judge quickly restore the facts; In the mediation stage, a compromise plan can also be put forward according to the proportion of capital contribution-a processing framework based on the source under the new regulations, it gives mediation a much clearer baseline than in the past.

7. Capital Contribution Attribution Quick Check and Action List

compress the full text rules into a quick look-up table, and quickly locate the results according to the four dimensions of "investment time + investment method + agreement + registration:

  1. Before marriage, one of the parents paid the full amount and registered their children: personal property (explain the first paragraph of Article 29 of the (I));
  2. Before marriage, one parent should make a down payment, register their own children, and repay the loan together after marriage: The house belongs to the registered party, and the other party is jointly repaying the loan and value-added compensation (Article 78 of the explanatory (I));
  3. Before marriage, parents contribute to register the name of the other party or both parties.: If there is no express to both parties, they tend to give gifts to their own children, which shall be comprehensively recognized according to capital contribution and registration;
  4. After marriage, one parent's full contribution + the gift contract states that it is only for one's own children: it belongs to the investor's children according to the agreement (the first paragraph of Article 8 of the Interpretation (II));
  5. After marriage, one parent fully contributes, without agreement: The court can decide that it belongs to the investor's children, and decide whether to make compensation or not according to the life, pregnancy, fault and contribution (the first paragraph of Article 8 of the Interpretation (II));
  6. After marriage, one parent partially contributes or both parents contribute, without agreement: Based on the source and proportion of capital contribution, it can be attributed to one party and reasonably compensated (the second paragraph of Article 8 of the Interpretation (II));
  7. The claim of capital contribution is a loan: by virtue of the loan agreement evidence such as articles and loan notes, it is treated as a private loan, otherwise it tends to be a gift.

"three needs and three don'ts" action list for parents and children: transfer and leave marks and note the purpose, write clearly "to whom" in writing before contributing, and keep the whole chain certificate of house purchase and loan repayment; do not deliver cash without proof, do not only make oral agreement without paper, do not use "family account" to mix contributing and other funds. The rules are clear, and all that remains is to put the evidence ahead-the 2025 new rules give the investor's parents greater certainty and place the burden of proof more clearly in the hands of those who "want to claim ownership.

Time connection reminder of 8. old and new rules

The interpretation (II) will be implemented from February 1, 2025, and there are several confusing points in the time connection:

  1. For the cases of first instance and second instance accepted after February 1, 2025 and yet to be concluded, Article 8 of the Interpretation (II) shall be applied to the issue of parents' contribution after marriage; the cases that have been finalized before the implementation are not applicable, and the parties cannot apply for rehearing the effective judgment on the grounds of "the new rules are more favorable;
  2. Article 29 of the interpretation (I) has not been abolished, and it is still applicable to the capital contribution of parents before marriage and other capital contribution situations that do not fall into the scope of Article 8 of the interpretation (II) -- the two judicial interpretations are divided according to "time + situation", which is not a substitute relationship;
  3. The parties who have not yet settled the lawsuit should re-evaluate the scheme according to the new regulation as soon as possible: those who originally claimed according to the old standard that "the contribution of parents after marriage is the common property, divided in half", may be awarded to the children of the investor and only compensate the other party under the new regulation, and the litigation strategy and mediation expectation should be adjusted;
  4. For the cases that are being tried in the second instance or are to be appealed, pay attention to the application of the new rules to the "unfinished" cases, and the court of second instance will review according to the new rules -- the reason of appeal and the focus of proof will be updated simultaneously;
  5. If you plan to sign a divorce agreement to deal with the real estate, even if you don't take a lawsuit, you should evaluate the fairness of the agreement according to the new regulations, so as to avoid the excessive gap between the agreement plan and the judgment result when you may enter the lawsuit, which will induce the dispute between repentance and revocation.

If the rules change, the action will change accordingly: make clear the two time coordinates of "contribution time point" and "case conclusion time point" first, and then talk about attribution and compensation, so as not to find a new way with the old map.

9. Frequently Asked Questions

After marriage, parents did not write any instructions on the transfer. Whose money is this?

Look at the purpose and scene: for the purchase of a house and registered in the name of the husband and wife of the child, it will be dealt with on the basis of the source of capital contribution according to Article 8 of the (II) of Interpretation-the full amount of capital contribution may be awarded to the child of the investor and compensate the other party, and part of the capital contribution will participate in the distribution according to the proportion of capital contribution; for general household expenses, it tends to be regarded as the gift to the husband and husband and wife. Transfer notes and chat records are the best forms of evidence; in the absence of such evidence, one can only rely on a comprehensive assessment of the facts to draw conclusions.

When parents make the down payment, can they ask their parents to get the money back when they divorce?

The contribution that has been identified as a gift cannot be directly "returned" by the parents. If the parents claim to borrow and have a debit note, transfer can prove the loan agreement, can be treated as a joint debt of husband and wife.

Do the cases before the implementation of the new rules still follow the old rules?

The interpretation (II) will come into effect on February 1, 2025, and the new regulations will be applicable to the cases of first and second instance that have not been concluded after the implementation; the cases that have been finalized before the implementation are not applicable. Parties whose litigation is still pending must reassess their litigation strategy in accordance with Article 8 of Interpretation (II).

When the parents provided the funds, they did not specify to whom the money was intended. Now that the couple is divorcing, can the parents file a lawsuit claiming that the funds constitute a loan?

There are differences in practice: some courts support parents' claim to return by private loans (the children are adults, and the parents cannot determine the obligation of capital contribution), while some courts tend to recognize it as a gift. The direction of the judgment depends on the evidence-if there is a debit note and a "loan" note, the possibility of supporting the loan is high; if there is no evidence of loan agreement, it shall be treated as a gift and the contribution shall be reflected in the divorce division. If the parents sue alone, the court will also examine whether there is a connection with the divorce proceedings to avoid disguised circumventing the rules on the division of marital property.

Before marriage, parents' contributions are registered in the names of both parties. Must one person be half when divorcing?

Not necessarily. Premarital capital contribution is recognized as a gift to one's own children according to the principle of the first paragraph of Article 29 of the Interpretation (I). Registration in the names of both parties does not mean that the investor gives up the meaning of "giving to one's own children"-the court will comprehensively determine the source, proportion and registration background of capital contribution. One of the investor's children can usually obtain the rights and interests corresponding to the capital contribution, and the other party's share depends on its own capital contribution or post-marriage contribution.

10. Lawyer's Practical Insights

In the case of buying a house with parents' investment, it is often not the emotional account that determines the success or failure, but whether the time and nature of the investment can be clarified with evidence. The first thing you need to do is to find out the bank transfer records, remarks and time of each contribution-whether it is made before or after marriage, which directly corresponds to different rules. Whether the purpose is stated at the time of transfer, whether it is "to buy a house for you" or "to lend you for turnover" is often the watershed between gift and loan. If you don't pay attention to it everyday, there is a gap of hundreds of thousands of ownership in court.

After marriage, the investment should be paid close attention to the agreement. If there is a written gift agreement and it is clear that it will only be given to one's own children, the agreement will be followed. If there is no agreement, one of the investor's children may claim that the house belongs to him and judge whether compensation is needed to be given to the other party. The other party may claim compensation instead of half of course. Therefore, the party who advocates compensation should take the initiative to collect evidence of his participation in loan repayment, decoration and living together. The party who advocates that the house belongs to himself should make up the chain of evidence that the capital contribution comes entirely from his parents.

Parents also need to prioritize their own self-protection. Don't pay only by word of mouth, try to sign a capital contribution or gift agreement, write down to whom, is a gift or loan. We should also pay attention to the updating rhythm of the rules. When the capital contribution occurred and when the case was tried may be of different caliber. Before starting work, we should match the time points instead of directly applying the old conclusions of a few years ago.

The dispute over the ownership of the purchase funded by parents is essentially caused by "the meaning of the contribution is not written down. Article 8 of the new regulation interpretation (II) gives parents the certainty they want most: it is clear that only the gift contract for their children is respected, and the full amount of capital contribution that is not agreed upon also tends to go to the investor's children. There are three suggestions for the parties concerned: first, leave a mark on the contribution and meaning at the same time-choose one of the transfer remarks, gift contract and debit note, so as not to let the family account become confused. Second, the rules before and after marriage are different. Before signing a contract and handling a certificate, first find out which set is applicable. Third, if parents make contributions for the purpose of "preventing children's marriage change", they must state "only belong to our children", note only "purchase money" is not enough to exclude the possibility of joint property of husband and wife.