The decision of a parent to help a child buy a first home is common, often generous, and practically complex. When cash or bank transfers are used to cover a down payment, the legal characterization of that movement of funds is crucial: was it a loan, a gift, or an advance on an inheritance? To prevent later claims or confusion among
heirs, financial support should be documented clearly at the time of the property transfer. This article explains a widely used route — making the payment at the closing and recording the donor’s intent in the public deed — and sets out the reasons this approach is preferred for clarity and legal safety.
Two separate but related issues shape the practical choice: the mechanics of the purchase and the legal form
of the donor’s act. On one side there is the buyer’s obligation to the lender when a mortgage is taken; on the other side there is the origin of the funds used for the price or the deposit. A carefully drafted notarial record can reconcile these elements by showing that the parent intended a liberal transfer to the child and that the payment was made directly to the seller at the time of the deed. This preserves
the buyer’s standing with the bank while creating a public trace of the donor’s gift.
How an indirect donation at closing works and why it helps
An effective technique is the indirect donation executed during the public closing: the donor provides a circular cheque or an immediate bank transfer made out to the seller, and the notary records a declaration that the sum is handed over as a gift to the buyer. The term indirect donation describes a gift realized through payment to a third party (the seller) rather than first crediting the beneficiary’s account. This route avoids the appearance of an unsecured personal loan or an opaque transfer between private accounts, because the notary’s act makes the donor’s intent opposable to third parties and documents the origin and purpose of the funds.
Practical steps to prepare before the deed
Advance coordination with the bank and the notary is essential. Requesting a circular cheque made out to the seller or arranging an irrevocable transfer with a clear description in the payment reason are practical measures. The donor should bring proof of fund availability so the notary can include precise information in the public deed about where the money came from and why it was provided. Clarifying these points also helps confirm the distinction between who holds the mortgage and who supplied the down payment: the borrower remains responsible for the mortgage if the loan documents name them as the debtor, while the parent’s contribution is recorded as the source of the purchase funds.
Legal risks when a notarized act is missing
Simply moving money via bank operations without a formal public deed can expose the beneficiary to future reversals. The Italian Supreme Court (Corte di Cassazione) underlined this risk in sentence 23868 (26 August 2026), ruling that for substantial transfers the absence of a notarized public deed can render the donation null. The Court emphasized that a mere bank transfer or withdrawal does not automatically constitute an indirect donation unless supported by the legally required form when the amount is significant relative to the donor’s overall estate.
The Cassation ruling and its practical meaning
The ruling involved a large withdrawal from a joint account where the recipient relied on the account holders’ supposed consent. The judgment clarified that, for amounts of notable size, formalizing the donation through the notary is mandatory to show the donor’s genuine and documented intention. This means parents and children cannot assume that a transfer recorded in bank statements will substitute for the required notarial evidence.
Consequences, restitution and long-term exposure
If a court finds a donation null because the formal requirements were not met, the recipient must return the capital and any fruits (interest, dividends) accrued in the interim. Moreover, actions to challenge the transfer do not lapse quickly: heirs or creditors can raise objections later, and a lack of notarization leaves the recipient exposed to claims that could arise even years after the transaction. For this reason, when the amounts are not trivial it is prudent to involve a notary and, where appropriate, seek personalized advice on tax and inheritance consequences, remembering that within certain limits — up to one million euros according to some interpretations — different fiscal rules may apply but should always be verified against current law.
In short, a parent who wants to help a child buy a house should aim to create an unmistakable paper trail: arrange payment at the closing, secure a notarial declaration of the donor’s intent, and coordinate with the bank and lender. Doing so protects both donor and beneficiary, clarifies responsibilities for the mortgage, and reduces the chance of later disputes over whether the transfer was a gift or something else.