Helping (Grand)Kids Buy a Home: Five Ways to Structure Support
In 2025, 41 percent of first-time homebuyers received down-payment gifts averaging $74,570, highlighting the significant role family members play in helping the next generation enter the housing market.1 For many high-net-worth families, there is value in seeing wealth put to use during one’s lifetime. However, support can take many forms, each carrying different tax and family law implications. When there are multiple children, it may also be important to consider how financial assistance to one child may affect fairness among siblings, and revisit an estate plan accordingly.
Here are five ways to structure support and related considerations:
Provide a Gift — When providing a financial gift to a child, you relinquish ownership and control of those funds. As a result, there’s a risk that funds won’t be used for a home purchase, or could become subject to division in the event of a future relationship breakdown, depending on how the purchase is structured. While Canada does not impose a gift tax (unlike the U.S.), liquidating investments to fund a gift may trigger taxable capital gains or other taxable income.
Leverage Tax-Advantaged Accounts — Rather than providing a large lump sum gift, consider planning ahead through smaller contributions over time to help a child maximize tax-advantaged accounts. Both the First Home Savings Account (FHSA) and
Registered Retirement Savings Plan (RRSP) provide tax advantages through tax-deductible contributions. The FHSA is particularly compelling because investment growth is tax-free and qualifying withdrawals to purchase a first home are also tax-free. Under the RRSP Home Buyers’ Plan (HBP), withdrawals of up to $60,000 can be made tax-free (subject to repayment) for the purchase of a first home. Beyond the significant tax advantages, these accounts can help reinforce the value of saving and longer-term investing.
Loan Funds — Instead of an outright gift, funds may be advanced as a loan, with or without interest. A formal loan agreement should clearly set out repayment terms to avoid future misunderstandings. Proper documentation may help preserve the characterization of funds as a loan in the event of a relationship breakdown.* If desired, the loan can later be forgiven.
Co-Sign the Mortgage — This may help children qualify for a larger mortgage, secure more favourable borrowing terms or enter the market when they might not otherwise qualify. However, a cosigner is legally responsible for the debt if the borrower defaults. The arrangement can also affect the co-signer’s credit rating and
borrowing capacity. In addition, trust reporting requirements may apply where the co-signer is required to be registered on title.
Co-Own a Property — While co-owning a property may help protect your interest in the event of a relationship breakdown, if you already own another property, the share of any future appreciation may be subject to capital gains tax upon sale or disposition.
Supporting a child’s home purchase is a significant and generous act. Since each form of support carries different financial, tax and family law implications, thoughtful planning can help ensure the outcome aligns with your intentions. For a deeper discussion, please call.
*The effectiveness of the loan in protecting against division in the event of a relationship breakdown may vary by jurisdiction and a family law lawyer should be consulted. This article is not intended to be a definitive analysis of family law. 1. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/surveys/mortgage-consumer-surveys/2025-mortgage-consumer-survey
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