The Fortunate Ones
If you’re fortunate enough to be a parent, you’ve already won in life. As challenging as parenting is at times, they truly are our greatest treasure. Of course, two things can be true simultaneously, the flip side of the parenting coin is that good parents are always wondering, “How can I do best by these humans I’ve been entrusted with?”‘
If you follow our social media, you know we’re as intentional in our parenting as we are in our business. We entered the teen years last year, the questions we face now as parents are different from the ones when they were little. What should a first job look like? How do we navigate technology? Do we invest in an RESP if we suspect they might not want limited post-secondary options? We could go on!
It’s undeniable at this stage that the environment our children face will be wildly different from the one we grew up in; just as the environment I’ve experienced as an adult has been markedly different from the one of my parents’ generation. Economically, many of the opportunities that existed in the 90s and 2000s began drying up in the 2010s, and the 2020s have seen inflation explode and incomes remain relatively flat. The same home that used to require 4x annual income to purchase now needs 15x. There’s no amount of dodging avocado toast that’ll make that gap up.
As a result, many of the parents of teens and twenty-somethings are recognizing this generational imbalance and trying to help their kids navigate it. Now, on the topic of ‘fortune,’ we recognize not everyone’s in such a position. I wasn’t, Amanda wasn’t, and many of you are not – we have solutions for you too, but for those that are considering this option we wanted to share some details.
There Is (Currently) No Gift Tax Or Limit
You can hardly move in this country without being taxed through the nose, so this is a truly rare opportunity… Canada has no gift tax! In the vast majority of cases, if you give your child money toward a down payment, you don’t pay tax on it, and they don’t declare it as income. There’s also currently no legal cap on the amount. On insured mortgages (now available on homes up to $1.5M federally), 100% of the down payment can come from gifted funds. Finally, the gift also doesn’t impact their mortgage qualification like a loan would.
More good news, it’s actually a fairly simple process. Every lender will require a gift letter, a short signed document confirming the money is a true gift, not a loan, and that the donor has no ownership claim on the property. Ideally, the funds land in the recipient child’s account well before the mortgage application. Some lenders want 15 days of ‘seasoning;’ others want more. The earlier, the better.
So, How Much Are Families Gifting?
Given the extreme housing inflation in Canada’s major metros many prior generations recognize that what benefited them has created a potential generational imbalance, and they are looking for ways to help mitigate that for their kids. Again, not everyone has this opportunity or perspective, but we’re seeing it increasingly as inflation continues to outpace income.
Take a deep breath… as of early 2026, national estimates put the average parental gift around $167,000. In British Columbia, that number climbs above $230,000 – which tells you everything about what’s happened to property values here. In our experience though, more commonly we’re seeing gifts starting in the $20,000-50,000 range to help supplement the kids own savings. This is a philosophical decision as well as an economic one, giving your kids more financially may come at the cost of them finding their feet as best they can. ‘The Prodigal Son’ is one of the more famous parables for a reason – *spoiler alert* the kid got his inheritance early and blew it.
Where Else This Goes Sideways
That’s not the only danger though. As you’d expect, gifting a down payment, or even a partial downpayment, changes the family dynamic. If you have multiple kids, it can create expectations, and frankly, each child may not be equally responsible or prepared for this. You also need to take into account your own ability to follow through financially, you might be able to help your firstborn, will that still likely be the case for your thirdborn in six years?
If the relationship changes, a gift is still a gift – you have no legal claim on the asset and if you try to assert one it can come with relational, legal and accounting consequences. These conversations should start early, ideally over the course of years or months. The nature of the gift needs to be understood by all parties long before you write the cheque.
How We Help
Increasingly we’re having parents reach out to us for these conversations, especially now that entry level condos and townhomes have seen a 10% pullback in many markets. The conversations begin with the financial picture, the ‘time value of money’ shocks many parents into seeing why this is such a powerful gift, but we do take the time to discuss how their gift will impact the relationship, the potential pitfalls, and how we’ll navigate the transaction together. Do they want to be hands on? Do they plan on coming to the inspection? Are they going to compare it to their first home? Etc.
If you’re thinking about helping your kids buy in the Fraser Valley/Lower Mainland, or if your kids have floated the idea, we’re happy to sit down and walk through it with our usual openness and candour. There is no ‘right answer’ on this. Not every parent could or should do this; and not every kid needs or wants it either. Whatever’s right for your family, we’ll work it all out together.
