There is a touchy topic that always comes up in this hot real estate market when you have children over the age of 25.  They want to purchase a home but with house prices and the new lending guidelines, unless they live in a remote area, they are going to need their parents assistance.

We have all heard the stories about how families fall apart when money is involved.  I have 2 children and would hate to see money tear their relationship apart so, you may want to consider the impact should you gift a house or monies to 1 child and not the other.  Even though you make the estate fair at the end, protect your children by considering getting 3 independent appraisals to ensure no one can say in the future that the property was undervalued and they didn’t  pay fair market value.  If you gift a home or sell under market value, there are future capital gains to be taken into consideration, speak to your accountant or tax expert for these numbers.

It would be better in this scenario to avoid tax implications and arguments and sell for the market value and take back a mortgage with no payments than to sell under market value or for $1 (which many people do).

What about a cottage?  Will everyone be able to continue to use it, will there be designated weekends?  Who will pay for the maintenance and upkeep?  Best to put everything in writing so there is no confusion or trouble down the road.  You know what they say, ‘never mix money and family’ but there are ways to avoid problems down the road and keep peace and harmony within your family.

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville,  Burlington, Mississauga and Toronto and offering all mortgage related services such as 1st & 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  or call 416-459-2406

Pitfalls of gifting a home to your child