Home Trends from Ed Wang & Chris Wannamaker

THE W GROUP REAL ESTATE

Royal LePage Connect Realty

THE BANK OF MOM AND DAD With house prices and interest rates as high as they are across the country, many home buyers are looking to their family (parents, aunts, grandparents, siblings, etc.) for help in obtaining a downpayment for a home. This gift is not a loan and will often be accompanied with an agreement stating the money is in fact a gift and is not expected to be repaid. The money (typically being about a 20% downpayment) goes toward the purchase of the home and helps many younger home buyers get into the market. Parents (or gift givers) can use borrowed funds as the gift - such as a line of credit - but it's not common practice. Furthermore, there shouldn't be any tax ramifications for either the lending party or the receiving party, but one should check with a tax professional prior to arranging such a gift just to confirm. There are a few rules around the funds regarding how long they need to be in the buyer's bank prior to closing and whether or not they are subject to Canada's anti-money laundering laws, but your real estate agent, mortgage broker and lending bank should be aware of those rules and help you navigate them.

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