Family disputes over gifted down payments on the rise: Law firm
BNN Bloomberg
As more and more parents provide financial help to their children to buy a home, one Toronto-based family law firm said it’s seeing an increasing number of clients who are feuding with their kids over gifted down payments.
As more and more parents provide financial help to their children to buy a home, one Toronto-based family law firm said it’s seeing an increasing number of clients who are feuding with their kids over gifted down payments.
“I think it's coming to a head because of the state of the housing market for so long,” Kevin Caspersz, senior associate at Shulman & Partners LLP said in an interview Thursday.
As home prices hit new highs across the country, more buyers are tapping the ‘Bank of Mom and Dad’ to get into the real estate market, but that comes with risks.
A recent CIBC Capital Markets report estimated that nearly 30 per cent of first-time homebuyers received financial help from family members over the past year – an increase of about 10 per cent from 2015.
The report also found the average amount gifted hit $82,000, though the average number is as high as $130,000 in Toronto and $180,000 in Vancouver.
Caspersz said a number of factors need to be discussed between parents and children before these large sums of money change hands including whether the money will need to be repaid and if any interest will be owed, what happens to the money should the child’s marriage or relationship break down and whether the child’s partner is entitled to any portion of the gift.
