Being able to pay off the down payment on a new home is tough. Many people have turned to their own family to help them pay off their down payment in the form of cash gifts. The problem with this is that tax implications can make things difficult. Cash gifts are acceptable from immediate relatives and also from domestic partners. Gifts of $15,000 are not taxable. Gifts above $15,000 must be reported by the person sending it as a gift on their tax return.
- The fun part of having a home is searching the home online and going through the features but the hard part comes when it is time to make payments.
- Whenever a home buyer turns to a relative in order to make a down payment, the government wants to know because a large amount of cash is changing hands.
- The mortgagor or lender will require from you a letter about the cash payment from the relative that states the donor’s name and their relationship to you.
“If you’re buying a home, you can only use a cash gift from an immediate relative to help get a mortgage to buy a home. That means a parent, grandparent, sibling, or spouse. It’s also generally acceptable to receive gifts from a domestic partner, or significant other, if you’re engaged to be married.”