Should You Help Your Children Buy a Home?
If your son or daughter is looking to purchase their first home, and you're in a position to assist, you’re not alone—and you’re certainly not wrong to consider it.
Many parents today feel the weight of wanting to see their children succeed, especially as home prices and interest rates remain at historically high levels. In fact, in 2024, the average down payment climbed to $63,000—placing homeownership out of reach for many young people without family support.
According to a recent Redfin study, nearly a quarter of Gen Z and Millennial homebuyers received financial help from their families, whether through gifts, inheritance, or direct assistance.
Now, some in the culture may sneer at this kind of support, but from a Christian perspective, providing for your children isn’t a sign of favoritism or indulgence—it’s a wise expression of love, stewardship, and legacy (Proverbs 13:22: "A good man leaves an inheritance to his children's children..."). The key is doing it thoughtfully and lawfully, so that a well-meaning gesture doesn’t create unintended burdens.
Let’s walk through the most prudent ways to help, as well as the common pitfalls that can undermine even the best intentions.
✅ Three Wise Ways to Help Your Child Buy a Home
1. 💵 Give a Gift—Within the IRS Limits
One of the simplest ways to assist is to offer a cash gift, especially to help with a down payment. In 2025, you’re allowed to give up to $19,000 per person per year—or $38,000 if you’re married and giving jointly—without triggering any gift tax reporting.
Gifts above that amount will reduce your lifetime estate and gift tax exemption (currently $13.99 million per person). But unless you’re working with significant wealth, that’s rarely a dealbreaker.
If your child is getting a mortgage, lenders typically require a letter confirming that the gift is not a loan and does not need to be repaid. It's a simple but necessary step.
This is a clean, honorable way to bless your child with no strings attached.
2. 📜 Offer a Private Loan—With Accountability
If you’d prefer your child to have some “skin in the game” while still receiving support, a private family loan can be a powerful tool.
Here’s how it works: You lend the money, your child repays it over time with interest, and you set the terms together. You can even forgive part of the loan annually by using your yearly gift allowance—creating a blend of generosity and personal responsibility.
However, it’s essential to put everything in writing. The IRS requires formal documentation, including a signed promissory note, a realistic repayment schedule, and interest that matches or exceeds the minimum federal rates.
Skipping these steps isn’t just risky—it could lead the IRS to treat the loan as a taxable gift.
For peace of mind, it’s wise to work with a CPA or estate planning attorney to draft the paperwork correctly.
3. 🛡️ Use a Trust for Larger Gifts or Property Transfers
Trusts are not just for the wealthy—they’re a responsible, flexible way to protect and pass on property, especially when the stakes are high.
If you’re planning to transfer a home outright, or want to shield the asset from divorce, creditors, or future disputes, a trust may be the best path forward.
You’ll typically choose between:
Revocable Trust: Keeps you in control during your lifetime and allows easy changes. It also avoids probate after death.
Irrevocable Trust: More rigid, but offers greater protection and tax advantages. It can also allow your child to use the property now, while maintaining legal safeguards.
Trusts can also help preserve family unity, especially when multiple children are involved. Whether it's a family cabin or rental property, a trust can spell out how the property is managed and distributed—avoiding conflict and confusion.
⚠️ Three Mistakes That Can Undermine Your Intentions
1. 🚫 Putting Your Child Directly on the Deed
It may seem like a simple way to share ownership, but adding your child to your home’s title can open a host of problems.
You lose full control of the property. They could sell, refinance, or expose the home to lawsuits or marital division. Plus, if they eventually sell the home, they’ll be taxed based on your original purchase price, which could trigger significant capital gains taxes.
It may feel generous in the moment, but it often creates more harm than good.
2. 🕊️ Leaving the House in a Will (Only)
While a will is an essential part of estate planning, relying on it alone can create delays and costs for your family.
Wills go through probate, a public, court-supervised process that can take months or even years. It also offers no tax planning benefits, and no asset protection during your lifetime.
By contrast, a trust allows for private, immediate, and orderly transfer of property—with the flexibility to address complex family dynamics.
3. 🪙 Selling the Property for $1
This idea—common but misguided—may feel clever, but it’s a legal misstep.
Selling a house for far below its market value is still treated as a gift by the IRS. Your child inherits your original cost basis, which could saddle them with a major tax bill later on.
Worse, this approach offers no legal clarity, no protections, and no real savings. It often causes confusion instead of security.
🧭 Final Thoughts
Helping your child become a homeowner can be one of the most meaningful, lasting contributions you make to their future. But like any major decision, it deserves careful planning, wise counsel, and clear boundaries.
As stewards of what God has entrusted to us, we’re called not just to bless our families materially, but to do so with wisdom, order, and foresight. That means:
Avoiding unnecessary taxes
Preventing family conflicts
Structuring help in a way that honors both giver and receiver
Because giving your child a house shouldn’t come with unintended burdens—it should be a blessing that endures for generations.
