What could be a better gift than tax-free help with a down-payment on a home?
Under current IRS guidelines (please consult your accountant for tax
advice and ramifications) each parent or relative can give up to $15,000 to each child or relative every year. That would mean that a mother and
father can each give $15,000 a year to each son, daughter, and/or
grandchild that would amount to $30,000 a year in total per couple for each person that you gift.
If both sets of
parents want to help with the down-payment on a house; each of the
parents can give each borrower a gift of $15,000 per year. That would
add up to $60,000 for both of you! That is a significant amount of
tax-free money to help you buy a home for your family! Of course, a gift
can also be less than $15,000, so give what you can.
That amount is per calendar year and not based on every twelve months. That would mean that they could give $60,000 (or more) in December 2019 and an additional $60,000 (or more) in January
For most types of mortgage loans, you will need to have 5% of the amount of the down-payment on your own, however, there are exceptions. To find out the exceptions and details about how gift money can be applied to your down-payment contact a reputable mortgage broker.
More about tax-free gifts and life-time limits: https://smartasset.com/retirement/gift-tax-limits
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About the author: Marilyn Messenger, a licensed real estate broker, Certified Residential Specialist, and Accredited Buyer Representative, and Certified Luxury Homes Marketing Specialist is associated with Andrew Mitchell and Company in Concord has been representing home buyers and sellers in Wayland, Sudbury, Maynard, Stow, and Concord MA since 1993. www.MarilynMessenger.com for more. Visit www.marilynmessenger.com to see homes for sale, get the latest real estate market reports, and learn about having your own buyer agent on your side.
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