Family gifts are one of the biggest advantages a first-time buyer can have — and in Canada there's no cap and no gift tax on a down-payment gift to either party. The real limits are the minimum down-payment rules, not the size of the gift.
It must be a true gift — and from immediate family
For an insured mortgage, the gift must come from an immediate family member — a parent, grandparent, sibling, child, or spouse/partner. A gift from anyone else (an aunt, uncle, cousin, or friend) is generally treated as a borrowed, non-arm's-length down payment, which can increase your default-insurance premium or affect eligibility. Lenders also need confirmation that the money is a genuine gift, not a loan you'll repay — that's done with a signed gift letter stating the amount, the relationship, and that no repayment is expected.
Season the funds
Lenders typically want gifted money sitting in your account before you apply — often 15+ days — with a clear paper trail. Last-minute deposits with no documentation are a common cause of approval delays.
What if the money is borrowed? (Flex-down programs)
Some lenders offer "flex down" or borrowed-down-payment options, where your down payment can come from a line of credit, a personal loan, or a non-family gift. It's a real path to ownership sooner — but it comes with trade-offs: the borrowed amount counts as a debt against your qualifying ratios, and it typically carries a higher default-insurance premium than a traditional or gifted down payment. It's a tool for the right situation, not a free shortcut — worth pricing out with a broker before you rely on it.
Gift vs. loan vs. co-signing
- Gift: cleanest; no repayment, well-defined rules.
- Loan: counts against your qualifying ratios like any other debt.
- Co-signing / joint ownership: powerful, but has real legal and tax implications for the family member.
Your move
Have an explicit conversation about the amount, the timing, and whether it's a gift or a loan — then get the gift letter ready early.