Gifted Down Payments in Canada: The Gift Letter Rules Every Parent and Buyer Must Know

By Jordan Ellis · Published August 22, 2026

Quick Answer

Canadian lenders widely accept down payments gifted from immediate family — parents, grandparents, siblings — with two non-negotiables: a signed gift letter stating the funds are a true gift with no repayment expected, and a 90-day account history showing where the money came from. Gifts are not taxable in Canada and there is no limit on the amount. The gift cannot come from an unsecured loan or credit card advance, most lenders require the giver to be immediate family, and any expectation of repayment makes it a loan — which must then be disclosed and counted in your debt ratios.

The Bank of Mom and Dad funds a large share of Canadian first purchases — but lenders don’t take family money on trust. They take it on paperwork. Here’s the full rulebook, and the down payment calculator to size the gift you actually need.

The two non-negotiables

1. The gift letter. Signed by the giver, on the lender’s template, stating: the amount, the relationship, and the magic words — no repayment is expected. This letter is what legally separates a gift (ignored in your debt ratios) from a loan (counted, shrinking your qualification).

2. The 90-day paper trail. Lenders require 90 days of history on the account holding the down payment. Large recent deposits get interrogated — the gift should land with a matching paper trail: the parents’ withdrawal record, the transfer, your deposit. Anti-money-laundering rules make undocumented cash effectively unusable.

The rules around the rules

Who can give: immediate family — parents and grandparents always, siblings usually. Gifts from friends, cousins, or employers get scrutinized or declined.
How much: no limit. 5% or 100% — though files where the buyer brings nothing of their own sometimes draw extra conditions from insurers.
Not from debt: the gift can’t come from the giver’s credit card or unsecured line. Equity from their home (their HELOC or refinance) is generally fine.
No tax either way. Canada has no gift tax. But watch the source: parents raiding their RRSP pay withholding and income tax on the withdrawal — see RRSP withholding rates before anyone touches registered money. Selling investments triggers capital gains for them too.

If the family wants the money back someday

Then it’s not a gift, and the honest structures are:

Documented loan / second mortgage — registered against the property, disclosed to the first lender, counted in your ratios
Shared-equity arrangement — parents own a percentage; a lawyer drafts it
Co-signing instead — they help you qualify rather than fund you; make sure they read what co-signing actually commits

Never paper a loan as a gift to squeeze past qualification — that’s the definition of mortgage fraud, and it’s discovered exactly at the worst moments (default, sale, separation).

Stack the gift with everything else

The gift is one layer of the stack, not the whole cake: the FHSA ($40k tax-free), the Home Buyers’ Plan ($60k from your RRSP), the first-time buyer GST rebate on new builds, and provincial land transfer tax rebates. A $100,000 family gift plus a stacked FHSA and HBP is how median-income buyers are still getting into six-figure markets — legitimately, on paper, and insured.

One last thing: get the gift letter signed early. Discovering the template exists while your deposit deadline ticks down is a special kind of stress nobody needs.

Official sources

Rules and dollar limits change. Confirm current amounts with the official pages below before you act · Last reviewed August 22, 2026.

Mortgage loan insurance cost (CMHC)

Frequently Asked Questions

Can my parents gift me a down payment in Canada?

Yes — gifted down payments from immediate family (parents, grandparents, sometimes siblings) are accepted by virtually every Canadian lender and mortgage insurer. The giver signs a gift letter confirming no repayment is expected, provides proof of the funds' source, and you provide 90 days of account history. There is no cap on the amount and no tax on the gift for either side.

Is a gifted down payment taxable?

No. Canada has no gift tax — the recipient owes nothing and the giver gets no deduction. One exception to watch: if parents withdraw from their own RRSP to fund the gift, that withdrawal is taxable income to them. Gifts from investments may trigger their capital gains. The gift itself, though, moves tax-free.

What is a gift letter for a mortgage?

A signed document — most lenders have their own template — stating the giver's name, relationship, the amount, that it is a genuine gift with no repayment required, and that the funds are not from borrowed sources. It exists because a repayable 'gift' is actually a loan, and undisclosed loans inflate your real debt load — which is mortgage fraud if deliberate.

Can a gifted down payment be a loan in disguise?

Legally, no — if repayment is expected, it must be disclosed as a loan, and the lender will count the repayment in your debt service ratios, shrinking what you qualify for. Families who genuinely want repayment should structure it openly: a documented second mortgage, a shared-equity arrangement, or a co-signer setup — each with real legal and tax implications worth a lawyer's hour.

Do gifts affect mortgage insurance or minimum down payment rules?

The standard insured minimums apply regardless of source: 5% on the first $500,000 and 10% on the remainder up to $1.5 million. With 20% or more gifted, you skip default insurance entirely — see what the premium otherwise costs in the CMHC insurance guide. Some lenders add conditions on gifted files, like requiring 5% from your own resources for certain programs, so confirm your lender's exact policy early.