Using Gifted Funds For your Down Payment In Canada

With rising home prices across Calgary, Alberta, and British Columbia, many first-time buyers receive help from family members. The good news: most Canadian lenders accept gifted down payments. But there are specific requirements you need to meet, and proper documentation is essential.

Who Can Gift Down Payment Funds

Most lenders accept gifts from immediate family members:

Parents and grandparents
Siblings
Aunts and uncles (some lenders)
Legal guardians

Some lenders are more flexible than others. If your gift is coming from a non-traditional family member, let us know — we can match you with a lender who will accept it.

The Gift Letter Requirement

Every gifted down payment requires a signed gift letter. This letter must confirm:

The relationship between the gift giver and recipient
The exact amount of the gift
That the funds are a true gift — not a loan
That no repayment is expected or required
That the gift giver has no financial interest in the property

We provide our clients with a template that meets lender requirements. The gift giver simply completes and signs it.

💡 Timing Matters

The gift should be deposited before you apply for your mortgage. Lenders want to see the funds sitting in your account on your bank statements. Last-minute deposits can delay your approval while lenders verify the source.

Documentation Requirements

Beyond the gift letter, lenders may request additional documentation:

Bank statement from the gift giver: Showing the withdrawal or transfer
Bank statement from you: Showing the deposit
Wire transfer confirmation: If funds were transferred electronically
Copy of the cheque: If paid by cheque

This paper trail helps lenders verify the funds came from a legitimate source. It’s part of Canada’s anti-money-laundering requirements.

International Gifts Additional Requirements

If family members overseas are gifting your down payment, you’ll need extra documentation:

Proof of relationship (may require translation)
Bank statements from the gift giver’s home country
Wire transfer documentation showing the full trail
Currency conversion records if applicable

International gifts are absolutely acceptable, but the documentation requirements are stricter. Plan extra time for this process.

💰 Tax Note

There is no gift tax in Canada. Unlike in the United States, receiving a gift — even a large one — does not create a tax liability for you. The gift giver also has no tax obligation on the gift itself (though they may have tax implications if they’re disposing of assets to create the gift).

Combining Gift and Personal Savings

Your down payment can come from multiple sources. For example:

$15,000 from your personal savings
$10,000 from your FHSA
$20,000 gift from parents
$5,000 from RRSP Home Buyers’ Plan

Each source needs appropriate documentation. We’ll provide you with a checklist specific to your situation.

Common Questions About Gifted Down Payments

Can the gift come after I make an offer?

Ideally, the gift should be in your account before you start house hunting. However, we can sometimes work with pending gifts if we have documentation showing the commitment.

Can my parents co-sign instead of gifting?

Yes, this is a different approach. Co-signing means your parents become responsible for the mortgage if you can’t pay. We can discuss which option makes more sense for your family.

What if the gift is in my account for months before I buy?

That’s actually ideal! The longer the funds are “seasoned” in your account, the smoother the documentation process.

Elevation Mortgage
INDEPENDENT MORTGAGE BROKERS · LICENSED AB & BC

Julie & Andy Jeffery — independent mortgage brokers serving Calgary, Nelson BC,
and clients across Alberta and British Columbia.

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