Do I have to pay tax on cash (house payment) received from parents?

Question

If my parents give me money to purchase a house (let's say they pay half of house price but the house title is under my name), do I have to pay tax on the money receive from them, or do my parents need to pay tax on the money they gifted to a child?

I understand that in US one cannot gift an individual more than $10,000, otherwise he needs to pay tax. What about in Canada?

Answer 1

No, the smart way to get arround is assumming borrow money from you parent,free of interest or very little (private loan).

Answer 2

If your parents' money was used to buy a house you live in as a principal residence, you or your parents do not have to pay taxes on cash (house payments) recd from your parents.

On other other hand, if their money is used to buy a rental property under your name, the prorata share of income earned from the rental property may be attributd back to them (meaning that they have to pay taxes on the shared income, if they are cdn residents).  If they are non residents, the attribution rules of section 74.1 of the cdn income tax act wouldnt apply.

Answer 3

As the receivor of a gift of cash, there are no tax consequences as a result of receiving the gift. The only tax consequences would come about if you invest the money and generate interest, dividends or Capital gains, which you indicate you have not.

For your parents, they have already been taxed on the cash they are gifting to you, and thus there would be no tax implications for them, as long as you have reached the age of eighteen years.

In Canada, gifts of cash are not a taxable event. If they had given you a piece of capital property (i.e. land, building, stocks, etc.) the answer would involve a deemed disposition, which I don't much feel like getting into right now. :)

Answer 4

If you are an adult and your parents GIVE you money, it is yours to do with however you feel like.  You can then buy a house or a car or anything.  We are discussing two separate transactions.

1. Giving money to a family member.

2. What you do with the money

Even if you purchase a business and/or rental property, it's all in your name.  

Regarding the gift tax, no they do not need to pay any as the money they are giving you is has already been taxed.  

If they LOAN you the money there are other considerations.

Answer 5

In the US The GIVER pays gift tax, not the receiver - it';s a gift-tax free to you and the new limit is $12,000 per year per recipient and and if you still have two parents married to each other, it's 24,000 per year they can give each child/recipient - Canada - no idea - google it