The Best Ways to Give Real Estate to Your Kids

Thinking of Helping Your Kid Buy a Home? Here’s How to Do It the Right Way (Without the Drama)

If your kid is trying to buy a home and you're thinking of stepping in to help—you're not alone. And you're definitely not wrong for wanting to give them a leg up in this wild market. However, without the right plan, even the kindest gesture can turn into a tax mess —or worse, family stress.

We all know this market isn’t easy—especially for first-time buyers. In 2024, the average down payment hit $63,000, and mortgage rates haven’t exactly helped. According to Redfin, nearly 1 in 4 younger buyers needed help from family—whether through a gift, inheritance, or support in some other form.

So no, it’s not “nepo-homebuyer” energy—it’s just smart planning. And if you’re going to help, let’s make sure it’s done right.

Here are 3 smart ways to help your kids buy a home—and the 3 mistakes I see happen, and hope you avoid.

3 Ways to Help—Without the Headaches

1. Gift Cash the Right Way
Clean, simple, and totally above board—as long as you stay within the IRS limits. In 2025, you can gift up to $19,000 per person (or $38K as a couple) per year without tax consequences. Anything above that just chips away at your lifetime exemption, which is over $13 million per person right now.

Just make sure if they’re using the money for a down payment, you provide a gift letter stating it doesn’t need to be repaid. Easy peasy.

2. Be the Bank (But Set It Up Right)
Want them to have skin in the game? Consider a family loan. You set the terms, they pay you back (maybe), and you can even forgive chunks of it each year using that same $19K gift limit.

BUT—don’t skip the paperwork. The IRS wants to see a real loan agreement with interest and a payment plan. Have a CPA or estate planner help you draw it up. Trust me—it’s worth it.

3. Set Up a Trust
Trusts are for everyone. If you’re gifting a property, want to protect it from divorce, or plan to pass down a vacation home someday, a revocable or irrevocable trust can help you do that with less drama and more control.

Revocable = flexible and amendable.
Irrevocable = stronger asset protection.

It also makes things easier for your kids down the road—no probate court, no family drama, just a clear plan.

3 Mistakes to Avoid

1. Adding Your Kid to the Deed
It might seem like a quick fix, but it opens the door to tax issues and legal headaches. You could lose control of the property, and they might get stuck with your original cost basis when they sell—hello, capital gains taxes.

2. Leaving the Property in a Will (Only)
Yes, it technically works. But it also puts the property into probate—a long, public process that can delay everything and cost your estate money. A trust handles all of this cleanly and privately.

3. Selling the House for $1
I hear this one often.
The IRS still considers it a gift—and not a great one. It triggers tax reporting, gives your child your old cost basis (more taxes later), and adds unnecessary confusion. Just don’t.

Bottom Line

Helping your child buy a home is a powerful way to set them up for success—but it has to be done with a plan. Whether you're gifting money, loaning it, or setting up a trust, doing it the right way can help avoid future stress and maximize the impact of your generosity.

If you need a great estate attorney, CPA, or lender to talk this through with, I’ve got a list of trusted local pros I can connect you with.

And of course—if you need help finding the right home or figuring out where to start in San Diego real estate—I’m here for that too.

Let’s make this a win for everyone. 🏡