Recent data indicates that the percentage of homeowners receiving financial help for down payments has increased from 35% in 2023 to 40% in 2026, with younger buyers, particularly 78% of Gen Z and 56% of millennials, relying heavily on family support.
Financial experts emphasize that many young adults are delaying home purchases due to financial challenges, with 31% of Gen Z and 24% of millennials citing these concerns. Certified public accountant Tim Steffen notes that parents and grandparents are stepping in to assist first-time homebuyers who struggle with down payments.
The article outlines tax-friendly strategies for gifting, including the annual gift tax exclusion of $19,000 per recipient for 2026, which allows parents to help without incurring tax liabilities. Additionally, it discusses the benefits of lifetime gifting versus inheritance, particularly regarding capital gains taxes.
For instance, assets gifted during life retain the original purchase price for tax purposes, while inherited assets receive a step-up in basis, potentially reducing tax burdens for heirs. Understanding these financial dynamics is crucial for families navigating the current housing market and considering how best to support their children in achieving homeownership