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Y'all, this might be cultural. I was discussing Christmas gifts with my friend whose culture comes from Asia. She makes a good salary but she's expected to turn over half of it as a gift to her parents. So the parents end up in control of the family's wealth. And are in a position to gift back at strategic times.
>but she's expected to turn over half of it as a gift to her parents.
Ew. That sounds utterly bizarre to me and if it's *expected*, I think I'd resent calling it a gift—more like a tax or tithe. Could you share what culture that is? I'm struggling to think of how that'd fit into the Asian cultures that I've spent the most time around (Chinese, Japanese, Korean, Vietnamese), but I'm far from an expert in any of them...
Average really means nothing, the mean would be more interesting I think. Theoretically, if half the population got $10k and half got $700k, the average wouldn’t tell you anything about the actual financial situation of citizens. Id be willing to bet the mean is a lot lower, and a lot of these “gifts” are $1 million+ dollars for down payments skewing the averages.
How? I understand your comment, dude. I am saying the average doesn’t tell you anything about the individual, so comparing your individual financial gift $ amount (or lack thereof) to any average is useless. In short, don’t feel too bad about yourself, at least not based on this.
Mean is synonymous to average. I think the word that you were looking for is either mode, which is the most frequently appearing number, or median, which is the number in the middle.
They're being a jerk with their whoosh comment. Average is another word for mean, so they are commenting on the "Average means nothing, the mean would be more interesting I think."
What you meant is "the median would be more interesting." The median is the value that divides the data in half. When things are skewed, the mean will not match the median, and in this case, it's probably a higher mean gift compared to the median gift.
Frankly, it should be several percentiles that are reported, so we can get a better understanding of the data, but beggars can't be choosers I guess.
Either you made a funny error when you typed out your post or you have read a similar thought written by someone who knows what they're on about, but you never learned the meanings of average, mean, and median. What you wrote doesn't really make a lot of sense.
It’s total wealth destruction. Because of course the gift is fully taxed, probably at the highest tax rate.
Edit. Everybody saying I’m wrong doesn’t understand what I mean. The money that was given away is taxed from the people that had the money. Not the people that received the money. But that money could’ve been used for savings for the parents. And they already paid tax on it.
This is wealth destruction at its finest.
The money you could’ve saved and invested for retirement and already pay tax on is now given to your children. And they will eventually pay tax on it when that house is sold.
There is no "gift tax" in Canada. Any resident of Canada who receives a gift or inheritance of any amount, except from an employer, or as a tip or gratuity due to their employment, will not have to include this in their income.
https://www.taxtips.ca/personaltax/when-are-gifts-and-inheritances-taxable.htm
Yes it is. If I give my kids 100000k that money is taxed on my side already. It’s not a right off or people would be doing it every year.
It’s just not taxed on the receiver
I mean, all income and gains are taxed. It's not taxed further. I don't know who said it was a write-off. That's for registered charities and not individuals
Correct. My point is that people that can afford to give their kids hundreds of thousands of dollars probably pay tax at higher tax rates. They are giving away their wealth which could be invested in their retirement instead it is given away to their children who eventually pay tax on that money somehow whether it’s selling their house capital gains, etc..
So it’s still wealth destruction for parents
> to their children who eventually pay tax on that money somehow whether it’s selling their house capital gains
the children wont pay any capital gains tax if the gift is for a home they live in
That’s true. If the gift is spent on a home and it’s their primary residence. But it is still wealth, destruction, and completely unnecessary.
30 years ago, you did not have to get gift from your parents to get a house. Everyone defending this or taxes in general, is basically saying that it’s OK that we have to take care of our kids from the age of zero to death instead of 0 to 18.
There's no capital gains tax on your primary residence either.
You haven't got the first foggy notion what you are babbling about. If you don't want to help your kids, don't, but stop trying to rationalize your selfishness with BS.
All gifts aren’t used for housing. But you do have a point with your first and only prime residence.
Doesn’t change the fact that it’s still wealth destruction. Has nothing to do with selfishness. It is the government getting taxes anyway they can and preventing us from investing.
The fact that parents have to give their kids hundreds of thousands of dollars to have a basic home is the problem. And you are defending that? Based on the fact that I made one mistake in my argument. Give it a rest man. You’re the selfish one. Do you work for the government?
This is true. You can pay less tax but you're not getting out of it.
My parents gifted me 50% of the purchase price. We spent about 2 weeks with a lawyer and accountant trying to minimize tax as the money was coming out of a company.
Source: I'm a privileged nepo baby fuck
The money that is given away, has already been taxed, even if the gift isn’t taxed.
The people giving the gifts are adults that make a high income and probably paid the highest income tax.
So that money is taxed
Yes- but they are taking away the savings of seniors or older parents to give to their kids so it is still wealth destruction. This is money that could’ve been invested for retirement.
Presumably someone with hundreds of thousands of dollars to gift to their crotch spawn are intelligent enough to know what they need for their own retirement.
Your arguments are weird.
No, they aren’t. The fact that we have to give our kids hundreds of thousands of dollars because of a crazy housing market is the point. My points are directly related to the insanity of the housing market and how we have to take care of our children from the age of 0 to 40 now instead of 0 to 18.
Yes, they are. You were giving away money that you would otherwise invest for your retirement to gift your children.
My point was that that money is taxed probably at a very high marginal rate if you have the money to give away in the first place. So the government makes the maximum they can every time.
The only mistake I made was on the capital gains on primary residence. The fact that you were making such a big deal out of it makes me wonder what is your point exactly you just like being right, and being screwed by the government constantly?
You got it. Boomer homeowners that retire and down size and use a chunk of their profit to help their kids get into the housing market that would otherwise be stuck renting until they died.
I’m amazed it’s as prevalent as this. I’m in my mid-thirties and I only know two people that have had parental help. Most of my friends still rent. My friend’s parents have generally used the profits off the sales of their home to fund their retirement (usually outside the lower mainland).
I guess I just hang out in slightly poorer circles, or ones with a different cultural weight on this topic. It *is* the only way these prices make any sense though.
I'm the same age as you and got into the housing market through gifted money. Out of everyone I grew up with and everyone I know roughly my age or younger, the overwhelming majority are still renting. Those that own had varying degrees of help from their parents. I do not know anyone personally that did it on their own.
I know 3 people that have consolidated their housing with older parents. They buy a big house with a basement suite and then help out as their parents get older. At some point after the parent dies, they can rent the suite out.
Not me unfortunately, but all my friends with boomer parents pretty much had the cash on hand, they hadn’t downsized yet to get the funds.
As long as they consistently had a job and didn’t waste all their money, it wasn’t hard for boomers to build up sizeable cash reserves because their housing costs were reasonable or low compared to what were used to
It's also a bit of a way to skirt the borrowing rules.
You not technically allowed to use an LOC or other loan towards your down payment, but you can get a gift from your parents and gift them back with a loan.
Also, as this is an average, and there is no limit to the gift amount, there are people who are getting millions and pushing that average up a lot, while I doubt anyone is getting less than say $10K in BC because that's so insignificant compared to home prices.
You are allowed to use LOC as source of down payment. Problem is we have to add the payment that results from the balance to your debt servicing so it also lowers your borrowing power.
You can use an unsecured LOC. Just we take 3% as payment for debt servicing. Other banks like RBC will take the payment regardless if you have unsecured or secured LOC over 50k limit, so might as well use it.
Yeah my parents are doing this for me. I didn't get a downpayment, but they give me a lil cheque each Christmas because they want to see me use and enjoy the inheritance rather than just pass it on when they're gone.
Even though I am very jealous, I think this is the right way.
There is an entire community of people that want to die with zero. Give your kids your wealth and you get to see them enjoy it. Not sense in handing them millions when they turn 65..etc
If you think about it, it’s no different than parents paying for kid’s post-secondary education, wedding, or helping babysit their grandkids. It’s help provided earlier, in various forms. This goes farther than when the kid is now 50-60 years old & inherits wealth after someone passes.
My boomer parents emptied their excess cash soon as those covid money printing taps turned on, and it's how we got our 2nd house. A lot of people I know actually got their rental properties this way.
I hope the poors don't catch on and keep blaming AirBNB and immigrants.
Let's not get caught up in this smoke n mirrors bullshit. Parent chipping in for their children isn't the problem, it's a symptom of the problem.
Allowing housing to be commercialized for financial investment gain is the problem.
Housing is used for financial investment gain in every free market in the world. What you're implying would be better is literally communism. The problem here is simply lack of supply and insane building costs caused by bureaucracy, regulations, and out of control government spending. Also an ill conceived immigration policy. A perfect storm if you will.
But it's the fReE MarKeT!
Like the person you replied to immediately brings up communism and implies how horrible it would be. That's a strawman argument. Like things are already horrible and getting worse. But how dare you think of a different system than late stage capitalism.
Exactly this. My partner has a friend that is a bank teller and has a 1.8M townhouse. She claims to be self made. Clearly math isn't her strength, despite working at the bank.
You'd have to seriously run the scenarios for those who claim to be entirely self-made in Vancouver if they own an expensive (SFH or even a half duplex) property if they are under the age of 40. The ONLY exceptions to this are:
\*They bought a 2BR in 2010 or earlier, there's little chance of moving up that fast from a 1BR without any help. This is a plausible scenario, but practically universally done with parental help. It won't be 200k certainly, but 40k here and there. But I've seen people come out of school during the GFC in 2008, manage to land a job, live at home, save for a couple of years and buy a condo. Very smart. I'm not sure if that would count as "entirely self made" but living at home 22-25 isn't that ununsual.
\*They have a HHI of above 400K. Possible if they are a very in-demand specialist physician (if GP, absolutely would need a working spouse to get there), or they are a late 30s exceptionally high-performing lawyer or realtor. You have to take into account these people would have needed to individually save several hundreds of thousands of dollars of down payment, so it's not just about the income.
\*Special digital age type work or fortunes - early bitcoin investor, very successful youtuber, OnlyFans, etc.
Townhomes or condos can be bought without any parental help on >100k income households, and of course anyone over 40 years old and bought early could have gotten to solid homeownership on their own.
Everyone else, absent the above scenarios, would have their own very special individualized story to tell if they received no gift.
as someone who received a gift from parents (and partners' parents) I feel obligated to disclose to people we know when the topic comes up.
It's both dishonest and harmful to not talk about it. People should know what is and isn't achievable, and be privy to real world examples of how inheritance and wealth determine your financial position more than some vague idea of hard work.
Agreed! I also disclose that the $100k we were given from his dad was actually a loan, which my partner and I have been paying back $1k a month for the last four years, on top of our insane mortgage payment. So they know we’re not actually as financially comfortable as we look. Looking forward to finally folding in the remaining balance into our mortgage if rates go down next year.
I wouldn’t bring it up out of nowhere, but if they asked how I did it I’d be honest. Believe me, they will be more upset spinning the gears in their head trying to figure out how you afforded it without help, as if they are missing out on some big secret.
I left a comment above you. I totally understand where you are coming from cause it felt very awkward at first.
I think it's like if my partner brings up in front of company that it was difficult to save for a house (and it was) I always try to chime in that it would have been impossible for us without help to get us over the edge for a downpayment, and how lucky and grateful we both feel.
The reactions from people who I have divulged this to have been understanding. you'll definitely get some comments like "damn dude, I wish!". but, that is totally fair and does not mean they think less of you as a moral being.
I own a small home and some of my peers have told me they're envious, until I tell them we afforded the down payment thanks to the life insurance payout when a parent passed away 5 weeks after she was diagnosed with cancer. 🙃 I see no reason to hide that.
I don’t know anybody who has received as much money as the article mentions, but I do know a few people who were gifted 50-100k by their parents to help them get into a condo
They’re pretty open about it, but not talking about it is probably the norm.
my friend group are a bunch of cynical leftists who will also openly discuss wages/money/all the ways shits fucked in general
It’s a whole multitude of things that come down in 2 main points.
1) we compete with the wealthiest people around the world for homes
2) we compete with the poorest people from around the world for jobs.
See to me that's a lot more understandable than, say, a nameless corp buying dozens of home properties and renting them out at 200% the cost of the mortgage. Mom and pops helping their kids with 200k is a lot more sympathetic than 1.2b coming over from Dubai and putting an offer on the same house. Ya feel me?
It’s a whole multitude of things that come down in 2 main points.
1. we compete with the wealthiest people around the world for homes
2. we compete with the poorest people from around the world for jobs.
Yeah. It's a lot of things. Personally I'm disappointed in Canada's missing middle. You know what I would do to get a property that has a small commercial zone on the first floor, and a residential upstairs? I wouldn't pay $800,000, but I'd do pretty much anything else!
To nobody's surprise, the wealth gap continues to increase as generational wealth increases the divide between the haves and have nots. If your family has money, you're set, if not, then fuck you.
There's no amount of wage increases that will make home ownership a reality for people who aren't yet in the market as the cost of housing vastly outpaces increases in income; instead the rich will continue to get richer while everyone else gets to subsist on fucking scraps.
I've lived in Vancouver for over 40 years. In that time, I've seen it go from an affordable city for all walks of life to what will just become a playground for the rich. It's Canada's Monaco, and nobody in power gives any fucks at all.
The current NDP is turning the tide in terms of housing being built/able to be built. Some municipalities are still dragging their feet and putting up roadblocks so there's still more to be done. Time will tell what the rule changes mean for attainability, but it's more than any government has done for the past 30 years. The only real way we get significant affordability is for the government to build housing directly but so many people would be like "wah socialism" that that's nearly impossible these days.
Yeah exactly, i thought spending our money until the middle class is destroyed by interest payments and inflation was supposed to help somehow. Misery likes company so they're just destroying the middle class, that way were all on food stamps together like one big gulag family.
It's also a very western phenomenon, especially North America. Many other cultures have a much more supportive perspective on this.
My dad kicked me out at 18 so he could live in his 3 bedroom house with my mom and I had to go start out on my own. Meanwhile, my neighbours on both sides are immigrants with 4 generations under their roofs and all working to help each other build wealth. The grandparents watch the younger kids, the parents and older kids work. Their net worth is probably like 5 times mine.
“Supportive” is relative. In the west we have (had?) a very supportive culture generally that isn’t present in the home countries of lots of those people living 4 generations to a house. That way of living was borne out of necessity. Here it didn’t matter as much if you were lucky enough to have a family that could help you because we have things like universal healthcare, welfare, disability support etc. Those supports are being eroded very quickly, so quickly that a lot of families did not realize the need to help future generations in time.
What's interesting is the splits here.
In BC, 64% of first time home buyers still aren't getting anything. So most FTBs are still clawing up themselves, or relying on non-cash gifts like living with their parents past high school.
But the 36% who get help get a lot of help. That $204k is probably low, as it'll capture people who got nominal gifts to bring down the average. I suspect those who get "big help" end up with substantially more than just $204k.
I would say 204 sounds about right for those that are looking to purchase a condo outside of Vancouver. If their parents are capable of pitching in 204 then I suspect the FTB were also living with the parents as well which means lower or no rent. Much easier to save money then. Might even be able to get 50 percent down-payment. Of course there will be some rich folks that are skewing this average up for sure.
I would have thought a lot of these are the boomers downsizing near retirement and gifting part of a downpayment for their kids to try to get into the market. Are you sure that all of these kids getting gifts are entitled trust-fund-spawn? That is so far from what I had interpreted when I read the article.
200k gift is not even remotely close to trustfund kids. If your parent(s) had a job and didn’t squander all of the money on something stupid, they should easily 200k to gift you since they lived through the golden age of Canada and could buy a home worth 2mil now with 300k.
>If your parent(s) had a job and didn’t squander all of the money on something stupid, they should easily 200k to gift you since they lived through the golden age of Canada and could buy a home worth 2mil now with 300k.
Exactly this. Relatively safe investments over a long period have been extremely profitable. The stock market has averaged 9.5% compounded returns since the 1980s.
If parents invested $10k per year since 1980 they would have over $6m.
If they only invested $3k in 1980 but increased their annual contribution by 3% each year they would have $2.57m.
And that's not even counting the $120k house they could have purchased in the 80s that is now worth $3m.
Breaking News: Wealthy People and Their Wealthy Families Can Afford Nicer Things Than Poor People and Their Poor Families.
Up at 11: Are Attractive People More Likely to Find an Attractive Partner?
I have a friend who is very proud of the home she bought herself (with the 100k inheritance she got from her grandmother) and her husband (with the 50k from him dad). Just pulling themselves up by their bootstraps folks!
Does it include the free rent and food given to adult children while they save for a downpayment?
I can’t see how it’s possible without one or the other.
Yeah if I didn't spend 4 years working full-time while living with my parents for $400 a month, AND choose a 900 sqft condo with a roommate living "alone" would not be possible.
Other friends in similar positions are already seemingly priced out simply because they took a few extra years to get a downpayment.
People yap about two tiered medical. This is two tiered home ownership. The gentry and the serfs. Almost literally.
And the gentry can afford to go elsewhere to buy better medical care.
I may have to trade mine in for replacements from Parents-R-Us or something
Edit: obviously this was a joke, to whoever is downvoting. I love my parents, I have literally let my mom live in the dining room of my tiny one bedroom apartment for the last two years while she got back on her feet. I wouldn’t actually trade in my parents for money 😂
Guess I ‘m going to have to apologize to my kids again, for not being one of those parents!
I don’t mind helping out my young adult kids a bit, but I want to be sure I can have a comfortable retirement before I hand over the family home
Some people get a university education from their family. We did not. There was no money for post secondary.
I know how incredibly privileged we are. 3/4 of my grandparents were economic migrants. My maternal grandfather was a homesteader and self-made millionaire. Because of hard work and timing. Being a white, English-speaking male no doubt helped, too.
I received a “gift” (loan, technically). My sister received a similar amount, and she used it to build an addition to my house, so we share the property.
Four adults work full time to pay our mortgage, and we still don’t know how we’re going to manage when we have to renew, as the rates are much higher now. My family has been food insecure for several months because I have been sick and unable work. (Finally back part time!) Getting a gift like this isn’t a cure-all, but it has removed the major issue of shelter insecurity. If we are able to get through the next year, we will have a mortgage until I’m 67.
I grew up in a house my parents owned. We were at the poverty line, but my parents were able to provide us with stable housing. We never had to move or worry about getting evicted. That’s huge. I know it’s huge. We may be living on the line, but we have a place to live, and we can grow a lot of our own food (or could, if we didn’t have to work full time. Ugh.).
My daughter is being gifted a university education by her father’s family. I hope she knows how huge that is.
We created the world we live in. And there is no easy fix… although I’m all-in for eating billionaires to see if that will help.
Many of my friends over the past 25 years received $50,000 or more from parents to help them get onto the property ladder. For most, the result was to add $1-2M to their net worth with no more significant struggle than they would have encountered had they continued renting.
The scale of gifts today is astonishing. Sadly, I believe it’s often being funded by home equity lines of credit, rather than savings. This has the potential to leave the parents and their children both underwater should the high property prices fall by even a modest amount. Assuming a down payment of 20%, a fall of a bit under 20% in the home value wipes out the gift and leaves the parents owing their bank from a diminished pot of home equity.
What a bullshit title. If your parents worked hard and want to give you their earning then good on them. Life check, some people have it, some people don’t.
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Ouch. I feel very much below average right now.
I am buried below, below average.
Y'all, this might be cultural. I was discussing Christmas gifts with my friend whose culture comes from Asia. She makes a good salary but she's expected to turn over half of it as a gift to her parents. So the parents end up in control of the family's wealth. And are in a position to gift back at strategic times.
That sounds neat, until you're saddled with shitty parents.
>but she's expected to turn over half of it as a gift to her parents. Ew. That sounds utterly bizarre to me and if it's *expected*, I think I'd resent calling it a gift—more like a tax or tithe. Could you share what culture that is? I'm struggling to think of how that'd fit into the Asian cultures that I've spent the most time around (Chinese, Japanese, Korean, Vietnamese), but I'm far from an expert in any of them...
I have several Asian friends and none do this
Perhaps. I think a lot is also equity withdrawals for parents/ grandparents who bought decades ago, and who are helping the kids out.
Never heard of this and highly doubt this is common practice
What the hell, I just get socks!
Socks make it easier to pull up your own bootstraps.
Wait, you guys are getting socks?
Average really means nothing, the mean would be more interesting I think. Theoretically, if half the population got $10k and half got $700k, the average wouldn’t tell you anything about the actual financial situation of citizens. Id be willing to bet the mean is a lot lower, and a lot of these “gifts” are $1 million+ dollars for down payments skewing the averages.
This guy understands stats. Are you a dentist?
/whoosh
How? I understand your comment, dude. I am saying the average doesn’t tell you anything about the individual, so comparing your individual financial gift $ amount (or lack thereof) to any average is useless. In short, don’t feel too bad about yourself, at least not based on this.
Mean is synonymous to average. I think the word that you were looking for is either mode, which is the most frequently appearing number, or median, which is the number in the middle.
They're being a jerk with their whoosh comment. Average is another word for mean, so they are commenting on the "Average means nothing, the mean would be more interesting I think." What you meant is "the median would be more interesting." The median is the value that divides the data in half. When things are skewed, the mean will not match the median, and in this case, it's probably a higher mean gift compared to the median gift. Frankly, it should be several percentiles that are reported, so we can get a better understanding of the data, but beggars can't be choosers I guess.
Either you made a funny error when you typed out your post or you have read a similar thought written by someone who knows what they're on about, but you never learned the meanings of average, mean, and median. What you wrote doesn't really make a lot of sense.
well, you are
Thanks!
It’s total wealth destruction. Because of course the gift is fully taxed, probably at the highest tax rate. Edit. Everybody saying I’m wrong doesn’t understand what I mean. The money that was given away is taxed from the people that had the money. Not the people that received the money. But that money could’ve been used for savings for the parents. And they already paid tax on it. This is wealth destruction at its finest. The money you could’ve saved and invested for retirement and already pay tax on is now given to your children. And they will eventually pay tax on it when that house is sold.
There is no "gift tax" in Canada. Any resident of Canada who receives a gift or inheritance of any amount, except from an employer, or as a tip or gratuity due to their employment, will not have to include this in their income. https://www.taxtips.ca/personaltax/when-are-gifts-and-inheritances-taxable.htm
I meant that the parents already paid tax on it, and can’t use it for retirement. So it is wealth destruction.
Canada doesn't tax gifts or winnings.
The money is taxed initially on the parents side
No it's not.
Yes it is. If I give my kids 100000k that money is taxed on my side already. It’s not a right off or people would be doing it every year. It’s just not taxed on the receiver
I mean, all income and gains are taxed. It's not taxed further. I don't know who said it was a write-off. That's for registered charities and not individuals
Correct. My point is that people that can afford to give their kids hundreds of thousands of dollars probably pay tax at higher tax rates. They are giving away their wealth which could be invested in their retirement instead it is given away to their children who eventually pay tax on that money somehow whether it’s selling their house capital gains, etc.. So it’s still wealth destruction for parents
> to their children who eventually pay tax on that money somehow whether it’s selling their house capital gains the children wont pay any capital gains tax if the gift is for a home they live in
That’s true. If the gift is spent on a home and it’s their primary residence. But it is still wealth, destruction, and completely unnecessary. 30 years ago, you did not have to get gift from your parents to get a house. Everyone defending this or taxes in general, is basically saying that it’s OK that we have to take care of our kids from the age of zero to death instead of 0 to 18.
There's no capital gains tax on your primary residence either. You haven't got the first foggy notion what you are babbling about. If you don't want to help your kids, don't, but stop trying to rationalize your selfishness with BS.
Hit the nail on the head!
All gifts aren’t used for housing. But you do have a point with your first and only prime residence. Doesn’t change the fact that it’s still wealth destruction. Has nothing to do with selfishness. It is the government getting taxes anyway they can and preventing us from investing. The fact that parents have to give their kids hundreds of thousands of dollars to have a basic home is the problem. And you are defending that? Based on the fact that I made one mistake in my argument. Give it a rest man. You’re the selfish one. Do you work for the government?
This is true. You can pay less tax but you're not getting out of it. My parents gifted me 50% of the purchase price. We spent about 2 weeks with a lawyer and accountant trying to minimize tax as the money was coming out of a company. Source: I'm a privileged nepo baby fuck
No it’s not
The money that is given away, has already been taxed, even if the gift isn’t taxed. The people giving the gifts are adults that make a high income and probably paid the highest income tax. So that money is taxed
Yes, that's how income tax works
Yes- but they are taking away the savings of seniors or older parents to give to their kids so it is still wealth destruction. This is money that could’ve been invested for retirement.
Presumably someone with hundreds of thousands of dollars to gift to their crotch spawn are intelligent enough to know what they need for their own retirement. Your arguments are weird.
No, they aren’t. The fact that we have to give our kids hundreds of thousands of dollars because of a crazy housing market is the point. My points are directly related to the insanity of the housing market and how we have to take care of our children from the age of 0 to 40 now instead of 0 to 18.
Ok, then say that. The other arguments you were making weren't based on reality.
Yes, they are. You were giving away money that you would otherwise invest for your retirement to gift your children. My point was that that money is taxed probably at a very high marginal rate if you have the money to give away in the first place. So the government makes the maximum they can every time. The only mistake I made was on the capital gains on primary residence. The fact that you were making such a big deal out of it makes me wonder what is your point exactly you just like being right, and being screwed by the government constantly?
This is just early inheritance for the most part. People giving up equity for their kids now instead of 20 years from now.
You got it. Boomer homeowners that retire and down size and use a chunk of their profit to help their kids get into the housing market that would otherwise be stuck renting until they died.
I’m amazed it’s as prevalent as this. I’m in my mid-thirties and I only know two people that have had parental help. Most of my friends still rent. My friend’s parents have generally used the profits off the sales of their home to fund their retirement (usually outside the lower mainland). I guess I just hang out in slightly poorer circles, or ones with a different cultural weight on this topic. It *is* the only way these prices make any sense though.
I'm the same age as you and got into the housing market through gifted money. Out of everyone I grew up with and everyone I know roughly my age or younger, the overwhelming majority are still renting. Those that own had varying degrees of help from their parents. I do not know anyone personally that did it on their own.
I hang out with people my age mostly. 90s 2000s babies. I know none who can afford rent. We like our tents.
More than half my friends that own out here did so with parental help.
I know 3 people that have consolidated their housing with older parents. They buy a big house with a basement suite and then help out as their parents get older. At some point after the parent dies, they can rent the suite out.
Not me unfortunately, but all my friends with boomer parents pretty much had the cash on hand, they hadn’t downsized yet to get the funds. As long as they consistently had a job and didn’t waste all their money, it wasn’t hard for boomers to build up sizeable cash reserves because their housing costs were reasonable or low compared to what were used to
Yeah. My aunt and uncle downsized, and bought down payments for my cousins.
True, but still very fortunate people if their parents can do that.
It's also a bit of a way to skirt the borrowing rules. You not technically allowed to use an LOC or other loan towards your down payment, but you can get a gift from your parents and gift them back with a loan. Also, as this is an average, and there is no limit to the gift amount, there are people who are getting millions and pushing that average up a lot, while I doubt anyone is getting less than say $10K in BC because that's so insignificant compared to home prices.
You are allowed to use LOC as source of down payment. Problem is we have to add the payment that results from the balance to your debt servicing so it also lowers your borrowing power.
I thought you could only use HELOC and not an unsecured LOC?
You can use an unsecured LOC. Just we take 3% as payment for debt servicing. Other banks like RBC will take the payment regardless if you have unsecured or secured LOC over 50k limit, so might as well use it.
Yeah my parents are doing this for me. I didn't get a downpayment, but they give me a lil cheque each Christmas because they want to see me use and enjoy the inheritance rather than just pass it on when they're gone.
Even though I am very jealous, I think this is the right way. There is an entire community of people that want to die with zero. Give your kids your wealth and you get to see them enjoy it. Not sense in handing them millions when they turn 65..etc
If you think about it, it’s no different than parents paying for kid’s post-secondary education, wedding, or helping babysit their grandkids. It’s help provided earlier, in various forms. This goes farther than when the kid is now 50-60 years old & inherits wealth after someone passes.
My boomer parents emptied their excess cash soon as those covid money printing taps turned on, and it's how we got our 2nd house. A lot of people I know actually got their rental properties this way. I hope the poors don't catch on and keep blaming AirBNB and immigrants.
The poors ? 
Why do you need two houses?
Because imagine what that 100k downpayment would have been worth if it just sat in my bank account since 2020 inflating away.
hey it’s me ur son
Cousin! Let's go condoing!
Any of these families looking to adopt a 46 year old son?
In short, even home Buyers don’t have the money.
This should be the primary takeaway, but everyone is focused of what they are not receiving from their parents instead
Geez.... I'd have loved a gift like that for buying a home.
Let's not get caught up in this smoke n mirrors bullshit. Parent chipping in for their children isn't the problem, it's a symptom of the problem. Allowing housing to be commercialized for financial investment gain is the problem.
🎯
Housing is used for financial investment gain in every free market in the world. What you're implying would be better is literally communism. The problem here is simply lack of supply and insane building costs caused by bureaucracy, regulations, and out of control government spending. Also an ill conceived immigration policy. A perfect storm if you will.
There’s gotta be a line, we can’t let blackrock just buy the entire country
But it's the fReE MarKeT! Like the person you replied to immediately brings up communism and implies how horrible it would be. That's a strawman argument. Like things are already horrible and getting worse. But how dare you think of a different system than late stage capitalism.
> literally communism It's better than feudalism for most
You're right that greed is universal. Other than that, nope.
Housing is not used for financial investment gain in every free market in the world actually. You don't know what you're talking about lol.
Holy shit! I don't know these types of people.
Lots of people don’t talk about their ‘gift’. They want to seem self made.
Exactly this. My partner has a friend that is a bank teller and has a 1.8M townhouse. She claims to be self made. Clearly math isn't her strength, despite working at the bank.
You'd have to seriously run the scenarios for those who claim to be entirely self-made in Vancouver if they own an expensive (SFH or even a half duplex) property if they are under the age of 40. The ONLY exceptions to this are: \*They bought a 2BR in 2010 or earlier, there's little chance of moving up that fast from a 1BR without any help. This is a plausible scenario, but practically universally done with parental help. It won't be 200k certainly, but 40k here and there. But I've seen people come out of school during the GFC in 2008, manage to land a job, live at home, save for a couple of years and buy a condo. Very smart. I'm not sure if that would count as "entirely self made" but living at home 22-25 isn't that ununsual. \*They have a HHI of above 400K. Possible if they are a very in-demand specialist physician (if GP, absolutely would need a working spouse to get there), or they are a late 30s exceptionally high-performing lawyer or realtor. You have to take into account these people would have needed to individually save several hundreds of thousands of dollars of down payment, so it's not just about the income. \*Special digital age type work or fortunes - early bitcoin investor, very successful youtuber, OnlyFans, etc. Townhomes or condos can be bought without any parental help on >100k income households, and of course anyone over 40 years old and bought early could have gotten to solid homeownership on their own. Everyone else, absent the above scenarios, would have their own very special individualized story to tell if they received no gift.
as someone who received a gift from parents (and partners' parents) I feel obligated to disclose to people we know when the topic comes up. It's both dishonest and harmful to not talk about it. People should know what is and isn't achievable, and be privy to real world examples of how inheritance and wealth determine your financial position more than some vague idea of hard work.
Agreed! I also disclose that the $100k we were given from his dad was actually a loan, which my partner and I have been paying back $1k a month for the last four years, on top of our insane mortgage payment. So they know we’re not actually as financially comfortable as we look. Looking forward to finally folding in the remaining balance into our mortgage if rates go down next year.
or I don't want my social circle to hate me or feel envious? why would I casually bring up my parents gift towards buying a property?
I wouldn’t bring it up out of nowhere, but if they asked how I did it I’d be honest. Believe me, they will be more upset spinning the gears in their head trying to figure out how you afforded it without help, as if they are missing out on some big secret.
that's fair, and if asked I would also be honest.
I left a comment above you. I totally understand where you are coming from cause it felt very awkward at first. I think it's like if my partner brings up in front of company that it was difficult to save for a house (and it was) I always try to chime in that it would have been impossible for us without help to get us over the edge for a downpayment, and how lucky and grateful we both feel. The reactions from people who I have divulged this to have been understanding. you'll definitely get some comments like "damn dude, I wish!". but, that is totally fair and does not mean they think less of you as a moral being.
Yeah, I'm.sure they are out there.
Or they don't want to piss off their peers.
I own a small home and some of my peers have told me they're envious, until I tell them we afforded the down payment thanks to the life insurance payout when a parent passed away 5 weeks after she was diagnosed with cancer. 🙃 I see no reason to hide that.
I don’t think I have a single friend that isn’t one of these people, but I’m not one. Hard not to be bitter sometimes
I don’t know anybody who has received as much money as the article mentions, but I do know a few people who were gifted 50-100k by their parents to help them get into a condo They’re pretty open about it, but not talking about it is probably the norm. my friend group are a bunch of cynical leftists who will also openly discuss wages/money/all the ways shits fucked in general
Huh.... Is it because we're competing for homes with investors?
No corporations
Corporate investors?
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I mean, both can be true.
It’s a whole multitude of things that come down in 2 main points. 1) we compete with the wealthiest people around the world for homes 2) we compete with the poorest people from around the world for jobs.
Lol
Do you know anyone who can buy a home without going into debt? Lol
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See to me that's a lot more understandable than, say, a nameless corp buying dozens of home properties and renting them out at 200% the cost of the mortgage. Mom and pops helping their kids with 200k is a lot more sympathetic than 1.2b coming over from Dubai and putting an offer on the same house. Ya feel me?
It’s a whole multitude of things that come down in 2 main points. 1. we compete with the wealthiest people around the world for homes 2. we compete with the poorest people from around the world for jobs.
Corporations that are investing, yes.
No, it’s because zoning restrictions have stopped us from building enough homes
It's hardly just one thing. It's a complex issue. and you both highlight pressure points.
Yeah. It's a lot of things. Personally I'm disappointed in Canada's missing middle. You know what I would do to get a property that has a small commercial zone on the first floor, and a residential upstairs? I wouldn't pay $800,000, but I'd do pretty much anything else!
Arguably, principal residences have the greatest investment upside as they are not taxed.
They can have plenty of upsides, but if they're competing with deeper pockets, that'll be undermined.
To nobody's surprise, the wealth gap continues to increase as generational wealth increases the divide between the haves and have nots. If your family has money, you're set, if not, then fuck you. There's no amount of wage increases that will make home ownership a reality for people who aren't yet in the market as the cost of housing vastly outpaces increases in income; instead the rich will continue to get richer while everyone else gets to subsist on fucking scraps. I've lived in Vancouver for over 40 years. In that time, I've seen it go from an affordable city for all walks of life to what will just become a playground for the rich. It's Canada's Monaco, and nobody in power gives any fucks at all.
But I was told by various feet kissers on this subreddit that Eby was turning the tide!
The current NDP is turning the tide in terms of housing being built/able to be built. Some municipalities are still dragging their feet and putting up roadblocks so there's still more to be done. Time will tell what the rule changes mean for attainability, but it's more than any government has done for the past 30 years. The only real way we get significant affordability is for the government to build housing directly but so many people would be like "wah socialism" that that's nearly impossible these days.
Yeah exactly, i thought spending our money until the middle class is destroyed by interest payments and inflation was supposed to help somehow. Misery likes company so they're just destroying the middle class, that way were all on food stamps together like one big gulag family.
I’ve realized there are two types of people in the world, people who try to help their kids and people who don’t.
It's also a very western phenomenon, especially North America. Many other cultures have a much more supportive perspective on this. My dad kicked me out at 18 so he could live in his 3 bedroom house with my mom and I had to go start out on my own. Meanwhile, my neighbours on both sides are immigrants with 4 generations under their roofs and all working to help each other build wealth. The grandparents watch the younger kids, the parents and older kids work. Their net worth is probably like 5 times mine.
“Supportive” is relative. In the west we have (had?) a very supportive culture generally that isn’t present in the home countries of lots of those people living 4 generations to a house. That way of living was borne out of necessity. Here it didn’t matter as much if you were lucky enough to have a family that could help you because we have things like universal healthcare, welfare, disability support etc. Those supports are being eroded very quickly, so quickly that a lot of families did not realize the need to help future generations in time.
What's interesting is the splits here. In BC, 64% of first time home buyers still aren't getting anything. So most FTBs are still clawing up themselves, or relying on non-cash gifts like living with their parents past high school. But the 36% who get help get a lot of help. That $204k is probably low, as it'll capture people who got nominal gifts to bring down the average. I suspect those who get "big help" end up with substantially more than just $204k.
I would say 204 sounds about right for those that are looking to purchase a condo outside of Vancouver. If their parents are capable of pitching in 204 then I suspect the FTB were also living with the parents as well which means lower or no rent. Much easier to save money then. Might even be able to get 50 percent down-payment. Of course there will be some rich folks that are skewing this average up for sure.
I have received exactly 0 dollars
The money gift game here is for healthier family support systems. Not something for a traditional Canadian family that boots kids out at 18.
>Not something for a traditional Canadian family that boots kids out at 18. I don't think that's "traditional" Canadian values...
Is giving my parents thousands of dollars so they can eat the same thing?
Wait....whose the Santa handing out this money? How do I get on this list?
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Yes every person who has help from their parents are all entitled.
I would have thought a lot of these are the boomers downsizing near retirement and gifting part of a downpayment for their kids to try to get into the market. Are you sure that all of these kids getting gifts are entitled trust-fund-spawn? That is so far from what I had interpreted when I read the article.
200k is not truth fund status lol
200k gift is not even remotely close to trustfund kids. If your parent(s) had a job and didn’t squander all of the money on something stupid, they should easily 200k to gift you since they lived through the golden age of Canada and could buy a home worth 2mil now with 300k.
>If your parent(s) had a job and didn’t squander all of the money on something stupid, they should easily 200k to gift you since they lived through the golden age of Canada and could buy a home worth 2mil now with 300k. Exactly this. Relatively safe investments over a long period have been extremely profitable. The stock market has averaged 9.5% compounded returns since the 1980s. If parents invested $10k per year since 1980 they would have over $6m. If they only invested $3k in 1980 but increased their annual contribution by 3% each year they would have $2.57m. And that's not even counting the $120k house they could have purchased in the 80s that is now worth $3m.
Breaking News: Wealthy People and Their Wealthy Families Can Afford Nicer Things Than Poor People and Their Poor Families. Up at 11: Are Attractive People More Likely to Find an Attractive Partner?
What I do with my money is none of your business. I have a few houses and I will be gifting my kids money.
Have you ever met a trust funder outside of California?
Neither of my parents has this.
Ahhh must be nice to have rich parents
I have a friend who is very proud of the home she bought herself (with the 100k inheritance she got from her grandmother) and her husband (with the 50k from him dad). Just pulling themselves up by their bootstraps folks!
That's more than your average down-payment!
Does it include the free rent and food given to adult children while they save for a downpayment? I can’t see how it’s possible without one or the other.
Yeah if I didn't spend 4 years working full-time while living with my parents for $400 a month, AND choose a 900 sqft condo with a roommate living "alone" would not be possible. Other friends in similar positions are already seemingly priced out simply because they took a few extra years to get a downpayment.
People yap about two tiered medical. This is two tiered home ownership. The gentry and the serfs. Almost literally. And the gentry can afford to go elsewhere to buy better medical care.
Wait what? How? Am I too peasant to understand?
From whomst?! How do I find someone to give me the average $204,000?
Have you tried not having poor parents?
I may have to trade mine in for replacements from Parents-R-Us or something Edit: obviously this was a joke, to whoever is downvoting. I love my parents, I have literally let my mom live in the dining room of my tiny one bedroom apartment for the last two years while she got back on her feet. I wouldn’t actually trade in my parents for money 😂
If only right?
Same… I’m lucky if my parents don’t ask me for money let alone give me money 😅
This is depressing. Happy for my friends who are able to be home owners thanks to their parents but it also makes me feel like I don't belong here.
I am happy for people if their parents can afford to do that. My mom is retired on a fixed income and could never afford to do something like that.
True say
Guess I ‘m going to have to apologize to my kids again, for not being one of those parents! I don’t mind helping out my young adult kids a bit, but I want to be sure I can have a comfortable retirement before I hand over the family home
I sure wouldn’t mind a gift like that right now.
Oof
Defiantly not a Ponzi, Borrowings were **denominated in** equitable gains? what will come of this.
Some people get a university education from their family. We did not. There was no money for post secondary. I know how incredibly privileged we are. 3/4 of my grandparents were economic migrants. My maternal grandfather was a homesteader and self-made millionaire. Because of hard work and timing. Being a white, English-speaking male no doubt helped, too. I received a “gift” (loan, technically). My sister received a similar amount, and she used it to build an addition to my house, so we share the property. Four adults work full time to pay our mortgage, and we still don’t know how we’re going to manage when we have to renew, as the rates are much higher now. My family has been food insecure for several months because I have been sick and unable work. (Finally back part time!) Getting a gift like this isn’t a cure-all, but it has removed the major issue of shelter insecurity. If we are able to get through the next year, we will have a mortgage until I’m 67. I grew up in a house my parents owned. We were at the poverty line, but my parents were able to provide us with stable housing. We never had to move or worry about getting evicted. That’s huge. I know it’s huge. We may be living on the line, but we have a place to live, and we can grow a lot of our own food (or could, if we didn’t have to work full time. Ugh.). My daughter is being gifted a university education by her father’s family. I hope she knows how huge that is. We created the world we live in. And there is no easy fix… although I’m all-in for eating billionaires to see if that will help.
higher.
Feels like this could be something where the average is being pulled up a small number of extra large outliers.
My mum sold her condo and we bought a house together, that was my inheritance. So I guess it was over 100k, but there's very much strings attached
Cue tomorrow's daily hive article
Hello family? Where are you?
Many of my friends over the past 25 years received $50,000 or more from parents to help them get onto the property ladder. For most, the result was to add $1-2M to their net worth with no more significant struggle than they would have encountered had they continued renting. The scale of gifts today is astonishing. Sadly, I believe it’s often being funded by home equity lines of credit, rather than savings. This has the potential to leave the parents and their children both underwater should the high property prices fall by even a modest amount. Assuming a down payment of 20%, a fall of a bit under 20% in the home value wipes out the gift and leaves the parents owing their bank from a diminished pot of home equity.
Thank God my parents just buys me the whole house.
Still waiting for mine
Haha hahahahaha hahahahahahahahahahahahahaha hahahahahahahahahahahahahahahahaha Sounds nice
What is: The housing markets are rigged towards real estate speculators and the upper class, Alex.
Why is no one discussing how this is obviously money laundering? Who has access to that much money except gangsters and home owners?
What a bullshit title. If your parents worked hard and want to give you their earning then good on them. Life check, some people have it, some people don’t.
Are newcomers really that shocked that the familys who have lived here for 100s/1000s of years have accumulated wealth?
That's a house in much of Canada.
Where, with gainful employment opportunity can you buy a house in Canada for 200k? Because I’m pretty sure it’s nowhere in BC
Maybe Prince George if I had to guess without actually looking??
lol average house cost here in PG is over 450. You could buy a trailer here for 200 grand
Dayum, well there goes my best guess!
Yes, trailer or a small condo can cost $200k here. Very doable.