Posted on: 19th Jul, 2009 02:58 pm
What is a Gift of Equity and what are the advantages?
Hi,
If you purchase a property at a price less than the actual sale price because the seller has offered to pay a certain part or entire amount of down payment as gift, the gifted amount is known as gift of equity. The primary advantage of the gift of equity is that the buyer doesn't have to make the entire amount of the down payment out of his own pocket.
If you purchase a property at a price less than the actual sale price because the seller has offered to pay a certain part or entire amount of down payment as gift, the gifted amount is known as gift of equity. The primary advantage of the gift of equity is that the buyer doesn't have to make the entire amount of the down payment out of his own pocket.
Does the one who accepted the gift equity have to pay tax on this gift equity??
Something that is important to note...
You need to have a previous relationship with the seller (ie parent, relative, etc).
You need to have a previous relationship with the seller (ie parent, relative, etc).
