Gifted Down Payments in Burnaby: Lender Rules and Paperwork (2026)

Close to half of the first-time buyers I work with in Burnaby are getting some help with their down payment, usually from parents. The first question is almost always the same: is this allowed, and will it cause problems with the mortgage?

Yes, and no, as long as it's done the way lenders expect. Here's how it works.

What a gifted down payment is

A gifted down payment is money you receive from someone else with no expectation of paying it back and no ownership claim on the property in return. That second part matters. The moment there's a repayment plan or a promise of a share in the home, it stops being a gift to a lender and becomes an undisclosed debt, which can sink your approval. You also can't borrow your down payment from a line of credit and call it your own money.

Per CMHC's general requirements for mortgage loan insurance, a traditional down payment can come from savings, the sale of a property, or a non-repayable financial gift from a relative. The gift also has to be arm's length: it can't be tied back to the sale itself, such as a seller quietly "gifting" part of the price back to the buyer.

Who can give the gift

There's no law in Canada limiting gifts to family members, but most lenders and mortgage insurers restrict it to immediate family: parents, grandparents, siblings, and sometimes a spouse or legal guardian. Money from an aunt, a friend, or anyone outside that circle triggers extra questions about the relationship and the source of funds. If your donor isn't an immediate relative, talk to your broker before the money moves.

The gift letter

Every lender I've worked with wants a signed gift letter before the funds count. It needs to cover:

• The donor's name and relationship to you
• The exact amount being gifted
• A clear statement that it's a gift, not a loan
• Confirmation the donor has no ownership stake and expects no repayment
• The donor's contact information, often with a witnessed or notarized signature

Use your broker's standard template rather than writing your own. Leaving out the "non-repayable" language is a common reason underwriters send a file back for clarification.

Proving it's a real gift, and how long it should sit

The letter alone isn't usually enough. Lenders also want a paper trail: a bank statement or transfer record showing the money moving from the donor's account into yours, matching the letter. If the donor's own funds came from an unusual recent deposit, expect the lender to ask where that came from too. This is standard anti-money-laundering practice, nothing unique to your file. What lenders really want to rule out is a hidden loan dressed up as a gift. A private side agreement to repay it changes your real debt load, and hiding that from your lender is mortgage fraud, not a shortcut.

Gifted funds also need time to season. Most lenders want the money sitting in your account for a stretch before closing, not landing the week of subject removal. The exact window varies by lender, so confirm it with your broker, and build in extra time if the donor lives outside Canada. The safest approach: have the family conversation early, get the letter signed, and move the funds before you're deep into offer negotiations.

Does Canada tax gifted money?

No. Canada has no gift tax, and a cash gift isn't taxable income for the person who receives it. You don't report it on your tax return, and there's no dollar limit on what a parent or grandparent can give you.

It gets more complicated if the gift isn't simple cash, or the money gets invested afterward. Gifting property or shares instead of cash can trigger tax consequences for the donor, since transferring an asset can count as a deemed disposition on their side. And if gifted money is later invested and earns interest or dividends, especially when given to a spouse or a child under 18, that income can be attributed back to the donor under CRA's attribution rules. None of this changes how the gift works at the lender level, but it's what your accountant should review before the money moves.

What I tell my buyers

Family help with a down payment is common in Burnaby, given how far home prices have outpaced wages, and there's nothing wrong with using it. My advice is the same every time: loop in your mortgage broker as soon as the idea comes up, not after you've found a place. If the gift is anything other than straightforward cash from a parent, bring your accountant into that conversation too, so the donor understands their own tax position first.

I'm not a mortgage broker or an accountant, and none of this is lending or tax advice for your situation. What I can do is walk you through the buying timeline, including where a gifted down payment fits against your offer and subject removal. Run the numbers on my mortgage calculator, and if you're house-hunting somewhere like Metrotown, I can talk you through realistic price ranges there too.

Key Takeaways

• A gifted down payment must be non-repayable, with no ownership claim by the donor. Borrowed money no longer counts as your own funds.
• Most lenders limit gifts to immediate family, per CMHC's general mortgage loan insurance requirements.
• You'll need a signed gift letter plus a bank record showing the funds actually moved.
• Lenders want the funds sitting in your account for a period before closing. Confirm the window with your broker, and add time for funds from outside Canada.
• Canada has no gift tax on cash for the recipient, but gifted property or investment income can carry tax consequences for the donor. Confirm with an accountant.

Frequently Asked Questions

Can my parents gift me my entire down payment in Burnaby?

In many cases, yes. Under CMHC's insured mortgage rules, a non-repayable gift from a relative is an accepted source and can cover all or part of your down payment, depending on the lender and program. Confirm specifics with your broker before writing an offer.

Do I have to pay tax on a gifted down payment?

No. Canada has no gift tax, and cash gifts aren't taxable income for the recipient, regardless of amount. Taxes can enter the picture on the donor's side if they gift an asset other than cash, or if the money is later invested and earns income. An accountant can walk through your situation.

What documents does my lender need for a gifted down payment?

A signed gift letter naming the donor, the relationship, the amount, and a non-repayable statement, plus a bank record showing the money landing in your account. Your broker will supply the lender's standard template.

Can a friend gift me a down payment instead of a family member?

It depends on the lender and mortgage insurer. Some allow gifts from outside immediate family but require extra proof of the relationship and the source of funds. If your donor isn't an immediate relative, talk to your broker early so the file is structured correctly.

Sources

• CMHC: General requirements to qualify for homeowner mortgage loan insurance: accepted down payment sources.
• NerdWallet Canada: Using Gift Money as a Mortgage Down Payment: gift letter contents and donor relationships.
• TurboTax Canada: Is There a Gift Tax in Canada?: gift tax rules and attribution.

---

If your family is thinking through a gifted down payment for a Burnaby home, I'm happy to walk through how the timeline fits with your offer. Start with a no-obligation valuation if you're selling to help fund the gift, or reach out directly to talk it through. You can also call or text me at 778-991-0051.

Jersey Li, The Apartment Guy® · Medallion Club Member (Top 10% REALTOR®, 2024 & 2025) · Jersey Li Personal Real Estate Corporation, Sutton Group - 1st West Realty.