A parents’ guide to home down payment gifts and loans + MORE Aug 20th

With a new school year here and academic fees due soon, you might be budgeting for the next eight months and planning a withdrawal from your registered education savings plan (RESP). While an RESP is the best way to save for just about any post-secondary education—more on that shortly—there are some good-to-know rules to help maximize your savings, protect grants, avoid penalties, and understand tax implications to make informed decisions about accessing funds for school. Here is your 101 guide to RESP withdrawal rules. 

How to pay for school and have a life—a guide for students and parents
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The perks of having an RESP

The RESP was first introduced in 1974 as a tax-deferred savings vehicle for a child’s post-secondary education. While it’s typical for parents to open an RESP for their children, anyone can open one for any child, and anyone can contribute to the account. When it comes to RESPs, three key terms to know are “the subscriber” (typically the parents or a guardian), “the beneficiary” (the child), and “the provider” or “promoter,” the account-holding financial institution or professional…

It used to be that parents budgeted for post-secondary education or contributing to the costs of a child’s wedding. But now, I am increasingly finding parents planning for home down payment gifts.

The statistics support this and show an increase in down payment help in recent years. A CIBC study from June 2024 found that 31% of first-time home buyers received financial support from family, an increase from 20% in 2015. Financial support currently averages $115,000.

I encourage parents to be careful about gifting too much too early to their children. Being overly generous can discourage your children from making their own way in life.

There’s also a risk that you might need that money someday to fund your retirement, including long-term care costs. Your child could also have a relationship breakdown, which may mean that your gift does not stay in the family.

How to keep the money safe

A gift or inheritance received during a marriage may be exempt from division upon a relationship breakdown…

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