Should you buy your child a home before they even hit high school? Here’s what Canadian parents need to know to make a plan

A family in Australia recently paid more than US$500,000 (C$685,000) for a two-bedroom apartment they plan to eventually hand over to their child.

"They're scared that one day, their 5-year-old or 10-year-old will have to buy a home and they'll be out of the market," real estate agent Thomas Bale told Australian Financial Review (1).

It's a new strategy that reaches far beyond Australia. In Canada, where entering the housing market has challenged the late millennial generation, the fear of being permanently priced out is pushing some parents to act much earlier than any previous generation could have imagined.

Why parents are buying properties for their kids

The "Bank of Mom and Dad" isn't a new concept — but it's evolving. It used to mean helping an adult child pull together a down payment. Now, for some families, it means buying the home outright, years before the child can legally own it.

A Statistics Canada study found that people born in the 1990s are twice as likely to own a home if their parents are homeowners, compared to those whose parents aren't (2). For children of parents who own multiple properties, the odds nearly triple. The study concluded that "inequality of homeownership appears to be reproduced across generations" — a sign of how deeply parental wealth influences access to the market for younger generations.

That data reflects a housing market that's become increasingly difficult for younger Canadians to enter on their own. According to the Canada Mortgage and Housing Corporation (CMHC), Canada's national average home price sat at approximately C$673,084 as of April 17, 2026 (3).

And while prices have eased somewhat over a 12 month span, the national benchmark home price fell to C$661,300 in February 2026, down 4.8% year-over-year, according to the Canadian Real Estate Association (CREA) (4). These numbers show affordability remains a structural challenge, rather than a temporary blip.

First-time buyers: Older than ever

For parents anxiously watching the market, the data on first-time buyers may be the nudge the need to act.

In Ontario, the median age of first-time homebuyers has climbed from 36 in 2014 to 40 in 2024, Ontario Housing Market reveals (5). The report describes this shift as "a testament to the likely effects of the affordability challenges in the Ontario housing market."

The picture is even more stark in Canada's most expensive cities. A 2025 global affordability study cited by Canadian Mortgage Trends estimated that the typical first-time buyer in Vancouver now enters the market around age 46, which far later than in the past (6). In Toronto and Montreal, the ages are approximately 40 and 39, respectively. The study placed Vancouver, Toronto and Montreal among the least affordable cities for young buyers in a 70-city global index.

This trend toward later entry has clear trickle-down effects. The CMHC's 2025 Mortgage Consumer Survey found first-time buyers who are older than 35 accounted for 39% of purchases in 2025 — up from 33% in 2024 and 30% in 2023 (7).

For parents who bought in earlier when home prices were within reach, watching their children face these conditions creates a powerful emotional and financial motivation to offer support.

The 'Bank of Mom and Dad' is writing bigger cheques

As housing has become less affordable, more parents are stepping in to help, and they're contributing financially now more than ever.

A report by the Canadian Imperial Bank of Commerce (CIBC) found that just over 30% of first-time homebuyers received a monetary gift from their parents — up from 20% in 2015 (8). A 2022 survey by the Ontario Real Estate Association found that roughly 40% of young home purchasers got financial help from their parents, either as a cash gift averaging C$73,605 or a co-signed down payment loan averaging C$40,878 (9).

But for the Australian, or parents with sufficient capital, buying investment properties outright and holding them in trust for children who may be years away from adulthood may seem like the most logical move.

As Bale explained about his clients, many parents aren't thinking purely like investors. They're choosing homes they can picture their children living in one day — often close to their own neighbourhoods.

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The pros and cons of buying early

For families who have the finances, buying property years in advance carries real potential advantages.

Real estate has historically been one of the primary ways to build wealth in Canada, and a longer holding period gives more time for properties to appreciate. Some key benefits include:

• Mortgage payments acting as a form of forced savings, helping build equity
• Housing security — giving your child a place to live and hedging against future affordability pressures
• The option to rent out the property and generate income while it gains value

Despite the upsides, real estate markets can shift, and buying too early or in the wrong location could limit your returns.

As Bale noted, one client bought a home for their child — only to move away later, making the investment less practical. Other potential drawbacks include:

• High upfront costs and ongoing expenses, including property taxes, maintenance and insurance
• Less liquidity, since capital is tied up in property
• Uncertainty about where your child will ultimately want to live
• Budget strain if unexpected expenses arise

What Canadian parents need to know before buying a home for their child

Income attribution rules

If you buy a property and put it in a minor child's name, or generate rental income from a property held for a child's benefit, the Canada Revenue Agency (CRA) will attribute that rental income back to you under subsection 74.1 (2) of the Income Tax Act (10). This means any rent the property earns before the child turns 18 is taxed as your income — not theirs.

Note: Capital gains on the property aren't subject to attribution for minor children, which is crucial when it comes to long-term planning.

Deemed disposition and capital gains tax

If you transfer a property to your child — or eventually gift it to them — the CRA treats this as a deemed disposition at fair market value (FMV), even if no money changes hands (11). If the property has appreciated since you bought it, you'll owe capital gains tax on the increase in value. Under current rules, 50% of capital gains up to $250,000 are included in your taxable income. For anything above that threshold, the inclusion rate rises under proposed federal legislation.

The principal residence exemption can eliminate this tax — but only if the property qualifies as your principal residence, which it generally won't if it's being rented out or held as an investment.

Land transfer tax

In most provinces, transferring a property to a child — even as a gift — will trigger land transfer tax based on the FMV of the property at the time of transfer (12). Ontario, for example, levies land transfer tax at progressive rates: On a $1 million home in Toronto, the combined provincial and municipal land transfer tax can total approximately $32,950.

Holding title

In Canada, a minor child generally can't hold title to real estate. Parents typically need to either hold the property themselves, or use a trust structure — which gets more legally complex and adds up in costs. You'll need to work with a real estate lawyer or notary to set up a trust.

Double taxation risk