Buying a House for (with?) Your Child

Are you considering buying a house for your child? Or maybe helping finance the purchase with a loan or gift? We have so many questions for you. Are you planning on taking a note back, secured by an interest in the house? Or maybe jointly owning it? And what effect will either of those choices have on your own credit rating, income, and taxes? Not the least important question: how will buying a house for one of your heirs affect your estate planning for the others? Will the house be treated as an advance on their inheritance? What about gain in value of “their” house between now and your death? If you buy it in your own name, can they afford to “buy” it back from your estate (by paying off their siblings’ interests, for example)? And at what price. We discuss these and other questions about the idea of buying a house for one of your children. We think your gesture is generous, and we hope they appreciate it. But there are complications.