Navigating Home Buying Support for Your Children: A Broadridge Financial Solutions Employee's Guide to Avoiding Tax Pitfalls in California

Broadridge Financial Solutions employees, especially those nearing retirement, should consider utilizing tax-efficient methods such as gifts, loans, or co-signing arrangements to support their children's home purchases in California’s competitive real estate market, while also staying mindful of changing IRS guidelines that could affect long-term financial goals. – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.

Broadridge Financial Solutions employees should evaluate the long-term financial impact of helping their children buy property, considering the tax implications of gifts, loans, and co-signing, while also ensuring these strategies align with their retirement plans and estate goals. – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. The impact of California’s real estate market on financial planning – How market trends, tax laws, and family financial strategies influence home ownership.

2. Strategies for assisting children in purchasing a home – Exploring various financial methods, such as gifting, co-signing, and investment properties.

3. Tax implications and legal considerations – Understanding IRS guidelines, gift tax exclusions, and estate planning factors when supporting home purchases.

The real estate market in California is complicated but reflects broad trends that affect many, including Broadridge Financial Solutions employees considering long-term financial planning and intergenerational wealth transfer. Understand tax law, real estate laws and family finance strategies. This guide examines how families negotiate home purchases - from financial, tax and legal points of view.

A hot market with high property costs, the Bay Area often sees first-time buyers Tommy Ufland and Tori Olsen pass on all-cash offers despite being prepared. So eventually Ufland and Olsen purchased a condo from Olsen's relatives at market price.

In California, relatives typically help first-time buyers - about 27% of purchasers in 2024 received such aid - down from 34% in 2023.

Real estate professionals estimate this could rise to 50% in highly competitive markets like the Bay Area.

Family members often give gifts to help with property purchases, even if the gifts are tax-impacted. According to 2025 Internal Revenue Service guidelines, for example, someone could gift USD 19,000 per person annually without paying gift taxes.

Therefore, a couple may jointly give USD 38,000 to their child and spouse with no immediate tax consequences, but this reduces their lifetime gift and estate tax exemption and may require a gift tax return for amounts above this amount.

There are various strategies that parents can use to help their children buy real estate - each with benefits and drawbacks:

1. Down Payment Direct Gift: This is a simple one - parents gift the down payment so the money can be used as intended and no more financial problems arise.

2. Down Payment via Parental Loan: This involves lending the down payment to the child in a formal agreement with interest at or above the federal rate, not a gift.

3. Co-signing a Mortgage: This may help children get better loan terms but puts the parents in a position to be financially liable if the child defaults.

4. Purchasing Outright for Cash: Some affluent parents buy a home outright and let their children refinance into a conventional mortgage later on, giving them ownership back.

5. Investment/Rental Properties: This option allows parents flexibility in financial arrangement and tax considerations as parents buy a property as an investment and rent it to their child under standard tenant agreements or as a second home.

6. Joint Ownership: Parents and children can buy property together in legally defined ownership shares and responsibilities, controlling and financing input but with specific legal structuring.

7. Selling a Family Home: Parents may sell their home to their child below market value to save on transaction fees and get the child familiar with the property, but this may increase property and gift taxes.

Every method involves particular taxes, legal rights and financial responsibilities that should be considered and discussed with legal and financial professionals. Picking one depends on the family's financial picture, the real estate market and long-term financial goals of parents and children.

And they reflect broader economic and fiscal conditions that may affect investment strategies and purchasing power, such as changes in IRS rules or market movements that may affect the outcomes of each approach.

Understanding such methods as well as their consequences allows sound decisions in the context of short- and long-term financial realities and health. Professional guidance can explain these options and assist in achieving financial goals and ensuring regulatory compliance.

The SECURE Act 2.0 passed in December 2022 is big news for Broadridge Financial Solutions employees approaching retirement. It affects retirement and tax planning by raising the age of required minimum distributions and allowing penalty-free withdrawals for first-homebuyer down payments - and will affect financial planning for children's real estate goals.

Help your grown children buy a home in California while handling tax considerations. This article details strategies to limit gift tax consequences and maximize financial results, including co-signing mortgages, parental loans and direct gifts. Understanding relevant federal rates and IRS rules helps Broadridge Financial Solutions employees structure transactions to help family members in California's competitive real estate market.

Helping your adult child buy a home in California tax-efficiently involves understanding tax regulations, mortgage details and financial strategies. Everything from using IRS gift exclusions to choosing the right loan or co-signing arrangement must be in line with financial and legal objectives.

Five different sources are listed below with a 100-word explanation of how the source benefits retirees, supports the arguments made, the author name, publication date and references to pages cited.

Articles you may find interesting:

.Sources:

1. Internal Revenue Service.   Estate and Gift Tax FAQs.  IRS, Sept. 2024.

2. Zillow.   California Housing Market: 2025 Home Prices & Trends.  Mar. 2025.

3. NerdWallet Staff.   Gift Tax: 2024 and 2025 Annual and Lifetime Limits.  NerdWallet, Feb. 2025.

4. Redfin.   California Housing Market: House Prices & Trends.  Feb. 2025.

5. Internal Revenue Service.   Frequently Asked Questions on Gift Taxes.  IRS, 28 Oct. 2024.