The current economic landscape can be challenging for young Canadians to navigate as they face great uncertainty with heightened interest rates and inflation. It can be frustrating as they are just starting to build their career, considering buying a home or starting a family. If you are a parent, you may be thinking about how you can help your child during this period. A Reverse Mortgage is a sound financial solution that can help you support your loved ones by providing a tax-free gift.

The Gift of Early Inheritance 

As a parent, you may want to provide an early inheritance to see your adult children use the funds to improve their lives in a time of need. By giving an early inheritance, you can avoid probate fees (estate administration tax) and save money by bringing you to a lower tax bracket*. With an early inheritance, your children can pay for their wedding, start a business, pay off student loans, make a down payment on their home, and much more. Speak to your tax specialist for more details.

How a Reverse Mortgage Works

You may have heard of people using a home equity line of credit (HELOC) or liquidating their investments to gift an early inheritance. However, there are disadvantages associated with loss of earnings or tax payable when it is time to sell their investments. A Reverse Mortgage allows you to unlock up to 55% of the equity in your home without any of these challenges. With a Reverse Mortgage, your investments remain intact, and no monthly mortgage payments are required. Therefore, your income is not affected, and best of all, the money you get from the Reverse Mortgage is tax-free!

If you want to provide a tax-free gift to your children, please book a time for a discovery call and I can help guide you through how a Reverse Mortgage can help you.

*Reverse Mortgages require all clients to receive independent legal advice to review the mortgage contract and ensure they fully understand the terms and conditions.