“We’re planning to give each of our kids down payments to buy homes. One lives in California and one’s in Tennessee. So the housing markets are really different. How can we handle this in a way that makes sense, especially when it comes to taxes and family dynamics?”
This is a great (and tricky) question—because it’s not just about the money. It’s also about fairness, expectations, and the conversations that come with transferring wealth across generations.
Equal Money vs. Equal Outcomes
The most common approach we see is a simple one: give each child the same dollar amount. What they do with it is up to them. If one uses it as a 2% down payment on a large home and the other uses it as 20% down on a more modest place, that’s their choice.
But it gets complicated if your goal is equal outcomes—for example, if you want each child to have a 20% down payment or a similarly sized home. That’s much harder to pull off when one lives in California and the other in Tennessee. The numbers just don’t match up.
This is where family dynamics come into play. If one child receives a $1 million down payment and the other receives $200,000, it can feel unfair—even if both homes are the same size in their respective markets. In these cases, it’s important to clearly define your goal. Are you trying to give equal value in terms of homeownership experience, or equal dollar gifts?
What’s “Fair” Might Not Be “Equal”
There’s no single right answer here—but being clear and intentional goes a long way. If your goal is to provide equal housing opportunities, then explain that to your children and consider documenting that intent. If your goal is to provide equal financial gifts, say that instead.
And remember: fair doesn’t always mean equal in dollar terms.
Plan Ahead to Avoid Gift Tax Surprises
The other big issue is taxes. If you suddenly write a $200,000 check to a child for a down payment, you may exceed the annual gift tax exclusion, which in 2025 is $19,000 per recipient, or $38,000 for a couple.
To avoid this, start early. If you know a down payment is in your future, consider giving $38,000 per year over several years. Those gifts can accumulate in a savings or brokerage account until the child is ready to buy. This not only spreads out the tax impact—it also gives you more time to talk about expectations.
You Can Equalize Through the Estate
Another way to level the playing field is through your estate plan. If one child needs a larger down payment now, you can account for that later by reducing their share of your estate by the same amount. That way, both needs are met—and both children can eventually receive equal total support.
It’s not the cleanest solution, but it’s one way to balance different situations without making one child feel shortchanged.
The Bottom Line
Whether you’re gifting down payments, Roth IRAs, or business shares, family dynamics and tax rules are always part of the equation. The key is to define your goals clearly, communicate them early, and plan ahead—so that your gift creates opportunity, not tension.
For more on planning gifts and managing family dynamics, listen to the full podcast episode here.