Taxes for buyers · IRS gift taxDown payment gifts and gift tax: who files, who pays
When a parent or relative gives a buyer money for the down payment, the gift tax rules apply to the person giving it – not to the buyer. The donor is generally responsible for paying any gift tax; the recipient may have to pay only if the donor does not. For gifts made in 2026, the annual exclusion is $19,000 per recipient: a donor can give up to that amount to each person without filing anything, and two spouses can each give $19,000 to the same person. A U.S. donor who gives one person more than $19,000 in the year (other than a spouse) generally must file Form 709, the gift tax return, by April 15 of the following year – but filing does not usually mean paying. The amount above the annual exclusion counts against the donor's basic exclusion amount, which the IRS lists as $15,000,000 for 2026; tax is due only when lifetime taxable gifts exceed it. Spouses cannot file a joint gift tax return – each files their own – and a gift of community property or jointly owned money is treated as made half by each spouse, so each may need to file. Paying tuition or medical bills directly is excluded separately. The mortgage lender, meanwhile, needs its own paperwork: a gift letter and proof of the transfer.
The numbers for 2026
$19,000
Annual exclusion per recipient, per donor – no return needed at or below it.
$38,000
Two spouses, each giving $19,000 to the same person.
Form 709
Due April 15 of the next year when one person receives more than $19,000 from a donor.
$15,000,000
Basic exclusion amount for 2026 – gift tax is owed only after lifetime taxable gifts pass it.
Who does what
- The donor files and, if any tax is due, pays; the buyer receiving the gift does not file a gift tax return.
- Spouses each file their own Form 709 – there is no joint gift tax return.
- A gift of community property or joint-account money counts as half from each spouse.
- Tuition paid directly to a school and medical expenses paid directly are excluded.
What the TC can do
- Get the lender's gift letter signed by the donor and the transfer records to the lender early.
- If the gift is large, suggest the donor talk to a tax professional about Form 709 – it is the donor's return, not the buyer's.
- Keep gift and bank documents out of email; the buyer and donor upload them.
Questions buyers and parents ask
Do I pay tax on a down payment gift from my parents?
No. Gift tax is the donor's responsibility; the donor generally pays any tax due (IRS gift tax FAQ). In most cases no tax is due at all.
How much can parents give for a down payment without paying gift tax?
In 2026 each parent can give $19,000 to each person without filing. Larger gifts need Form 709, but tax is generally owed only after the donor's lifetime taxable gifts exceed the basic exclusion amount ($15,000,000 for 2026).
When is Form 709 due?
By April 15 of the year after the gift; if April 15 falls on a weekend or legal holiday, the next business day (Form 709 instructions).
Related guides
Request the signed gift letter and the transfer records from the buyer in ClosingCode with an upload link in English or Spanish – and see when they arrive.
Start free trialSources (IRS, read October 25–26, 2026): Frequently asked questions on gift taxes; What's new – Estate and gift tax; Instructions for Form 709 (2025) – Who Must File, When To File.
General information, not tax advice. Gift and estate tax planning depends on the donor's whole situation – the donor should ask a tax professional. ClosingCode is software; it is not a tax preparer or CPA. This guide is not a substitute for the advice or services of an attorney.