Family sending money from overseas to buy a house in Canada: gift or loan?

If your parents or relatives abroad are helping you buy a home in Canada, one question decides how it's handled: is the money a gift or a loan? The answer shapes your mortgage, your taxes, and — because the money crosses a border — the paperwork you'll need.

For many newcomers and first-time buyers, family abroad is the only way the down payment math works. That's completely normal and completely allowed — Canada lets you bring in foreign funds to buy property. But two systems are watching how the money moves: your mortgage lender (which cares whether it's a gift or a debt) and Canada's anti-money-laundering rules (which care that the money is traceable and legitimate). Get both right and it's smooth. Get them wrong and your closing can stall.

First: is it a gift or a loan?

This is the same fork as for any family down payment — the overseas part doesn't change it:

• It's a gift if your family never expects to be repaid. Your lender will want a signed gift letter stating the funds don't have to be paid back. A gift doesn't add to your debts, so it won't reduce how much mortgage you qualify for.
• It's a loan if your family expects the money back. That's real debt — it can lower how much you qualify for, and it should be set out in a written loan agreement. The lender must be told, so it's accounted for honestly.

You can read the full breakdown of how each affects your mortgage and taxes in our guide to family down payments: gift or loan. The short version: you can't have both at once on the same dollars, and you can't sign a gift letter for money that's secretly a loan.

The part that's different for overseas money: AML and the 90-day holding period

Because the funds originate outside Canada, lenders apply extra scrutiny under anti-money-laundering (AML) rules overseen by FINTRAC. Expect the following:

• The 90-day "seasoning" practice. Many lenders want foreign funds to sit in your Canadian bank account for about 90 days before closing (versus roughly 15–30 days for money already in Canada). It's lender and insurer policy, not a federal rule, so ask yours — and plan early, because wires and currency conversion take time.
• A clear paper trail. You must be able to show where the money came from: wire-transfer receipts, the sender's details, and often the donor's own 90-day bank history proving the funds were theirs.
• Large-transfer reporting. Banks report international transfers of $10,000 or more (including several smaller ones within 24 hours) to FINTRAC. This is routine — not a problem — but it's why documentation matters.
• Source-of-funds proof. The burden is on you to show the money was obtained legitimately. Keep every record.

Does the CRA tax money sent from family abroad?

Generally, no — Canada has no gift tax, and a genuine gift from family (whether they live in Canada or overseas) is not taxable income to you. There's no limit on the amount. A few honest caveats:

• Income the money earns (if you invest it) is taxable in the normal way.
• If it's a loan used to invest, CRA attribution rules can apply unless the loan charges at least the CRA prescribed rate. For a home you live in, this usually isn't a factor.
• If your family charges interest, Canadian withholding tax applies to the interest you pay a relative living abroad: 25%, often reduced by a tax treaty. As the payer, you're generally responsible for withholding it and sending it to the CRA, so ask an accountant before you make the first interest payment.
• Tax in the sender's country is a separate question — some countries tax outbound gifts or large transfers. Your family abroad should check the rules where they live.

The AML documentation is about proving the money is clean and traceable — it is not a tax. Keeping good records protects you if the CRA ever asks how a large purchase was funded.

If it's a loan, document it — this is where it matters most

When family abroad lends rather than gifts, a written agreement does double duty: it records the real intention (a repayable loan, not a gift), and it protects the family's money across a border and across a relationship that might change. It states the amount, currency, repayment terms, and that both sides agreed. A clear loan agreement is also what lets you be honest with your lender instead of mislabeling the money.

Your province

Anti-money-laundering reporting is federal and applies everywhere in Canada. How long funds must sit in your account is set by your lender or mortgage insurer, and it varies. The loan agreement itself is governed by your province's law — here are the province-specific guides:

Common questions

Is money sent from family overseas to buy a house in Canada a gift or a loan?

It's whatever you and your family genuinely intend and document it to be. If it never has to be repaid, it's a gift, and your lender will want a signed gift letter. If it has to be repaid, it's a loan, which should be put in a written agreement and disclosed to your lender. The money coming from overseas doesn't change this; it just adds paperwork.

How long does money from abroad need to be in my Canadian account?

There's no federal rule. Many lenders want foreign funds in your Canadian account for about 90 days before closing, compared with roughly 15–30 days for money already in Canada, along with wire receipts and proof of where the money came from. Requirements vary by lender and mortgage insurer, so ask yours early and move the money well ahead of time.

Do I pay tax on money my family sends from overseas?

Generally, no. Canada has no gift tax, and a genuine gift from family abroad isn't taxable income to you, whatever the amount. Income you later earn by investing it is taxable as usual. Your family should check the rules where they live, because some countries tax outbound gifts or large transfers.

What if my parents abroad charge me interest on the loan?

Then Canadian non-resident withholding tax applies to the interest you pay them: 25%, often reduced by a tax treaty between Canada and their country. As the payer, you're generally responsible for withholding it and sending it to the CRA. Ask an accountant before the first interest payment, and put the rate in your written loan agreement.

This article is general information about Canadian mortgage, tax, and anti-money-laundering practice, not legal, mortgage, or tax advice. Requirements vary by lender, and tax rules in the sender's country are separate. Confirm timing and documentation with your mortgage professional, and consult a licensed lawyer or tax advisor for a large or cross-border arrangement. Sources include FINTRAC's reporting guidance, current Canadian mortgage-broker practice, the CRA's position that Canada has no gift tax, and the Income Tax Act's non-resident withholding rules.