Definition
When a seller (usually a family member) sells a property below market value and treats the difference as a down payment gift. It's nepotism in real estate form, and the IRS has feelings about it.
Example Usage
My parents gave me a gift of equity by selling me their house for $50,000 below market—now I owe them forever instead of a bank.
Origin
Tax and lending term formalized in the 1980s
Fun Fact
The IRS allows gifts up to $18,000 per person per year without tax implications, so strategic family members can pool their generosity.
Source: Mortgage financing and tax terminology
Related Terms
Translate This Term
See “gift of equity” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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