Thinking about purchasing a home for your children? Here are a few tips from an article written by Tim Cestnick from Globe and Mail, for the full article click here.

1. Make it a starter home.

If you are going to help a child buy a home, make sure he or she can afford the property taxes, maintenance, mortgage payments and other costs – otherwise you could be writing more cheques later. There is no point in helping your child buy a home that his or her income cannot support. Even a smaller starter home can get your child into the market and, over the long run, help build equity that could lead to a different place later.

2. Consider a gift to help your child.

If you make a gift of cash to your child to help buy a home there are no negative tax consequences – unless you have to sell some investments at a profit to free up the cash, in which case taxes could be owing on a capital gain.
If your adult child buys a home in her name and lives in the place, then she wi'll be able to use her principal residence exemption (PRE) later to shelter any gains from tax. Be aware that if your child is married and then later divorces, the value of your gift could be split between her and her ex-spouse if those dollars were invested in a matrimonial home. Making a gift to your child before she gets married may mean she's entitled to that value (i.e. it may not have to be split) upon a marriage breakdown – but speak to a family lawyer in your province to confirm the rules where you live.

One last point about gifts: If you are a U.S. citizen, making a gift to a child can trigger a gift tax liability if the gift is more than $14,000 (U.S.), the 2016 exclusion amount, although you will likely be able to avoid any tax hit by using up part of your estate and gift tax exemption (speak to a tax professional).

3. Consider a loan to help your child.

Lending money to your adult child to buy a home might be an even better option. There are no negative tax consequences to lending money for the purpose of buying a home. You will maintain some control over the property if you set it up as a mortgage on the home. The mortgage can be interest-bearing, or not, with specified repayment terms, or simply due upon demand.
If your child goes through a divorce, you will be entitled to take back the balance of the mortgage outstanding, which can help keep those dollars in your family rather than handing part of that amount to your child's ex-spouse.
The loan you make does remain an asset of yours, which could be subject to probate fees upon your death in provinces in which those fees are levied (likely to be a small cost on a mortgage loan to your child). 

4. Consider gifting the property itself.

Transferring a property will be taxed as a disposition at fair market value (FMV) by you. This may be fine if the property has not appreciated in value much, or you can shelter any capital gain using your PRE. If you transfer a rental property, your child will inherit the property with an adjusted cost base equal to the FMV at the time of the transfer, and should be able to use his or her own PRE to shelter any gains going forward if he or she sells.