Newlyweds are asking for this as a wedding gift —and it isn’t a fancy espresso machine

Couples used to get gravy boats and fine china as wedding gifts, but now, with interest rates and housing prices on the rise, more newlyweds are asking for cold, hard cash to plunk down on a home.

“Most couples have already been living together by the time they get married, so they are less interested in registering for toasters and espresso machines, as they already have household items,” says Cara Ameer, real estate broker at Coldwell Banker Vanguard Realty in Florida. “What they lack is a nest egg to buy a home.”

According to a recent , 48% of homeowners who tied the knot in the past two years asked for down payment assistance from wedding guests in lieu of traditional presents—and 26% said they put more money down on a home purchase because of money they received at their wedding.

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“I recently worked with a couple who used part of their wedding gifts to help with their down payment,” says Florida real estate agent Ron Myers. “With housing prices staying high, I think more couples may start looking at gift money as a way to get into their first home faster. It gives them a head start without taking on more debt.”

While to some it might seem gauche, gift money is one smart way to move toward your dream of owning a home—without too many tax implications.

How much should newlyweds save for a down payment?

The common rule of thumb for homebuyers is to aim for a down payment of 10% to 20% of the home’s purchase price.

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For example, a Realtor.com® report released earlier this month found that homebuyers paid $29,900 on average for a down payment and 14.4% as a share of the purchase price in 2024.

But the down payment is only one of the upfront costs needed to buy a house. In addition, buyers need to save for closing costs.

These fees, paid to third parties to help facilitate the sale of a home, typically total 2% to 7% of the home’s purchase price.

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The median home price in March 2025 grew to $424,900—which means the average closing costs would range between $8,498 and $29,743.

Rules for gift money for a down payment

In recent years, bride and grooms have asked their guests to gift money earmarked for specific usage, like honeymoon activities and home furnishings. Money gifted for usage toward a down payment is not unheard of. In fact, it’s become fairly commonplace. But gift money does need to be declared on your taxes.

Whether you’re a wedding guest or a wealthy family member, an individual can gift up to $19,000 to a single recipient, or $38,000 to a married couple,  without incurring gift tax liability, according to Fred Goncher of Backyard Mortgage Corp. in Garnerville, NY.

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But exceeding the annual gift tax exclusion doesn’t mean you have to pay a gift tax—it simply means you need to submit IRS Form 709 to disclose the gift.

You have to pay taxes only if you exceed the lifetime gift tax exemption—which is $13.99 million for single filers, and $27.98 million for married couples filing jointly.

“Gift tax is not something regular people should ever fear,” says Goncher.

But what about estate taxes?

“Unless the gift is in the eight figures, those will not apply, either,” says Goncher.

If you were receiving a lump-sum gift from one person, you’d likely need a gift letter for the lender explaining the source of funds.

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“However, since getting a gift letter from wedding gift givers would be impractical, lenders instead ask for evidence of the wedding and a copy of the deposit made after the wedding,” says Goncher.

Using gift money vs. a conventional loan

What are the pros and cons of using gift money versus a conventional loan?  

If your cash gift is enough to pay for the property outright, “paying cash is often a quicker and simpler process versus obtaining a loan where you will be asked to supply documentation about your income, assets, and tax returns to the lender,” says Ameer.

If you are financing the property, current Fannie Mae rules consider a documented gift to be the same as the borrower’s own funds, according to Goncher.

There might be a little more paperwork involved, but “having gifts funds can reduce the cash needed for down payment and closing costs,” says Goncher. That is a win-win.