The typical repeat home buyer is now 62, and 14% of all buyers in the year that ended June 2026 bought a home meant to hold more than one generation, according to the National Association of Realtors’ 2026 Profile of Home Buyers and Sellers.
Among those multigenerational buyers, the most common reason was caring for aging parents, at 30%. Cost savings came next, at 23%.
Pooling two households can stretch everyone’s money. It can also move large sums between relatives, and the IRS, Medicaid, and insurers each have rules about that.
1. Whose name goes on the deed
When a parent sells a home and puts the proceeds into a shared one, decide up front whether that money is a gift, a loan or a share of ownership, and put the answer in writing. It shapes who can sell, who inherits and what the IRS sees.
A gift of more than $19,000 to one person in 2026, or more than $20,000 in 2027, means filing a gift tax return, though no tax is due until lifetime gifts pass $15 million ($15.48 million in 2027).
Ownership also has tax consequences later. Heirs who inherit property generally get a cost basis reset to its value at the owner’s death, while someone handed a share during the owner’s lifetime keeps the original price, which is why adding a child to the deed can leave that child with a large capital gains bill.
When six figures are changing hands, it may pay to have someone run the numbers for both households before anyone signs. WiserAdvisor can connect you with financial advisors to compare.
2. Whether Medicaid will call it a gift
If a parent later needs Medicaid to cover nursing home care, the state looks back 60 months for assets given away for less than they were worth. Money a parent put toward a child’s house, without getting ownership or repayment in return, can count as one of those transfers and delay eligibility.
Federal law carves out one notable exception. A parent can transfer a home to a son or daughter who lived there for at least two years immediately before the parent entered a nursing home and whose care let the parent stay at home during that time.
The state decides whether the care qualifies, so keeping a record of what was done and when is worth it.
Moving title for other reasons can trigger a Medicaid penalty and a five-figure tax bill.
3. Whether your insurer knows who lives there
A standard homeowners policy typically covers the belongings of a relative who lives in the household, according to the National Association of Insurance Commissioners. Contents coverage is capped, though, and a parent who arrives with jewelry, artwork or a houseful of furniture can push past the limit. Pricier items may need added coverage.
Two other changes call for a conversation with your agent. An addition with its own kitchen and bathroom means the policy needs updating to reflect it.
And if the parent pays rent, the NAIC suggests that person may want renters insurance.
4. How you will pay for the remodel
Plenty of houses need work before they suit two generations: a first-floor bedroom, a walk-in shower, a ramp at the back door. Some of that may be deductible.
The IRS lets you count certain changes made for you, your spouse or a dependent with a disability who lives with you, such as entrance ramps and widened doorways, as medical expenses, often in full because they usually add little to a home’s value. The break helps only if you itemize and your medical costs exceed 7.5% of your adjusted gross income.
For bigger projects, a home equity loan or line of credit lets you borrow against the house without giving up your current mortgage rate.
Quicken Loans' home equity calculator can show how much equity you may be able to tap, then match you with estimated rates and payments from lenders.
1 LMB Mortgage Services, Inc. d/b/a Quicken Loans; NMLS #167283; https://www.nmlsconsumeraccess.org/. Not a lender. Quicken Loans is a financial services marketplace that connects consumers with lending partners.
5. Whether you can count a parent’s medical bills
Adult children who cover a parent’s doctor and drug bills may be able to deduct them even when the parent’s income is too high to claim the parent as a dependent. The IRS lets you include medical expenses for someone who would have been your dependent except that they had gross income of $5,300 or more in 2026 or $5,500 or more in 2027.
The other dependency tests, including paying more than half of the parent’s support, still apply.
When siblings share the cost, a multiple support agreement can let one of them count the medical bills that sibling pays. Nobody else in the agreement can count theirs.
6. What happens when the plan changes
Every multigenerational arrangement eventually shifts, through a move to assisted living, a death, a divorce or a job in another state. Decide in advance whether the house gets sold, who buys out whom and at what price, and how a parent’s share passes on.
Siblings who do not live in the house will want a say in that last part. A will or trust that spells out each person’s share answers that before anyone has to ask.
Write it down while everyone agrees
Sellers in the NAR survey had owned their homes a median of 12 years, a record. A house bought for two generations could easily outlast that, along with every handshake made the week the moving truck showed up.
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