How Families Can Beat 7% Mortgage Rates and Lower Their Tax Bills

Happy is the family whose members—parents, grandparents and grown children—trust each other enough to cooperate on shared goals, especially financial ones. When that is truly the case, Uncle Sam’s tax rules can help as well.

This matters especially now that mortgage rates are above 7%, and many families are looking for ways to help younger members. If the elders have resources and are confident younger ones can cooperate, a family loan could make homeownership possible while providing the elders with a useful income stream.

Other strategies can actually lower taxes, such as when funding 529 plans or Roth IRAs, or when someone inherits a traditional IRA with required withdrawals larger than they will need.

Here are three strategies useful for functional families.

Intrafamily loans

It is perfectly legal for families to lend money to a relative for a down payment or even a private mortgage.

But it is important not to cut corners, says Ryan McKeown, a CPA with Modern Wealth Enhancement in Minnesota. If the loan is for a down payment, be honest with the mortgage provider and have a formal agreement. The lender owes tax on the interest payments received.

If the loan is for a private mortgage, both sides should have legal representation with a formal written agreement, including payment terms. The lender owes tax on the interest, and the borrower often can deduct it if he or she itemizes.

To avoid IRS trouble, the interest rate shouldn’t be lower than the agency’s Applicable Federal Rate at the time of the loan. Currently that is about 5% for loans longer than nine years; about 4.5% for loans three to nine years; and about 4% for loans three years or less. Currently, traditional mortgage rates are generally above 7%.

In addition, the lender could use the $19,000 annual gift-tax exemption (described below) to forgive some or all of the interest or principal annually. If both lenders and borrowers are married, that is up to $76,000 a year. There is no tax for the borrower on such forgiveness, because it is from a gift.

If you’re going this route, McKeown advises against having a fixed plan to forgive the debt. Instead, do it in one-off letters specifying the amount—and keep careful records. Otherwise the IRS might try to treat the loan as a taxable gift.

Asset gifts

Powerful tax-saving moves for families often use gift-tax provisions. Under current law, anyone can give anyone else up to $19,000 of assets annually, free of gift tax. That means a married couple with three grandchildren could give them a total of $114,000 in 2026.

The gifts can be cash or other assets, like stock. For noncash gifts, the cost basis—which is the starting point for measuring taxable gain after a sale—“carries over” to the recipient. So if someone buys $1,000 of stock and gives it away when it is worth $5,000, the recipient’s cost basis is $1,000. If the recipient later sells the shares for $8,000, the taxable gain is $7,000.

Here’s an example showing how gifts could save a family taxes. Grandma is a widow of modest means, while her child and spouse have prospered. The couple has two children, and they want to contribute $5,000 to a 529 college-savings plan for each—but they need to sell stock to do it. Their tax rate on the sale would be 18.8%, and they would need to sell about $11,000 of stock.

However, Grandma’s federal tax rate on the stock sale is 0%. If the couple gives $10,000 of shares to Grandma, she could sell them, pay no tax, and fund the grandchildren’s 529 plans. This saves about $1,000 of tax.

These moves are legal, and they could be used in other ways, such as to help a young person fund a Roth IRA.

But trust among family members is essential: Under the law, givers can’t put conditions on a gift. Grandma could use her stock proceeds to take a cruise, but she makes 529 contributions instead.

Mark Sellner, a retired tax attorney and CPA living in Sarasota, Fla., uses this strategy. His children sell stock he gives them and fund 529 plans for his grandchildren.

The family’s tax savings aren’t huge, but he likes other benefits. The sales by his children don’t boost his adjusted gross income, which in turn could raise his Medicare Irmaa premiums or his 3.8% surtax on net investment income.

Sellner doesn’t worry about his children using the funds for another purpose.

“There can’t be any strings attached to gifts. Of course, it is up to us to decide whether to make them in the future,” he says.

Two caveats: The “kiddie tax” applies to most children under age 24, and it is levied at the parents’ rate on investment income above $2,700 in 2026. Consider this before making gifts to a young person.

Investors who give away stock also forgo the step-up, an important provision that exempts assets held at death from capital-gains tax.

Sellner knows he’s losing a step-up, but says, “The children could use a little more now. Why should they wait 20 years to get it?”

Disclaimers

A disclaimer is a highly useful strategy in which one heir renounces an inheritance in favor of another heir. Assuming family members cooperate, this can save taxes.

Here’s one example. Dad died and had a large traditional IRA that he left to Mom. She has enough assets and income to cover her expenses, and she lives in a state with a stiff estate tax. The inherited IRA would put her estate over the threshold.

Also surviving are three young-adult children. If Mom disclaims all or part of Dad’s IRA within nine months of his death, that amount could go directly to the children. They will have 10 years to empty the account, and the family as a whole will likely save estate and income taxes.

Disclaimers have many key details, especially regarding beneficiary documents. Although heirs have great freedom in choosing what assets to disclaim, the rules about who gets disclaimed property are rigid. It is best if the original owner names tiers of heirs so that if one disclaims, the next recipient is clear.

For all the attention Porsche’s move to electric power has generated, perhaps the most surprising number attached to its latest EV isn’t its range or charging speed.

It’s 1,156.

That is the maximum horsepower available from the new Cayenne Turbo Electric, making a large, five-seat family SUV the most powerful production Porsche ever built.

Not a 911. Not a Taycan. Not one of Stuttgart’s limited-production track specials. A Cayenne.

The new flagship produces up to 850kW, or 1,156PS, and 1,500Nm of torque with Launch Control activated, enough to send it from 0–100km/h in just 2.5 seconds.

Keep the accelerator pinned and 200km/h arrives in 7.4 seconds, before the Cayenne eventually reaches its 260km/h top speed. Those numbers put a vehicle capable of carrying five people and their luggage firmly into supercar territory.

It also represents something of a full-circle moment for the Cayenne.

When Porsche first revealed the original Cayenne more than two decades ago, the idea that the sports car specialist would build an SUV was controversial. It went on to become one of the company’s most important models and helped expand Porsche well beyond the traditional two-door sports car market.

Now the Cayenne is again being used to push Porsche into new territory.

The Cayenne Turbo Electric sits at the top of a growing three-model electric range in Australia, above the Cayenne Electric and Cayenne S Electric. Crucially, Porsche isn’t abandoning combustion power in the process. Petrol and plug-in hybrid versions of the Cayenne continue alongside the new electric generation, giving buyers a choice of powertrains rather than forcing an immediate wholesale transition.

But if the electric Cayenne is supposed to demonstrate what Porsche believes the next generation of its luxury SUV can do, the Turbo is the exclamation point.

In normal driving it produces up to 630kW, or 857PS. A Push-to-Pass function can temporarily add another 130kW for 10 seconds, while the full 850kW is unleashed with Launch Control.

Managing that much performance repeatedly is considerably more complicated than simply fitting powerful electric motors.

Porsche has equipped the rear motor with direct oil cooling, technology derived from motorsport, designed to maintain high continuous power output and efficiency rather than deliver one spectacular acceleration run before heat begins limiting performance.

It is part of the broader engineering challenge facing the new Cayenne.

Porsche hasn’t simply had to make a very fast electric SUV. It has had to make a 1,156PS electric SUV behave like a Porsche.

Adaptive air suspension with Porsche Active Suspension Management is standard, while the Turbo adds Porsche Torque Vectoring Plus. Rear-axle steering, capable of turning the rear wheels by up to five degrees, is optional.

Buyers can also specify Porsche Active Ride, the active suspension technology already seen elsewhere in the Porsche range. The system is designed to almost completely compensate for pitch and roll movements, helping keep the body level under acceleration, braking and cornering. That becomes particularly relevant in a large SUV carrying a substantial battery beneath its floor.

Even braking has been approached differently.

The Cayenne Electric can recover energy at up to 600kW under deceleration, a figure Porsche compares with the recuperation capabilities of its Formula E racing cars. The company says around 97 per cent of everyday braking can consequently be handled by the electric motors without requiring the conventional friction brakes.

For those intending to explore the outer edges of its performance envelope, Porsche Ceramic Composite Brakes remain available on the Turbo.

Then there is the battery.

A 113kWh high-voltage battery sits at the centre of the Cayenne’s new 800-volt electrical architecture. For the Turbo, Porsche quotes a European WLTP range of up to 623 kilometres, although Australian-specific range figures can vary depending on specification and testing.

More impressive is how quickly that battery can theoretically be replenished.

The Cayenne can accept DC charging at up to 390kW under optimal conditions, briefly reaching as much as 400kW under specific circumstances. Porsche says a 10 to 80 per cent charge can take less than 16 minutes when connected to sufficiently powerful infrastructure and with the battery at the appropriate temperature.

That potentially addresses one of the compromises that has traditionally separated a long-distance electric luxury SUV from its petrol equivalent.

Finding a charger capable of delivering anywhere near 400kW is another matter, particularly in Australia, but the car itself has been engineered with considerably more charging capacity than much of today’s infrastructure can provide.

Porsche is going further at home.

The Cayenne Electric is the first Porsche designed to support optional wireless charging. Rather than plugging the car into a wallbox, owners will eventually be able to park above a floor plate capable of inductively charging the battery at up to 11kW.

The system automatically recognises the vehicle and allows it to lower itself into the appropriate position above the plate. Porsche expects the wireless charging system to become available to order in Australia in the fourth quarter of 2026, with Australian Cayenne Electric models pre-wired to allow it to be retrofitted, unless buyers opt out.

For all those numbers, however, the Cayenne still has to fulfil the role that has made it such an important Porsche for more than 20 years. It needs to be useful.

The electric model is 4,985mm long and rides on a 3,023mm wheelbase, almost 13 centimetres longer between the axles than the combustion-engined Cayenne.

Most of that extra space has been used to improve rear passenger accommodation.

The electrically adjustable rear seats can move between comfort and cargo-oriented positions, while luggage capacity ranges from 781 litres to 1,588 litres. Removing an engine from the front also creates a further 90-litre luggage compartment under the bonnet.

Depending on specification, the Cayenne Electric can tow as much as 3.5 tonnes. It is that collision of figures that perhaps best explains the new Turbo.

This is a vehicle capable of reaching 100km/h in 2.5 seconds and producing 1,500Nm of torque, yet it can also carry a family, swallow more than 1,500 litres of luggage with the rear seats configured for cargo and tow a substantial boat or caravan.

Inside, Porsche has similarly moved the Cayenne further into its digital era.

The new Porsche Driver Experience combines a fully digital instrument display with the curved central Flow Display, while a separate passenger display and augmented-reality head-up display are available.

Despite the expansion of screen real estate, Porsche has retained a mixture of digital and physical controls rather than moving every function behind a touchscreen.

Australian Turbo models also receive a generous standard specification, including a panoramic roof, ventilated front seats, four-zone climate control, privacy glass and Porsche’s Parking Entry Package with Surround View and Self-Steering ParkAssist.

And we now know what all of it will cost.

The Cayenne Turbo Electric is priced from $259,900 before on-road costs in Australia, compared with $167,800 for the Cayenne Electric and $193,100 for the Cayenne S Electric.

Orders are already open, with the first Australian deliveries expected from the third quarter of 2026.

There is also a Cayenne Turbo Coupé Electric for buyers wanting the same extraordinary drivetrain beneath a more sporting roofline. It is priced from $272,100 before on-road costs.

Ultimately, however, the significance of the Turbo isn’t simply that Porsche has electrified another model. The company has used electrification to move the performance ceiling of the Cayenne somewhere it has never been before.

How Families Can Beat 7% Mortgage Rates and Lower Their Tax Bills

Strong family financial planning can help reduce taxes and support younger generations. From intrafamily loans and asset gifts to inheritance disclaimers, strategic cooperation can create meaningful financial benefits—when families have the trust and structure to make it work.

Intrafamily loans

Asset gifts

Disclaimers

Porsche’s Cayenne Turbo Electric produces up to 1,156PS and reaches 100km/h in a claimed 2.5 seconds.