A gift of equity is when a home seller, typically a family member, transfers a portion of their home's equity to the buyer as a gift. The gift represents a portion of the seller's equity in the property.A gift of equity occurs when the home seller agrees on a price significantly lower than the home's appraised value. A gift of equity is the sale of a residence to a family member or someone with whom the seller has a close relationship. How do you calculate the gift of equity? The gift represents the amount of equity the seller gives to the relative buying the home.