First-time homebuyers Incentive! Canada’s Federal Budget
The Minister of Finance Bill Morneau presented the 2019-2020 federal budget in March 2019. Key themes include growing the economy, implementing national pharmacare, investing in the middle class, and gender equality.
To assist First Time Home Buyers, the budget includes the following:
First-time homebuyers Incentive: First-time homebuyers whose household income is under $120,000 may qualify for an interest- free loan from Canada Mortgage and Housing Corporation of 10% for new homes and 5% for existing homes. This allows you to put more money down and borrow less for your mortgage. This will go into effect in September of 2019. Borrowers must have a down payment of at least 5% — but less than 20% — and a household income under $120,000.
The purchase price of the home cannot be more than four times the buyers’ household income. This effectively limits purchases to just below $480,000, which is close to the national average resale home price.
Home Buyer’s Plan: RRSP withdrawals increase to $35,000 from $25,000, whether married or common-law, even if separated or divorced, as long as the money is used for a first home.
Check How to participate in the Home Buyers’ Plan (HBP)
Current Incentives Include:
Land Transfer Tax Refunds for First-Time Homebuyers: Beginning January 1, 2017, the maximum amount of the refund is $4,000. The increased limit of $4,000 applies only to conveyances or dispositions that occur on or after January 1, 2017, regardless of the date the agreement of purchase and sale was signed.
Beginning January 1, 2017, no land transfer tax would be payable by qualifying first‑time purchasers on the first $368,000 of the value of the consideration for eligible homes. First‑time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000.