The Federal Government has announced the budget which includes a number of incentives targeted at housing affordability and helping first time buyers.
The budget includes two main changes, with a number of details still unclear.
The first incentive is the amount that an eligible first time buyer would be able to withdraw from their registered retirement savings plan (RRSP). The Home Buyers’ Plan will allow $35,000 (was previously $25,000) to be withdrew from the RRSP without having to pay tax on the withdrawal.
The second incentive is the introduction if the First-Time Home Buyer Incentive which would allow eligible buyers to finance part of their downpayment through a shared-equity mortgage with CMHC. This would be for eligible first time buyers that are making a downpayment of less than 20 per cent. CMHC would offer 10 per cent shared equity mortgage for new construction homes and condos, or 5 per cent for existing (re-sale) homes and condos. It is expected to start in September and last for three years minimum.
There are lot of details that are still unclear (shared equity? what about losses when properties sell? first time buyers - its not that simple! how much will they make when a buyer sells? etc.).
Any questions on how it could affect you or an upcoming purchase? Fill out the form on the bottom of the page and let’s chat.
