Government’s First Time Home Buyers Incentives 2019 Explained

Every Canadian deserves a safe and affordable place to call home. Yet for too many Canadians, especially for young people, it feels like an impossibility. There aren’t enough houses for people to buy, or apartments for people to rent. That makes finding a good place to live too expensive – beyond what many people can afford.

The measures in Budget 2019 plan is to increase the supply of housing, because it is the most effective way to address affordability in the long run.

And to help more middle class families find an affordable home today, Budget 2019 is offering new, targeted support for first-time home buyers, and taking steps to address lack of housing supply and making housing market more fair.

Introduction of the First-Time Home Buyer Incentive (FTHBI)

  • A new initiative that will see the CMHC provide 5% of your down payment for the purchase of existing homes, or 10% for the purchase of a new build
  • The mortgage must be default insured
  • Your income must be less than $120,000
  • No monthly payments are required, and this amount can be paid back at any time, or upon the sale of the house
  • The insured mortgage plus incentive cannot be more than four times the participants’ household income
  • Effective as of September 2019
  • The government expects 100,000 first-time buyers will take advantage of the program over the next three years at a cost of $1.25 billion

Increasing the RRSP Home Buyers’ withdrawal limit to $35,000 from $25,000

  • Permits two first-time buyers in the same household to combine withdrawals for up to a $70,000 down payment
  • Available for first-time homebuyers. But as of 2020, this program is eligible for those who split from their spouse or common-law partner, even if they are not first-time buyers
  • The funds must be repaid within 15 years, or the withdrawal will have tax implications

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