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Great news for First Time Homebuyers!

Posted: April 1, 2019

Last month, the Federal government tabled two proposals making it more affordable for Canadians to buy a home: The First-Time Home Buyers Incentive Program, and an increase to the Home Buyer’s Plan. This is exciting news for those wanting to get into the real estate market, and we thank the federal government for easing the housing market rules – something that has not been done in over a decade.

We will talk more on the First-Time Home Buyers Incentive Program, as it is scheduled to launch in the fall, once the program is finalized. Today, we will focus on the increase to the Home Buyer’s Plan (HBP), and what that means for you, as this program is now active and eligible for qualified buyers.

Currently, first-time homebuyers can withdraw up to $25,000 from their Registered Retirement Savings Plan to purchase or build a new home without having to pay tax on the money withdrawn. The proposed new HBP increase will allow first-time homebuyers to withdraw up to $35,000 or $70,000 per couple (a couple denotes those married or common-law). This is great news, as first-time homebuyers can increase their purchasing power by $10,000, and an increase in $10K to the mortgage will save homebuyers approximately $50 a month (that’s $15K for the 25 years you have a mortgage). Also, an increase in the down payment will allow homebuyers to qualify for slightly more home. For example, a homebuyer wanting to buy a $500,000 home would need $3K less in income by increasing their down payment by $10,000.

We will continue to keep you updated on these new programs as details roll in, and if you have any questions on what these new proposals mean for you or future homebuyers, just give us a call.