For many Canadians, finding an affordable place to buy is not just a challenge – it feels impossible. 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 and beyond what many people can afford.
Canada’s National Housing Strategy has just implemented the First-Time Home Buyer Incentive. This new incentive put out by the federal government will make buying a house a whole lot easier.
How does it work?
The incentive enables first-time homebuyers to reduce their monthly mortgage payment without increasing their down payment. The incentive is not interest-bearing and does not require ongoing repayments.
Through the First-Time Home Buyer Incentive, the Government of Canada will offer:
- 5% for a first-time buyer’s purchase of a re-sale home
- 5% or 10% for a first-time buyer’s purchase of a new construction
For this incentive, a home doesn’t have to be a house. The types of properties included in the incentive are single-family houses, semi-detached houses, townhouses, condo units, duplex, triplex and fourplex.
Also, your total income must be $120,000 or less per year individually if buying alone or that same amount combined if buying with another person.
So if you’ve been thinking about buying a house, it might be the perfect time to start looking into it and apply to this incentive, which is open to all Canadian citizens, permanent residents and non-permanent residents who are legally allowed to work in this country.
While places like Toronto and Vancouver might not have many people taking advantage of the incentive, cities which have lower average house prices, like London, could see more people using the incentive.
The Incentive is not free money, but a form of loan from the Government of Canada. Buyers will have to pay the money back after 25 years or when they sell their home, whichever happens first.