Justin Trudeau’s Liberals are back in power, albeit this time around with a minority government. Within our community, this could raise mixed feelings as to the future state of our country. However, we should keep in mind that there are currently policies in place put forth by the government that could be very beneficial to us.

On September 2, 2019, the Federal government launched a national program targeting first-time home buyers.  The First Time Home Buyer Incentive (“FTHBI”)  encourages qualified individuals to pursue purchase on their first home through the government providing up to 10% of the downpayment required for the purchase.

In order to qualify, individuals are required to have:

  • Minimum downpayments of 5% from sources such as RRSPs, savings or gifts; and
  • Qualifying household income not exceeding $120,000, and amount borrowed not to exceed four times their household income

If this sounds too good to be true, and that the government is extending its generosity without expectation of any reciprocity, you are right to be doubtful. Afterall, through the FTHBI, the government shares in the equity of your home and when you do decide to sell your property, the government is required to be paid out their share. If the property is not sold, the government still expects repayment of their share after 25 years.

However, on the flip side, individuals are obligated to put less towards their downpayment from their own funds. With the current state of the economy, finding an affordable place for a first-time home buyer is challenging. With rental rates often on par with mortgage payments for  starter homes, the additional funding assistance may be all that is needed for an individual to utilize the FTHBI.

The FTHBI is currently available for possession dates from November 1, 2019.

Steve Dimic

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