The New First Time Home Buyer Incentive
Say goodbye to the 30 year amortization talk or option. It’s gone by the wayside. The New First-Time Home Buyer Incentive is designed to help some first time home buyers, but not all. Theoretically, the government claims the incentive will help those who have the minimum down payment for a mortgage (5%)—to finance 10% on a new home from a developer/ new home that hasn’t been lived in or, if the buyer has 5% to put down CMHC matches 5% on an existing home with the shared equity mortgage with the Canadian Mortgage and Housing Corporation (CMHC).
The Incentive will lower buyer’s monthly mortgage payments, but like everything these days from the government there is a fine print. This incentive is only good for those who probably can’t afford a home in the $500,000 price range as it is. The only people who are able to take advantage of the incentive can only be from households with combined incomes of lower than $120,000 per annum. You will also have to repay the additional deposit granted by CMHC at some point once the incentive is finalized. Whether that be paid back up on the sale of the home or over time is still undetermined.
The government wants to increase home supply (to likely help boost immigration) and is claiming to look into ways to monitor and target tax evaders and those who use real estate to launder money, in an effort to bring down housing prices.
This will likely not necessarily help first time home buyers unfortunately. It more or less helps the sellers or the big developers sell their hard to sell condo buildings Last time Christy Clark did a change similar to this all it did was raise the prices by about $35,000. This new incentive will likely just do the same for lower priced units in the Fraser Valley and Lower Mainland. So, if you were saving for your deposit don’t expect to see the lower price ranges in the Valley or Lower Mainland come down much more.
More smoke and mirrors by the government making it look like they’re helping first time home buyers, but really they aren’t.