A change offering hope to many who have long dreamed of owning a home…

A highly anticipated announcement was made on March 19, 2019 by the Finance Minister when he tabled the Federal Budget in which included information about easing measures for housing.

An announcement indicating a shift in perspective from a government level which hopefully begins a new era where we can expect further easing over the coming years and Canadians will have more of an opportunity of owning a home.

There are 2 main proposals for housing affordability which were introduced; The First-Time Home Buyers Incentive Program and an increase to the Home Buyer’s Plan.

The First-Time Homebuyer Incentive Program is scheduled to be launched in the fall of 2019 and we expect further details in the coming months as the program gets finalized.

Home Buyer’s Plan (HBP) has already been submitted making this program now active and eligible for qualified buyers. This increase to the HBP withdrawal limit will apply in respect of withdrawals made after March 19, 2019 given that the Purchase and Sale agreement was also signed after this date.

First-Time Home Buyers’ Plan

Currently, the Home Buyer’s Plan (HBP) allows first-time home buyers to 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$25,000 from their Registered Retirement Savings Plan to purchase or build a new home without having to pay tax on the withdrawn amount. Budget 2019 proposes to increase the HBP limit to $35,000 per first-time home buyer or $70,000 per couple. Clients that are going through the breakdown of marriage or common-law partnership will be permitted to participate in the HBP even if they are not first-time home buyers provided that the separated person lives separate and apart from their spouse or common law partner for at least 90 days.

Here’s an example of some of the ways this program could help you

Increased Eligibility:

If you have access to this program you can benefit from the flexibility of increasing your purchasing power by $10K. This provides leverage and further opportunities for you.

Decreased Payment:

An increase to the down payment by $10K will provide you approximately $50 per month in savings on your mortgage payments.

Reduced Income Qualification:

An increase to down payment allows you to qualify for slightly more home. In this specific circumstance if you are looking to buy a home for $500,000 you would need about $3K less in income by increasing your  down payment by $10,000.

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