The Federal 2019 Budget announced a First-Time Home Buyer Incentive.
Under the Incentive, Canada Mortgage and
Housing Corporation (CMHC) will fund up to 10% of a first-time home buyer’s
purchase via a shared-equity mortgage (SEM). The Incentive amount is up
to $40,000 (10%) for a new home or $20,000 (5%) for an existing home.
The incentive would be repaid when the
home is sold, or in 25 years, whichever is first, but could be repaid earlier
if desired. The Incentive program will launch on September 2, 2019.
No legislation has been provided yet, so the details have yet to be worked out.
When the CMHC incentive is repaid, the
amount to be repaid will be the amount of the CMHC equity in the home. So
if it was a 10% incentive, they will be repaid 10% of the proceeds of
sale. If a 10% incentive was $40,000 and the home which cost $400,000 is
sold for $600,000, then $60,000 will be repaid. If the home is sold for
$360,000, then only $36,000 will be repaid.
The incentive is only available when first-time homebuyers purchase their first home with the intent to occupy the property.
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