Real Estate -> First-Time Home Buyer Incentive
First-Time Home Buyer Incentive (FTHBI)
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.
Be aware that if an existing home is purchased, and the home owner then puts a lot of money into renovations to the home, CMHC will participate in any increase in value that results from the renovations.
A call was made to CMHC's information line regarding the FTHBI, with 3 questions:
- what legislation lays out the details of the FTHBI?
- Will CMHC have to be repaid in the case of a deemed disposal?
- Could CMHC become liable for the BC Speculation & Vacancy Tax or the Vancouver Empty Homes Tax, if the homeowner becomes liable for either?
The person reached indicated that CMHC would not become liable for the BC Speculation & Vacancy Tax, but did not know the answers to the other 2 questions. A follow-up email has been sent to try to get answers.
For extensive details about the incentive, and a self-assessment tool to determine your eligibility, see First-Time Home Buyer Incentive on the CMHC website.
See also the 2019 Federal Budget information Introducing the First-Time Home Buyer Incentive.
See our Real Estate page for other incentives for home buyers and home owners.
If you're planning to purchase residential real estate in BC, see these articles as well:
If you're planning to purchase property in BC on which you plan to develop a farm, see
Revised: August 06, 2019
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