Summary of First Time Home Buyer Incentive – September 2019

  • First time home buyers incentive is a 3-yr plan from the government first-come-first-serve each year. A total of 1.25 billion of incentives will be given
  • Buyers will still need the original 5% down payment
  • Incentive application can start from Sept 2 however home cannot close until after Nov 1 to get incentive
  • This incentive is a shared equity mortgage with Government of Canada
  • Incentive loan will need to be repaid in 25 yrs or at the time of selling of home (Full repayment can also be done anytime)
  • Additional cost to buyers will be with lawyer as incentive loan will be registered as a second charge on home
  • Only first time home buyers can receive incentive: those who have never purchased a home or last 4 years did not occupy a home with spouse

How are eligible for this incentive?

  • Canadian citizens, permanent residents, non-permanent residents who legally work in Canada
  • Qualified income annually can be no more than $120k
  • Properties eligible: Owner occupied properties (new construction, re-sale homes)
  • Incentive given is 5% based on purchase price of home (pre construction homes purchases can receive 5% or 10%)

Scenario Example:

Purchase Price: $500,000

Downpayment 5%: $25,000

Incentive 5%: $25,000

Mortgage with incentive: $450,000

Purchasers with incentive can cut their mortgage cost by 150/month