How much do you know about the benefits of Canada’s first home purchase

There is a saying in Canada called “Tenants for Life — Tenants for Life”, which means that some people have no money to pay down payment and can only live their lives by renting a house. There are only two types of investments that will not be taxed in Canada. One is a tax-free account, but the amount is relatively small and limited. The second type is housing investment. When you sell a house, you don’t need to pay taxes on the part of the house price appreciation.

In fact, the Canadian government has formulated many favorable policies for those who are buying houses for the first time. For example, in RSP, the first time buyer can take up to $25,000 from RSP as the buyer’s down payment; land transfer tax, if you buy a house for the first time, you can refund up to $8000+ tax.

And just in 2019, CMHC Loan Bureau of Canada introduced a new favorable policy, which is to help people who buy a house for the first time pay a down payment. (First Time Home Buyer Incentive program) was officially implemented on September 2, 2019! With immediate effect, for first-time buyers to purchase second-hand houses, the Canadian Mortgage and Housing Corporation (CMHC) will provide a 5% subsidy of the house price. If you buy a new house or off-plan, the subsidy is as high as 10%!

Through this favorable policy, people can pay more down payment when buying a house for the first time, and the monthly loan amount will be reduced, greatly reducing the pressure on home buyers. Moreover, this part of the government subsidy has no interest, as long as it is paid in proportion to the original house price when the house is sold in the future.

Now Sara Qiao would like to introduce a few key points of this project:

1. This project is not indefinite. The government will allocate $1.25 billion for the entire project, which will take three years to implement, on a first-come, first-served basis.
2. When buying a second-hand house, the government will help you pay a down payment of up to 5%. When the purchase is uncompleted, the government will help you pay a down payment of up to 10%. However, for uncompleted projects, it must be handed over within 180 days to meet the requirements.
3. This project is only for Canadian citizens, Canadian residents, or people holding a Canadian work permit who buy a house for the first time. For couples who have already bought a house, those who have not bought a house can also enjoy this policy.
4. Since this policy is to help people who do not have enough funds to buy a house, the upper limit of the purchase amount is about $565,000. For the applicant’s income, first-time home buyers with an annual income of less than 120,000 Canadian dollars, and the loan amount cannot exceed four times the annual income. There is no need to explain too much about income. If one of the following conditions is met, they will be regarded as first-time buyers:
   -Never purchased a house before
   -Have purchased a house before, but there is a need to buy a house again due to divorce or separation
   -Not living in a house owned by the current spouse or common-law partner in the past 4 years
5. The amount of the house purchase loan must be above 80%, which means that the down payment ratio must be within 20%. In addition, applicants must purchase loan insurance, and the cost of loan insurance can be counted as part of the loan before being paid.
6. CMHC provides 10% of the purchase price of a house. Buyers must meet the minimum standard of insurance mortgage, which is a 5% down payment. I believe that through the content of this program, everyone has a lot of understanding of this latest favorable policy of CMHC! If you have any questions about this topic, you can leave a message to Jomo, Jomo will do his best to help everyone. Finally, if you want to know more about Canadian real estate topics, please feel free to contact us.