The federal budget unveiled a multi-pronged approach to housing affordability yesterday. How will it affect you?
Firstly, there is an incentive program that could lower mortgage payments for households making less than $120,000 per year. Prospective buyers can also apply to finance between five and 10 per cent of their mortgage via a shared equity program administered by Canada Mortgage and Housing Corporation (CMHC), interest-free. This billion-dollar-plus initiative offers funding of 10 per cent of the purchase price of new-build homes and five per cent of the purchase of resale homes. The budget document said that this loan could reduce monthly mortgage payments up to $228 per month on a $400,000 new-build home. The loans will be repayable when the mortgage is repaid.
The government is also increasing the amount that first-time buyers can withdraw from their RRSPs, from $25,000 per individual to $35,000 — or $70,000 per couple. In a new measure, the Home Buyer’s Plan now applies to non-first-time buyers who experience a breakdown in marriage or common-law partnership.
Furthermore, the government said they want to increase home supply and they are vowing to look into ways to monitor and target tax evaders and those who use real estate to launder money, in an effort to bring down housing prices. The Liberals are vowing to build 42,500 new housing units in low-supply areas for rentals over the next nine years.
With more than 30 years of experience in the real estate market, it would be my pleasure to discuss these new changes with you.