The First-Time Home Buyer Incentive Is Being Extended By The Feds For 3 More Years
The government is also planning to introduce a Tax-Free First Home Savings Account. 🏠
The First-Time Home Buyer Incentive is being extended for three more years to help people buy a home in Canada, the federal government announced.
In the new federal Budget 2022 that was released on April 7, the government revealed that the First-Time Home Buyer Incentive will now be available until March 31, 2025.
"The government is exploring options to make the program more flexible and responsive to the needs of first-time home buyers, including single-led households," it said.
With the First-Time Home Buyer Incentive, the government offers buyers 5% or 10% of a home's purchase price to put toward a down payment to lower mortgage carrying costs.
The program is a shared equity mortgage which means the government shares in the property value.
To try and make housing more affordable in Canada, other steps were proposed including doubling the First-Time Home Buyers' Tax Credit to $10,000 and providing up to $1,500 in direct support.
That would apply for homes purchased on or after January 1, 2022.
There is also a plan to introduce a Multigenerational Home Renovation Tax Credit which would provide up to $7,500 for constructing a secondary suite for a senior or an adult with a disability.
The government has pledged $475 million in 2022 and 2023 to provide a one-time $500 payment to those facing housing affordability challenges.
Also, there's a plan to create a Tax-Free First Home Savings Account so that people planning to buy their first home can save up to $40,000 without having to pay tax on withdrawals for down payments.