Original Article Posted by Real Estate Board of Greater Vancouver
Today’s Federal Budget 2019 includes initiatives for first-time buyers, renters and measures to prevent tax non-compliance and money laundering.
New First Time Home Buyer's Incentive
This new program allows first-time home buyers with a minimum down payment (5%) for an insured mortgage to apply to finance a portion of their home purchase through a shared equity mortgage with the Canada Mortgage and Housing Corporation (CMHC).
The federal government expects 100,000 first-time buyers will receive this incentive over the next three years.
There are no ongoing payments, which translates into lower monthly mortgage payments. For example, if a borrower buys a new $400,000 home with a five per cent down payment ($20,000) and a 10 per cent CMHC shared equity mortgage ($40,000), the borrower’s total mortgage is reduced to $340,000 from $380,000 for a savings of $228 on his or her monthly mortgage payment.
CMHC will offer qualified first-time buyers a 10 per cent shared equity mortgage for a newly constructed home or a five per cent shared equity mortgage for an existing home.
The incentive will be available to first-time home buyers with household incomes less than $120,000. Home buyers’ insured mortgages and the incentive amount can’t be greater than four times the home buyers’ annual household incomes.
Improved Home Buyers’ Plan
The plan’s withdrawal limit will be increased to allow participants to withdraw $35,000 from their RRSPs from the current $25,000. Partners will be eligible to withdraw $70,000 from the current $50,000.
Rental construction financing initiative
This new program will help build 42,500 new housing units across Canada through an additional $10 billion in financing over nine years.
Housing supply challenge
This $300 million initiative will go to communities and other groups that propose initiatives that break down barriers limiting new housing.
Expert panel on the future of housing supply and affordable
The federal and provincial governments will establish a panel focused on affordable housing and supply. Funding of $9 million over two years will support the panel’s work to develop housing supply modelling and related data collection.
Preventing money laundering in Canada’s housing market
New measures to prevent tax non-compliance and money laundering in the housing market include:
- four new dedicated real estate teams at the Canada Revenue Agency to monitor transactions in the real estate sectors;
- improved monitoring of private sector partners and collaborating with government leads to deter financial crime in real estate, including mortgage fraud and money laundering; and
- improved data sharing on real estate purchases between the federal and BC government to inform enforcement on tax compliance and anti-money laundering. This will include $1 million to Statistics Canada to streamline data sharing and monitoring of real estate purchases.