For many Canadians, getting their foot in the door of the real estate market is harder than ever. New stress test rules are making it harder to borrow. While recent years have seen the minimum down payment rules shift in favour of a larger lump sum. And that’s not even mentioning the current seller’s market climate with steep competition and rising real estate prices.
However, all is not lost and the dream of homeownership is still a viable possibility for millennials and their contemporaries.
Especially when we consider that a major part of the Liberal Party’s election platform hinged on policies targeted to help first-time buyers.
Let’s take a look at how some of these programs could help you reach homeownership in 2022:
The Tax-Free First Home Savings Account
Currently, Canadians can draw funds tax-free from their RRSP for a house downpayment, however, the catch is that they are then beholden to pay that money back after a certain period of time.
The Liberal Party has promised to implement a new type of savings account that will help first-time buyers save for a down payment without requiring them to repay. The account is designed for Canadians under 40 and will allow them to save up to $40,000 toward the purchase of their first home.
Additionally, if you save $40,000 but do not use the full amount for your down payment, the leftover funds will revert back to an RRSP.
Did you know that we host monthly webinars for first-time buyers? You can sign up for our latest webinar right here.
The Buyer’s Bill of Rights
In today’s competitive seller’s market, buyers can feel discouraged about bidding on properties. First-time buyers especially, since they are the ones with less experience and, in most cases, less purchasing power.
The Liberal Party’s Buyer Bill of Rights intends to soften some of these issues. Policies like a ban on blind bidding, establishing the legal right to a home inspection, and numerous clauses that improve the transparency of real estate transactions in favour of the buyer.
Ready to buy your first home? Take a look at some of our great resources for first-time buyers:
- How Will Rising Interest Rates Affect Buyers?
- Our Top 6 Milton Condos for First-Time Buyers
- Our Top 8 First-Time Buyer FAQs
Doubling the First-Time Home Buyers Tax Credit
A lot of Canadians rely on the First-Time Home Buyers Tax Credit to help with many of the extra expenses associated with buying a home. It’s a helpful resource to pay for things like closing fees, moving expenses, and more.
Currently, the tax credit is capped at $5,000 but the plan for 2022 is to increase it to $10,000.
Want to learn more about getting a mortgage? We spoke with some of our amazing mortgage broker contacts to answer some of the top questions you might have. You can read the post here.
Still Available: The First-Time Home Buyer Incentive
This program has been around for a while now and has seen some improvements made over the year. The incentive is a shared equity mortgage designed to help qualified first-time homebuyers enjoy a lower monthly mortgage payment without having to pay a larger lump sum down payment.
The incentive is shared with the Government of Canada. And the amount depends on the overall purchase price of your home. Although you are required to eventually pay back the investment, you are not required to pay interest or ongoing payments on the loan.
Get your buying journey started by downloading our Buyer’s Guide right here.
