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A new incentive for the purchase of a first property

by

Aurélia Morvan

29 July 2019 13:30

Photo : Freepik

The government of Canada announced the creation of the Incentive to the purchase of a first property. It aims to help middle-class Canadians to make the purchase of their first piece of real estate ” by reducing the monthly mortgage payments required without increasing the amount that they have to save for a downpayment “, explains in a press release the Company canadian mortgage and housing corporation (CMHC).

Up to $ 286 in savings per month

“The incentive will allow buyers of a first home eligible who have the minimum downpayment required to obtain a mortgage loan insured by CMHC, Genworth or Canada Guaranty to request the government of Canada to fund part of the purchase of a property through a form of mortgage with participation “, explains the canadian authority on housing. The incentive will be 5 % for the purchase of existing homes and 5% to 10% for the purchase of a new home. “For a family making the purchase of a property of $ 500,000, this program would allow him to make a saving of up to $ 286 a month, or more than 3 430 $ per year,” CMHC advance.

The incentive will be without interest and may be repaid at any time, but shall in all cases be after 25 years or upon sale of the property. It will be offered to first-time homebuyers whose annual income eligible household does not exceed 120 000 $. Its launch is scheduled for September 2, 2019.

Two other incentives in 2019

This new incentive is in addition to the two measures of the budget of 2019, aimed at helping newcomers to pay their money, ” notes the CMHC.

First of all, the government has increased to $ 10,000 the ceiling for withdrawal without tax consequence authorized a registered retirement savings plan (RRSP) under the home buyers ‘ Plan the property. Because of this, since march 20, 2019, each and every Canadian wishing to buy or build a property may remove up to$ 35,000 per year from his RRSP without having to pay tax on this sum. Before this date, the amount of the withdrawal was limited to $25,000.

The other measure introduced in the budget in 2019 is the Fund of assistance to providers of mortgage loans with participation. In the framework of this program, Canadians and organizations are eligible to receive a loan in one of two funding streams; the pane preconstruction, and the direct provision of mortgage loans with participation. It will be launched on 31 July next.

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