Officially launched in September, the First-Time Home Buyer  Incentive was created to help qualified first-time home buyers reduce their monthly mortgage payments. Overall, the First-Time Home Buyer Incentive was created to make owning a home for the first-time a reality.

So, how does the First-Time Home Buyer Incentive actually work?

The incentive is not interest-bearing and does not require ongoing payments. The incentive helps to create a more affordable monthly mortgage payment for the first-time home buyer. The Government of Canada will offer incentives for:

  • 5% of a first-time buyer’s purchase of a re-sale home
  • 5% or 10% for a first-time buyer’s purchase of a new construction

It is important to remember that the first-time home buyer will need to repay the incentive. The first-time home buyer can repay the incentive in full at any time or if the property is sold after 25 years — whichever happens first. The repayment of the incentive is based on the property’s current fair market value, multiplied by the incentive percentage amount:

  • If they received a 5% incentive and the value of the home increased to $300,000, the payback would be $15,000
  • If they received a 10% incentive and the value of the home decreased to $150,000, the payback would be $15,000

How to know if your client can actually qualify for the First-Time Home Buyer Incentive?

  • Are they a Canadian citizen, permanent resident or a non-permanent resident who is legally authorized to work in Canada?
  • Do they have a maximum qualifying household income of $120,000 per year?
  • Is at least one borrower is a first-time home buyer?

Additionally, a first-time home buyer can come in many different forms:

  • Has never purchased a home before
  • Experiencing a breakdown of a marriage or common-law partnership
  • In the last four years, did not occupy a home with a current spouse or common-law partner that either owned.

Please click the button below for more information on the First-Time Home Buyer Incentive: