First-time Buyers' incentives... do they help GTA?

Wednesday May 08th, 2019


Taken from An article from CMHC...

1.  Improving Affordability Today: Support for First-Time Home Buyers

To help make homeownership more affordable for first-time home buyers, Budget 2019 introduces the 
First-Time Home Buyer Incentive.

•   The Incentive would allow eligible first-time home buyers who have the minimum down payment for 
an insured mortgage to apply to finance a portion of their home purchase through a shared equity 
mortgage with Canada Mortgage and Housing Corporation (CMHC).

•   It is expected that approximately 100,000 first-time home buyers would be able to benefit from 
the Incentive over the next three years.

•   Since no ongoing payments would be required with the Incentive, Canadian families would have 
lower monthly mortgage payments. For example, if a borrower purchases a new
$400,000 home with a 5 per cent down payment and a 10 per cent CMHC shared equity
mortgage ($40,000), the borrower’s total mortgage size would be reduced from $380,000 to
$340,000, reducing the borrower’s monthly mortgage costs by as much as $228 per month. Terms and 
conditions for the First-Time Home Buyer Incentive would be released by CMHC.

•   CMHC would offer qualified first-time home buyers a 10 per cent shared equity mortgage for a 
newly constructed home or a 5 per cent shared equity mortgage for an existing home. This larger 
shared equity mortgage for newly constructed homes could help encourage the home construction 
needed to address some of the housing supply shortages in Canada, particularly in our largest 

•   The First-Time Home Buyer Incentive would include eligibility criteria to ensure that the 
program helps those with legitimate needs while ensuring that participants are able to afford the 
homes they purchase. The Incentive would be available to first-time home buyers with household 
incomes under $120,000 per year. At the same time, participants’ insured mortgage and the Incentive 
amount cannot be greater than four times the participants’ annual household incomes.

Budget 2019 also proposes to increase the Home Buyers’ Plan withdrawal limit from $25,000 to
$35,000, providing first-time home buyers with greater access to their Registered Retirement
Savings Plan savings to buy a home.

2. Working Together: Increasing Housing Supply Through Partnerships and Targeted Investments

In some of Canada’s largest cities, many lower income and middle class Canadians are
struggling to find, maintain and afford a good place to live. Where housing supply is limited and 
new housing construction is not keeping up with demand, the cost to purchase or rent housing has 
risen to the point of unaffordability for many families. Increasing housing supply will help ensure 
that housing prices grow at a more moderate pace, keeping homeownership or renting more affordable 
for more Canadians and keeping markets accessible for future generations.

To help more Canadians find a good, affordable place to live, Budget 2019 proposes to:

Help build 42,500 new housing units across Canada, with a particular focus in areas of low 

rental supply, through an expanded Rental Construction Financing Initiative. Budget 2019 makes 

available an additional $10 billion in financing over nine years, extending the program until 

•   Invite communities and other groups to propose initiatives that break down barriers limiting 
new housing. This new Housing Supply Challenge will run through the Impact Canada Initiative, with 
funding of $300 million.

•   Get the best advice to increase housing supply that meets Canadians’ needs by supporting the 
recently announced Expert Panel on the Future of Housing Supply and Affordability, jointly 
established by the Government and the Province of British Columbia. CMHC will invest $4 million 
over two years to support the Panel’s work, and $5 million over two years for state-of-the-art 
housing supply modelling and related data collection.

3. Increasing Fairness: Strengthening Rules and Compliance in Canada’s Housing Market

Buying a home is often the single largest investment Canadian families will make in their lifetime. 
To protect this investment and help keep the real estate market accessible and fair, Budget 2019 
includes measures to tackle tax non-compliance and money laundering in the housing market. These 

•   Creating four new dedicated real estate audit teams at the Canada Revenue Agency to monitor 
transactions in the real estate sector. These teams will focus on high-risk areas, notably in 
British Columbia and Ontario.

•   Strengthening the enforcement framework by improving monitoring of private sector partners and 
collaborating with government leads in order to deter financial crime in real estate, including 
mortgage fraud and money laundering.

•   Exploring opportunities to improve data sharing on real estate purchases between the federal 
government and British Columbia to inform enforcement efforts on tax compliance and anti-money 
laundering. As part of this initiative, the Government will provide up to
$1 million to Statistics Canada starting in 2019–20 to conduct a comprehensive federal data
needs assessment to further streamline data sharing and monitoring of purchases of
Canadian real estate.

Delivering on Canada’s First National Housing Strategy

In 2017, the Government launched the country’s first-ever National Housing Strategy—a
$40 billion, 10-year plan to help Canadians access housing that meets their needs and that they can 

Since announcing the Strategy:

•   The National Housing Co-Investment Fund has been launched, which is expected to help build 
60,000 new units and repair or renew 240,000 existing units of affordable and community housing.

•   Seven provinces and territories have signed bilateral housing agreements under the new 
multilateral Housing Partnership Framework. These agreements will see more than
$7.7 billion in new federal funding flow to provinces and territories over the next decade, to 
support the stock of community housing and address regional priorities.

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