Buying a home can be challenging, especially when you’re saving up for a down payment based on higher property values in a hot market, as well as budgeting for closing costs, furniture, home improvements and so on. Fortunately, there were a number of new and renewed initiatives included in the 2022 federal budget that could benefit homebuyers. If you’re considering buying a home, ask your mortgage agent about your financing options plus any incentives or rebates available through the government aimed at making your purchase more affordable.
5 housing-related highlights from the federal budget:
- Tax-Free First Home Savings Account. Beginning in January 2023, this new account will allow prospective homebuyers to contribute up to $40,000 ($8,000 per year) to put towards a first home purchase. Withdrawals and returns will be tax-free as long as the funds are used to purchase a home.
- First-Time Home Buyers’ Tax Credit Doubled. The credit is increased to $10,000, which will result in a benefit of up to $1,500 to support homebuyers. It’s applicable to homes purchased on or after January 1st, 2022.
- First-Time Home Buyer Incentive Extension. The three-year shared-equity program administered by Canada Mortgage and Housing Corporation (CMHC) has been extended to March 31st, 2025 from its original expiration date of this September. It offers: 5% or 10% for a first-time buyer’s purchase of a newly-constructed home; 5% for a first-time buyer’s purchase of a resale (existing) home; or 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home.
- Multigenerational Home Renovation Tax Credit. The credit, which begins in 2023, will provide up to $7,500 in support for building a secondary suite for a senior or an adult with a disability, and will begin in 2023.
- Home Buyers’ Bill of Rights. The government plans to follow through with its election promise to end the practice of blind bidding as part of the development of a Home Buyers’ Bill of Rights, which will be created in conjunction with the provinces. The budget indicated this bill of rights could also include ensuring a legal right to a home inspection and transparency on the history of sale prices on title searches.
Have questions about these budget items or your mortgage options in general? Answers are a call or email away!