First Time Home Buyer Incentives Change

Starting April 16 the government will raise the amount first-time homebuyers can withdraw from their RRSPs -- to $60,000 from $35,000 Starting August 1 2024, the Federal government will allow 30-year amortization periods on insured mortgages for first-time homebuyers purchasing newly built homes.

4/15/20241 min read

selective focus photography of jolly woman using peace hand gesture
selective focus photography of jolly woman using peace hand gesture

Enhancing First-Time Homebuyer Incentives: Paving the Way to Homeownership

Navigating first-time homebuyer incentives is crucial for those aspiring to own a home, especially amidst soaring real estate prices in places like Vancouver, BC. However, current policies may not fully address the needs of today's buyers.

Recent Incentives:

Starting April 16, the RRSP withdrawal limit for first-time homebuyers increases to $60,000 from $35,000. While this aims to boost financial flexibility, questions arise about prioritizing RRSPs over expanding contributions to the First Home Savings Account. Many first-time buyers lack substantial RRSP savings, making this adjustment less impactful.

On August 1, 2024, a change in federal policy allows 30-year amortization periods on insured mortgages for first-time buyers of newly constructed homes. While beneficial, this primarily helps those buying new properties. Extending this benefit to both resale and newly built properties would be a step in the right direction. The allure of prolonged amortization lies in its ability to mitigate immediate financial strain, translating to lower monthly mortgage payments.

Proposed Enhancements:

There's a need for a more comprehensive approach to facilitate entry into the housing market. Discontinuing the down payment assistance program overlooks its tangible impact, evidenced by its utilization in facilitating a significant percentage of insured purchases last year. Additionally, the purchase price cap restricts the program's reach. Reevaluating these thresholds and reinstating the down payment assistance program could make homeownership more accessible.

The Significance of Incentives:

First-time homebuyer incentives go beyond financial aid; they empower individuals. Alongside alleviating monetary burdens, they should offer robust educational resources to navigate homeownership complexities. Prospective buyers should explore available incentives to turn homeownership dreams into reality. In a challenging landscape, these incentives guide towards a more attainable housing future.