29 Mar Will the recent government announcements effect you as a home buyer?
Hot off the presses, we have a bunch of announcements in the pipeline from the Federal Government in the form of the 2019 Federal Budget that may affect the housing market. Let’s take a look under the hood at the new programs being proposed by the government, and the impacts that they may have.
CMHC First-Time Home Buyer Incentive
Appreciation based loans have been in existence in the Toronto market for over 25 years. Builders including Options for Homes and Daniels have offered these types of programs for first time home buyers, and arguably on move favourable terms. To learn more about an active mortgage assistance program, please visit www.OptionsForHomes.ca – we are currently working with them on selling a pre-construction project called The Humber in Toronto in Weston that offers up to a 15% assistance loan – and it’s available now, instead of next fall!
Increase to Home Buyers Plan Contribution
This was widely anticipated – the Home Buyers Plan currently allows first time home buyers to extract up to $25,000 out of their RRSP per person to contribute towards their first home purchase. This amount must be repaid within 15 years, but it is tax-free at the time it is withdrawn. The value of the tax exemption has been reduced over the years due to appreciation in housing prices and overall inflation. The new plan calls for an increase to $35,000 to allow for a larger downpayment to be sheltered from taxes. While the added contribution space is terrific, the timeline to repay the funds into your RRSP has been kept at 15 years… So while this is a helpful measure, it comes at a price of potentially higher repayments to be made.
On a much more grounded level, we have seen a very strong uptick in buying activity and competition in the past two weeks. Bidding wars and bully offers are coming back into fashion after nearly 24 months without them. We anticipate this trend to accelerate now that the deep freeze of winter is finally melting away and more inventory is coming to market.
If you or anyone you know is looking to buy or sell, please let us know and we are happy to provide a current market update as we head into the spring market.