Date Posted: June 19, 2019
In the Budget Plan 2019 announcement made by the Liberal government earlier this spring, an announcement was made in regard to a new first time home buyers assistance program. Though at the time, few details were made available more information has now been released regarding the proposed $1.25 billion dollar equity sharing program.
The program, which gives the government stake in thousand of homes to ease the cost of home ownership, allow previous homeowners to qualify under certain conditions, permit purchases of a building of up to four units, and have a maximum purchase price of $565,000 based on government calculations among other parameters.
The program is slated to begin September 2, 2019 with first payments beginning November 1st, which means it would start just days before the potential start of the federal election campaigns where cost of living will likely be a central issue.
The program will be structured as a first come, first-served model which will have federal funds pick-up 5% of the mortgage for existing homes (10% for new construction) for households earning less than $120,000 per year on a mortgage no larger than $480,000.
The component of the first-time home buyers incentive that has been missing has been the issue of repayment terms for the interest free loan. The Liberals have now stated that no repayment of the loan is required until the homeowners sell OR 25 year of living in the home- which ever some first. Early repayment of the loan will carry no penalties.
The central piece that has also been in question is “how much” do homeowners have to repay? According the program, if the value of the home increases so does the amount of money owed. If the value decreases, the opposite will apply.