Financial aid for new home buyers
A recent survey reveals that many young first-time home buyers face financial challenges in the acquisition of a condo or house. They see the high cost of real estate, their personal revenue, as well as the required 5% down payment as major obstacles. The good news is that there exist some interesting incentive programs that could substantially help potential new home buyers realize their ownership dream.
Home Buyer’s Plan
The best known financial assistance program is the Home Buyers’ Plan or HBP. The HBP is a federal government program that enables buyers of a first home to borrow an amount up to $25,000 from their RRSP.
This loan is simply a non-taxable withdrawal that generally provides a home buyer with enough cash to meet the down payment required for the purchase of the property. The individual who uses the HBP will have 15 years to reimburse the full amount of the withdrawal.
Additionally, people who do not have RRSPs can request a loan from their financial institution in order to contribute to an RRSP and then have access to the HBP.
Municipal home ownership programs
In addition to the HBP, other programs exist to facilitate access to home ownership for future buyers. Municipal programs, for example, offer financial advantages to families who choose to settle in a particular city. Several municipalities offer incentives such as tax breaks and purchase cost rebates.
The city of Lévis, for example, offers new homeowner grants up to $5,000 for a single-family dwelling. In Laval, young families who buy an existing home or who build a new one will see their welcome tax (transfer duties) reimbursed. They can also benefit from a housing tax credit over a period of five years for a new house.
Montreal offers several advantages to families – and especially those with children – who settle in the city. The Home Ownership Program includes payments up to $12,500, depending on the applicable property. Additionally, the welcome tax is totally reimbursed for families with at least one child.
Home builders are also looking for ways to attract buyers. As competition gets tougher in the real estate market, many builders are offering incentive programs. The advantages vary, but one common option is the possibility of a smaller down payment, to which the builder adds a contribution.
This article was produced in collaboration with Banque Nationale Insurance.
Owning a home is one thing, insuring it is another. Given that the purchase of a home represents one of the most important expenses that a family can incur, it is crucial to insure your condo or your house. In case of an unfortunate event, you will have the assurance that your property and your civil responsibility are covered. In this way the effort and sacrifice that you have invested into the purchase of your home in the first place will be secured.
Stock images: Shutterstock
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