FEDERAL BUDGET SUMMARY – 2019
This measure will apply to 2019 and subsequent taxation years. The annual
accumulation to the notional account will start based on eligibility in respect of
the 2019 taxation year and the credit will be available to be claimed for expenses
in respect of the 2020 taxation year.
HOME BUYERS’ PLAN
Budget 2019 proposes to increase the Home Buyers’ Plan withdrawal limit to
$35,000 from $25,000 for first-time home buyers. This increase to $35,000 will
also apply to the Home Buyers’ Plan rules facilitating the purchase of an accessible
home suited for the care of an individual eligible for the disability tax credit (even
if first-time home-buyer requirement is not met).
This increased limit will apply to the 2019 and subsequent calendar years in
respect of withdrawals made after March 19, 2019.
Budget 2019 also proposes to extend access to the plan in order to help Canadians
maintain homeownership after the breakdown of a marriage or common-law
partnership; this measure will be applicable to withdrawals made after 2019.
NEW FIRST-TIME HOME BUYER INCENTIVE
Budget 2019 proposes to introduce the First-Time Home Buyer Incentive. The
incentive enables home buyers to reduce the amount of money required from an
insured mortgage without increasing the amount they must save for a down
payment. Canada Mortgage and Housing Corporation (CMHC) would offer
qualified first-time home buyers a 10-percent shared equity mortgage for a newly
constructed home or a 5-percent shared equity mortgage for an existing home.
The incentive would be available to first-time home buyers with household
incomes under $120,000 per year. At the same time, participants’ insured
mortgage and the incentive amount cannot be greater than four times the
participants’ annual household incomes.
More details about CMHC’s First-Time Home Buyer Incentive and funds to assist
other providers of shared equity mortgages will be released later this year, with
the programs expected to be operational by September 2019.
MNP INSIGHT: It is not clear whether the amount to be repaid to CMHC on
a future sale of a property would require repayment of the original debt or
repayment of the “equity interest” if this amount is greater than the debt.