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First-Time Home Buyer Incentive – 2019

The Government of Canada has introduced a new incentive for first-time home buyers in 2019. The incentive launches September 2nd 2019 to start accepting applications, allowing closing dates after November 2nd, 2019 to be allowed to access the incentive, if eligible.

There is a lot of information on the Government website, but it breaks it down pretty well. Here’s the short version of it:

  • If you are a first time buyer and purchase a resale home, you could be eligible for up to 5% of the cost of the home as an incentive.
    A good example would be if the house were to cost $300,000, you would be eligible for up to $15,000 from the Government as an incentive.
  • If you are a first time buyer and purchase a new construction home, you would be eligible for up to 10% of the cost of the home as an incentive.
    As an example, if the house were to cost $300,000, you would be eligible for up to $30,000 from the Government as an incentive.
I’m sure you’re asking, what are the conditions? Great question!
Here’s the criteria that makes you eligible as a first-time home buyer:
  • You must be a Canadian Citizen, permanent resident or non-permanent resident who are legally authorized to work in Canada.
  • There is a maximum amount of income to qualify
    • Your total income must be $120,000 per year or less
    • Also subject to the qualifying income set out by lenders and mortgage loan insurers
  • Only one borrower must be a first-time home buyer
What is a first-time home buyer?
  • Never purchased a home before
  • You have gone through a breakdown of marriage or common-law partnership (you don’t have to meet the other first-time home buyer requirements)
  • In the last 4 years, you didn’t occupy a home that you or your current spouse/common-law partner owned

Keep in mind that it is possible that you or your spouse/common-law partner qualifies for the First-time home buyer incentive, even if you’ve owned a home.

What is a 4 year period and how does it work?

The 4 year period begins every January 1st of the 4th year before you purchased your home. It ends 31 days before the date you purchase your new home.


If you purchase a home on June 30, 2016, the 4 year period begins January 1, 2016 and ends February 28, 2020.

If you sold the house you lived in back in 2014, you may be eligible to participate in 2019 or if you sold the home in 2015, you may be eligible to participate in 2020.

Other qualifications to consider
  • The total borrowing amount is limited to 4 times the qualifying income. That means that the combined mortgage and incentive amount cannot exceed four times the total qualifying income. The mortgage loan insurance premium is excluded from this calculation.
  • The maximum threshold for debt service ratios are GDS (Gross debt service ratio) 39% and TDS (Total debt service ratio)  44%. GDS includes your mortgage payments, property taxes, heating costs and 50% of condo fees divided by annual income. TDS includes your housing expenses (from GDS) credit card expenses, car payments and loan expenses divided by annual income.
  • The incentive is a second mortgage on the title of the property. There are no regular principal payments. The incentive isn’t interest bearing and has a maximum term of 25 years.
  • The Government of Canada shares the upside and downside of the property value upon repayment. So, if the value of the property goes down when you sell, the reimbursement is the 5 or 10% of the price you paid. However, keep in mind, that if the value of the property increases, so does the repayment of the incentive.
  • The maximum purchase cost of the house can only be up to $480,000 (based on the criteria of up to $120,000 total qualifying income)

This is a summary of the First-Time Home Buyer Incentive that has been proposed by the Government of Canada. This would come into effect as of September 2nd, 2019. Keep checking their website for more details as the date is coming up shortly. This presents an opportunity for individuals/families to save on their mortgage payments and get into the housing market. Windsor is a great community with many properties that fall within the criteria of the incentive.

Here is the link to the National Housing Strategy website: First-Time Home Buyer Incentive