Q. My husband and I married recently, and we have lived together in a rental apartment since we got engaged and married. He has a condo, which he purchased seven years ago, but he has not lived there for the past three years. I’ve never lived in that condo and he didn’t use the Home Buyers’ Plan to purchase it. If we were to purchase a property together, to live in as our matrimonial home:
Am I eligible to use first-time homebuyer programs? How about my husband?
If I am eligible, but my husband is not, can I buy a joint property and I still use first-time homebuyer benefits?
–Meredith
A. There are a few first-time home buyer incentives from the federal and provincial governments. The Home Buyers’ Plan (HBP) allows a withdrawal of up to $35,000 from your Registered Retirement Savings Plan (RRSP) to use towards the purchase of a qualifying home. Both spouses can utilize the $35,000 limit if they qualify.
And to qualify, you must be a first-time home buyer, meaning you did not occupy a home that you or your spouse owned in the four years prior to buying a home. Since you never lived in your husband’s condo, you should qualify. Given he has not lived there for the past three years, he will qualify once he gets to the fourth year of not living in the condo.
To clarify, if you bought a new home in 2020, he would need to have not lived in the condo he owns after January 1, 2016. If he lived in the home in 2017, he may not qualify as a first-time home buyer until January 1, 2022.
There is a federal Home Buyers’ Amount that you may both be eligible for as well, Meredith. It uses the same four-year qualifying period as the HBP. The tax credit is $5,000, but the tax reduction or refund is only 15 % of that amount—so, $750. It is a non-refundable tax credit, so you must have tax owing in order to benefit from the tax savings.
Note that special rules may apply for both the HBP and Home Buyers’ Amount for persons with disabilities or people related to persons with disabilities.
The federal government also recently introduced a First-Time Home Buyer Incentive of up to 5% for resale homes, and up to 10% for newly constructed homes. However, in order to qualify, in addition to meeting the four-year ownership test, your annual income cannot exceed $120,000, and you cannot borrow more than four times your annual income.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
