The federal Liberal government hopes its 2019 budget paves the way for more people to be able to afford homeownership. Buying real estate for the first time in British Columbia has been unattainable for many due to the federal government’s mortgage stress tests rules. However, the new budget, through the Canada Mortgage and Housing Corporation (CMHC) will help keep some purchasers’ monthly payments lower by advancing them up to 10 per cent of the purchase price of a home. Buyers will need to have at least 5 per cent of the home’s price as a downpayment.
In order to qualify, a purchaser’s total household income must be less than $120,000 per year. CMHC is set to dole out more than $1 billion in incentives over a three-year period beginning this September. Homebuyers should know that this is a loan and will ultimately need to repay the money, but how that is to take place is yet unclear as is whether these loans are interest free.
There are many gray areas which still need to be ironed out. For instance, how will household income be calculated? How will home prices be affected by the new policy and what will it do to supply and demand? Also, does the new incentive pose a risk generally to taxpayers? These are questions being asked by those questioning the new policy and so far, the government has not provided the answers.
Buying real estate for the first time can be exciting as well as confusing. There are many laws that may need clarification. A British Columbia lawyer who is experienced in real estate law may be able to provide guidance when it comes to those areas of real estate legalities than seem perplexing. Erring on the side of caution and getting a lawyer’s advice before signing any contracts may be a wise decision.