Federal Budget – April 2024

Dated: April 24 2024

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Budget Nuggets Just Announced for Homebuyers & for Homeowners

After weeks of announcements, teases, and leaks, on April 16th, the Federal Government Budget announced new initiatives aimed at helping first-time homebuyers and homeowners. While final details are likely still being worked out, and the budget will need to be passed by the House of Commons, here’s what we know so far:
 
Expanded Homebuyers’ Plan
As of budget day, first-time home buyers will be able to withdraw $60,000 from an RRSP to buy a home. That’s up from $35,000. And the grace period to repay the loan has been extended by an additional three years. People who have made withdrawals between Jan. 1, 2022, and Dec. 31, 2025, will now have five years to begin repayment of the loan.

The Federal Government has indicated that these changes are meant to work in tandem with the First Home Savings Account, which it launched last year. The rules governing that program allow for an annual $8,000 contribution cap, with a lifetime limit of $40,000. Prospective homebuyers must use the accumulated funds within 15 years once they open an account. 

New Mortgage Rules with Longer Amortizations
Coming August 1st, first-time homebuyers will be able to take advantage of 30-year amortization periods on insured mortgages for purchasing newly built homes. Increasing the amortization period from 25 to 30 years translates into lower monthly payments. And it seems that there is a formalization of the Government's - Canadian Mortgage Charter to facilitate stressed borrowers by extending amortization periods  for existing mortgage borrowers.
 
Ability to Leverage Rental Payment History
In much the same way that Credit Scores are influenced by those who pay-down a mortgage, renters will be able to use their rent payment history to improve their Credit Score. A better Credit Score aims to help buyers qualify for a mortgage and likely lock-in better rates.
 
Easier for Homeowners to Add Secondary Suites
Budget 2024 proposes a new Secondary Suite Loan Program to enable homeowners to access up to $40,000 in a low-interest loan to add a secondary suite to their home. 
 
The announcement builds on the Multigenerational Home Renovation Tax Credit, which launched in 2023. The value of the credit is 15% of qualifying expenditures up to $50,000 and provides up to $7,500 for constructing a secondary suite for a senior or an adult with a disability.
 
More Homes… Faster
The Budget announcement also includes ambitious plans to have 3.87 million new homes built by 2031, bring down the costs of homebuilding, and help cities make it easier to build homes at a faster pace.

Want information on how the 2024 Budget could impact market activities?

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David DeDominicis

Buying or selling real estate is a big decision - you need an experienced professional to guide you through the process. When you work with me, you can count on personal, attentive, patient service, e....

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