Mortgage Reform

The Home Buyers’ Plan

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a specified disabled person. Currently the HBP withdrawal limit is $60,000.

GST/HST New Housing Rebate

As per the Canada Revenue Agency, a house can be eligible for the GST/HST and/or applicable provincial new housing rebate if it “includes a detached or semi-detached single-unit house, a duplex, a condominium unit, a townhouse, a unit in a co-operative housing corporation, a mobile home (including a modular home), and a floating home. It may also include the land around and underneath the house that is reasonably necessary for its use and enjoyment as a place of residence. This is generally up to one half hectare (1.23 acres) and may include nearby buildings such as a detached garage or shed.”

The Government of Canada has prepared a very detailed and informative web page, providing information about the CRA GST/HST housing rebate. Please visit their site to learn more.

New Mortgage Rules for Canadians     

• Increasing the $1 million price cap for insured mortgages to $1.5 million, effective December 15, 2024, to reflect current housing market realities and help more Canadians qualify for a mortgage with a downpayment below 20 per cent. Increasing the insured-mortgage cap—which has not been adjusted since 2012—to $1.5 million will help more Canadians buy a home. 
  • This measure would apply to all borrowers requiring high loan to value mortgage insurance in Canada and must satisfy the following requirements:
    • The total loan to value is greater than 80 per cent;
    • The value of the eligible residential property against which the loan is secured must be less than $1.5 million; and,
    • The downpayment requirements for the loan are as follows:
      • 5 per cent on the portion of a purchase price up to $500,000.
      • 10 per cent on the portion of a purchase price between $500,000 and $1.5 million.

• Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers and to all buyers of new builds, effective December 15, 2024, to reduce the cost of monthly mortgage payments and help more Canadians buy a home. By helping Canadians buy new builds, including condos, the government is announcing yet another measure to incentivize more new housing construction and tackle the housing shortage. This builds on the Budget 2024 commitment, which came into effect on August 1, 2024, permitting 30 year mortgage amortizations for first-time homebuyers purchasing new builds, including condos. 
  • This measure will apply to borrowers requiring high loan to value mortgage insurance in Canada and must satisfy the following requirements:
    • The total loan to value is greater than 80 per cent; and,
    • The borrower is either: (i) a first-time homebuyer; or (ii) purchasing a newly constructed home.
  • As the government announced on June 11, 2024, to be considered a first-time homebuyer, a borrower must meet one of the following criteria:
    • The borrower has never purchased a home before;
    • In the last 4 years, the borrower has not occupied a home as a principal place of residence that either they themselves or their current spouse or common-law partner owned; or,
    • The borrower recently experienced the breakdown of a marriage or common-law partnership. On this point, the regulations will follow the approach that the Canada Revenue Agency has taken with respect to the Home Buyers’ Plan.
  • As the government announced on June 11, 2024, to be considered a newly constructed home, the new home must not have been previously occupied for residential purposes. This requirement is not intended to exclude newly constructed condominiums where there has been an interim occupancy period.

• Other Parameters  

  • Effective date: These measures will be available for mortgage insurance applications that lenders submit to mortgage insurers on or after December 15, 2024.
  • These measures will only apply to high loan to value mortgages on properties occupied by the borrower or a close relative.
  • All other eligibility criteria for government-guaranteed mortgage insurance will continue to apply.

First Home Savings Account (FHSA)

A first home savings account (FHSA) is a registered plan which allows you, if you are a first-time home buyer, to save to buy or build a qualifying first home tax-free (up to certain limits).

Canada Secondary Suite Loan Program

On December 10, 2024, the Government of Canada, announced “it will double the loan limit for the Canada Secondary Suite Loan Program to $80,000, and launch the program in early 2025. This will make it easier for homeowners to convert an unused basement into a rental apartment or a garage into a laneway home to increase density in our communities.”

“By doubling the loan limit from $40,000 to $80,000, more homeowners will be able to access the low-interest financing they need to add a secondary suite to their home. This will make it cheaper for homeowners to do so through 15-year loan terms at a low-interest rate of just 2 per cent.”

“In addition to the Secondary Suite Loan Program, homeowners will also be able to refinance with insured mortgages to help cover the cost of adding a secondary suite, starting January 15, 2025. Specifically, lenders and insurers will begin allowing mortgage refinancing of up to 90 per cent of the post-renovation value of their home up to $2 million, amortized over a period of up to 30 years. Homeowners will be able to make use of both the loan program and mortgage financing to help cover the cost of adding a secondary suite.”

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