‘It Will Not Be Missed:’ Ottawa Cancels First-Time Homebuyer Incentive

Globe and Mail ~ March 1st, 2024

Ottawa has discontinued its $1.25-billion program to help first-time homebuyers after struggling to attract prospective homeowners since its introduction in 2019.

The First-Time Home Buyer Incentive program provided shared-equity mortgages directly from the federal government for homebuyers. It was designed to make homeownership more affordable by reducing the size of the borrower’s mortgage, as well as their monthly payments.

But the requirements were considered unrealistic in the country’s most expensive markets of Vancouver and Toronto, where the typical home price is above $1-million.

Under the program Ottawa would provide 5 or 10 per cent of the home purchase price and the buyer would repay the government loan when they sold the property or within 25 years, whichever was sooner.

In order to qualify, a buyer’s household income could not exceed $120,000 a year. The income threshold was $150,000 for residents in Toronto, Vancouver and Victoria. In addition, the purchase price could not exceed $1-million and the borrower was required to pay for mortgage insurance, which protects lenders if the homeowner defaults on loan payments.

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