Federal Budget 2024 helps home buyers and renters
The Canadian government has announced a comprehensive set of measures in the Federal Budget 2024 to address the housing affordability crisis and improve access to affordable housing across the country. Here is an overview of the key initiatives:
Budget 2024 highlights
The Canadian government has announced a comprehensive set of measures in the Federal Budget 2024 to address the housing affordability crisis and improve access to affordable housing across the country. Here is an overview of the key initiatives:
- Effective April 16, there are significant updates to the Home Buyers’ Plan (HBP) in Canada. Home buyers now have the option to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) for a downpayment, an increase from the previous limit of $35,000. This federal program allows Canadians to withdraw funds tax-free from their RRSP to purchase or build a qualifying home. The borrowed amount must be repaid within 15 years. Additionally, home buyers now have five years before they must start repaying the borrowed amount, compared to the previous two years. This extension applies to withdrawals made between 2022 and 2025, offering more flexibility for repayment.
- The Home Buyers’ Plan complements the government’s Tax-Free First Home Savings Account, which permits Canadians to contribute up to $8,000 annually towards their first downpayment. The lifetime contribution limit for this account is $40,000. These updates aim to support first-time home buyers and enhance affordability in the housing market.
- Starting August 1, 2024, first-time home buyers purchasing newly built homes in Canada will have the option to amortize their mortgage over 30 years, an increase from the previous limit of 25 years. This change provides home buyers with greater flexibility in managing their mortgage payments and affordability.
- The Canadian Mortgage Charter introduces permanent amortization relief for eligible existing homeowners. This relief allows homeowners to reduce their monthly mortgage payments to an affordable amount by extending the length of time for repayment.