Do you want to buy a property in Montreal? As you know, this is a huge expense. In addition, it is no longer a secret that homeownership is a difficult journey for young professionals and families.
With a view to reversing this trend and supporting those who finally wish to become homeowners, the federal and provincial governments have decided to implement certain measures and financial assistance. Do not hesitate to inquire to know your eligibility.
The residential acquisition support program
This very advantageous program allows several types of households to obtain financial assistance for many types of properties, whether they are new or already existing.
Are you a new owner?
If you have never owned a home in Quebec or have not been one in the 5 years preceding your request for financial assistance, you could receive with the purchase of a new property:
- A lump sum of $5,000 for households without children with one or more buyers ;
- A lump sum of $10,000 for an owner outside the city center or an amount of $15,000 for a home in the city center for households with at least one child under the age of 18 (or to be born or be adopted within 9 months of purchase).
Households with at least one child under the age of 18 who wish to purchase an existing property could receive a transfer tax refund, valued between $5,000 and $7,000.
Are you already an owner?
If you buy a new home when you already own or have owned it within the past 5 years, you are eligible to receive:
- a refund of transfer taxes for the purchase of an existing property, if you have a dependent child under 13 or if you will become the parent of a child (adopted or unborn) within the following 9 months acquisition;
- a lump sum for the purchase of a new house, again on the condition that your family consists of at least one child under the age of 13.
Apart from the criteria mentioned above, it is also essential to send your grant application no later than 6 months after the date of registration of the deed in the land register.
Finally, remember that this type of subsidy can be combined with other forms of financial assistance, whether these are offered at the provincial or federal level. It should be noted that in order to benefit from it, the property purchased must be part of the following categories:
- Single-family home;
- a rental building with 2 to 5 units above ground;
- a divided co-ownership.
Need more information regarding the submission of your grant application? Find more information on the website of the city of Montreal.
The tax credit for the purchase of a home
The provincial government offers a non-refundable tax credit to anyone who purchases a home for the very first time (and plans to make it their primary place of residence in the following year) or in order to make it the home of a disabled person. Note that this tax credit can be divided between several people and that you must reside in Quebec on December 31 of the tax year in question to be entitled to it.
In this second scenario, it is important to mention that the development work to make the house accessible and functional to the disabled person you will welcome must be within 12 months of the purchase.
In the event that you have left Canada, additional conditions may be required to access the tax credit. The same applies if the latter is requested for a person who died during the tax year. Also important: the person making the request must not have lived in a house that they or their spouse owned during the previous 4 years.
The types of eligible properties are as follows:
- mobile home ;
- manufactured home;
- individual house;
- semi-detached, single or row-house;
- apartment in a multi-unit residential building;
- apartment in a condominium building.
In the event that the property is intended for a disabled person, it must comply with two criteria:
- be in an environment that responds more favorably to the person's needs or to the care that their condition requires;
- help improve their quality of life and independence.
The first-time home buyer incentive
Regarding the first-time home buyer incentive, note that this offers new buyers an amount equivalent to 5% or 10% of the purchase price to help them raise the money needed to the down payment.
Concretely, this assistance is in fact a mortgage loan with participation. What does this mean exactly? Quite simply that you can borrow an amount equivalent to one of the percentages mentioned above on condition that you then repay this same percentage according to the value of the property at the time of the sale (if you possibly sell the house) or, if applicable, 25 years after purchase.
Therefore, if you buy a home valued at $300,000 and you qualify for a 10% incentive, then you will have $30,000. If the value of your home increases to $350,000, you will have to pay back $35,000. However, if the value of your home for some reason goes down and reaches $250,000, you will have to pay back $25,000 instead.
Note that the percentage of the incentive that will be granted to you will usually be 5%, unless the house concerned is a new construction. In this case, you are potentially eligible for 10% aid.
In order to take advantage of the first-time home buyer incentive, you must (no big surprise) be considered a first-time home buyer. You are considered as such if you:
- have not lived in a house that you or your spouse have owned for the past 4 years;
- are recently separated or divorced (even if you do not meet the other criteria);
- haven't bought a home in the past.
At the same time, you will also have to meet other eligibility criteria:
- your loan does not exceed four times your eligible income;
- your down payment comes from a traditional fund;
- your annual income is not more than $120,000;
- you are a Canadian citizen, permanent or non-permanent resident, but authorized to work in Canada.
The SHDM Accès Condos program
Set up by the Société d'habitation et de développement de Montréal, this program is intended to be a financial tool to facilitate the purchase of a condo or divided co-ownership in the greater city. It comes in two formulas: the current formula and the exclusive formula.
The current program formula is accessible to everyone, both for first-time buyers and for those who are already owners. It provides a 10% purchase credit for the down payment required to acquire the property, provided that a deposit of $1,000 is paid by the buyer.
Good news: this program can also be combined with other financial assistance offered by the city of Montreal. One does not exclude the other!
You can get more information about this program by visiting this page.
The tax credit for the purchase of a property
Apart from the financial assistance we just mentioned, it is relevant to know that it is possible to obtain $5,000 for the purchase of a house acquired during the year if:
- you have not lived (this year and for the 4 previous years) in another property that you or your spouse owned;
- you or your spouse have purchased an eligible home.
The home buyers' plan
Obviously, if you want to acquire a new property, note that you will be able to take advantage of the recent changes to the home buyers' plan. In fact, the withdrawal limit has now been increased to $35,000. Do not hesitate to inquire more about this subject to find out if you meet the eligibility criteria.
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