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First-Time Home Buyer Incentive (FTHBI)

The First-Time Home Buyer Incentive has been discontinued, and the deadline for new or updated submissions is midnight ET on March 21, 2024. See First-Time Home Buyer Incentive on the CMHC website.

Under the Incentive, Canada Mortgage and Housing Corporation (CMHC) will fund up to 10% of a first-time home buyer's purchase via a shared-equity mortgage (SEM). The Incentive amount is up to $40,000 (10%) for a new home or $20,000 (5%) for an existing home.

The incentive would be repaid when the home is sold, or in 25 years, whichever is first, but could be repaid earlier if desired. The Incentive program launched on September 2, 2019.

When the CMHC incentive is repaid, the amount to be repaid will be the amount of the CMHC equity in the home. So if it was a 10% incentive, they will be repaid 10% of the proceeds of sale. If a 10% incentive was $40,000 and the home which cost $400,000 is sold for $600,000, then $60,000 will be repaid. If the home is sold for $360,000, then only $36,000 will be repaid.

The incentive is only available when first-time homebuyers purchase their first home with the intent to occupy the property.

Be aware that if an existing home is purchased, and the home owner then puts a lot of money into renovations to the home, CMHC will participate in any increase in value that results from the renovations.

An inquiry was made to CMHC's call centre regarding the FTHBI, with 3 questions:

1. What legislation lays out the details of the FTHBI?

A: The FTHBI is granted by CMHC as the Program Administrator in accordance with section 57 of the National Housing Act (Canada).

2. Will CMHC have to be repaid in the case of a deemed disposal - for instance, if a home owner changes the use of their home from principal residence to rental home?

A: A change in occupancy does not trigger repayment of the Incentive. However, the intent of the program is to help first time homebuyers purchase their first home with the intent to occupy the property. Additional events throughout the life of the Incentive may trigger repayment such as default under the first insured mortgage or misrepresentation for eligibility under the FTHBI Program.

3. Could CMHC become liable for the BC Speculation & Vacancy Tax or the Vancouver Empty Homes Tax, if the homeowner becomes liable for either?

A: The Incentive is registered as a second ranking mortgage, CMHC as the Program Administrator is not registered in title to the property.

For extensive details about the incentive, and a self-assessment tool to determine your eligibility, see First-Time Home Buyer Incentive on the CMHC website. The article includes a calculator.

See also the 2019 Federal Budget information Introducing the First-Time Home Buyer Incentive.

See our Real Estate page for other incentives for home buyers and home owners.

If you're planning to purchase residential real estate in BC, see these articles as well:

BC Property Taxes

BC Speculation and Vacancy Tax

If you're planning to purchase property in BC on which you plan to develop a farm, see:

Farm Status in British Columbia - Understanding the Regulation

Tax Tip: Know ALL the details of the incentive prior to participating.

Revised: September 20, 2024