On April 11, 2024, Finance Minister Chrystia Freeland announced homebuyer measures to be included in Budget 2024, which was tabled on April 16.
The measures
- Home Buyers’ Plan: the limit on RRSP withdrawals for a first home rises from $35,000 to $60,000, letting buyers save up to $25,000 more with RRSP tax benefits.
- 30-year amortization: first-time buyers purchasing newly built homes can take 30-year insured mortgages, effective August 1, 2024, five years longer than before.
- Repayment grace: people who withdraw under the Home Buyers’ Plan between January 1, 2022 and December 31, 2025 get three more years before repayments start, up to five years in total.
- Mortgage Charter: lenders are expected to offer permanent amortization relief, where appropriate, to eligible homeowners at risk.
The government also said more than 750,000 Canadians have opened a First Home Savings Account, which allows $8,000 per year up to $40,000.
What it means for Calgary buyers
A couple can now combine two Home Buyers’ Plan withdrawals and two FHSAs for a much larger down payment. The 30-year option lowers monthly payments, but only on new builds, which matters in a city with many new communities.
Home Buyers’ Plan withdrawal limit per person
How the down payment tools fit together
The Home Buyers’ Plan lets you withdraw money from your RRSP to buy or build a qualifying home and repay it over time. The government said the higher limit recognises that down payments are much larger today and take longer to save. It works alongside the First Home Savings Account (FHSA), launched a year earlier, which allows $8,000 a year up to $40,000 for a first down payment. As a simple example, one buyer using both could put up to $60,000 from an RRSP and $40,000 from an FHSA, or $100,000, toward a home; two buyers could put up to $200,000.
Other housing measures announced before the budget
Ottawa also said Budget 2024 would add $400 million to the Housing Accelerator Fund, which has signed 179 agreements to fast-track more than 750,000 homes over the next decade. Calgary signed its own agreement in November 2023, worth over $228 million, to fast-track more than 6,800 homes over three years. A new $6 billion Canada Housing Infrastructure Fund will help pay for water, wastewater and other services that new homes need, and the Apartment Construction Loan Program gets $15 billion in new loan funding for rental construction.
The details to know
The 30-year option applies only to insured mortgages, which usually means a down payment of less than 20%, and only to first-time buyers of newly built homes. The repayment grace period now gives buyers who withdraw from 2022 to 2025 up to five years before repayments start. The measures still need to be included in the federal budget, due to be tabled on April 16, 2024, and passed into law.
What it means in Calgary
Calgary’s benchmark price reached $597,600 in March 2024, and CREB reported under one month of supply. Larger down payments help, but with very little for sale, more money for buyers can also add to competition. The 30-year rule may be most useful in Calgary’s newer suburban communities, where builders sell many first homes.
Practical takeaways
- First-time buyers: open an FHSA if you have not already; contributions are deductible and growth is tax-free for a first home.
- New-build buyers: ask your lender how the 30-year option would change your payment and the total interest you pay.
- Couples: plan the RRSP withdrawals and repayments together, since each spouse has a separate limit.
Housing Minister Sean Fraser said the measures “are going to make it easier for young Canadians to save for their first home, and help bring down their monthly mortgage costs for new builds.” Keep in mind that a longer amortization lowers each payment but means paying more interest over the life of the mortgage.
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