Today, the government announced its intent to raise the minimum down payment requirements on homes valued over $500,000. Requirements will remain at 5 per cent down payment for homes under 500,000. Any amount over $500,000 will require a 10 per cent down payment. For example a $700,000 home will require a $45,000 down payment, 5 per cent on $500,000 and 10 per cent down on the remaining $200,000. The announced changes will take effect on February 15, 2016.
The government cites its desire to “contain risks in the housing market” as the reason for its decision.
As you know, the issue of an increase to minimum down payments is something CREA has effectively and successfully fought against since 2011. We are very disappointed with this decision and have communicated to the government and the media our concerns. That said, we believe the tiered approach the government is taking is preferable to an increase in minimum down payments for all consumers, given the importance of first time homebuyers to the market and the economy.
CREA will continue to advocate for homebuyers, sellers and members on this issue. Members should watch their inboxes and the REALTOR Action Network (RAN) for developments on this file.
Click the link to view a Letter to the Minister of Finance December 2015.
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