Is now a good time to buy a house? Could be

The COVID-19 pandemic has created economic uncertainty, causing Canadians to hit the pause button on many aspects of everyday life.

Buying a new home may be the furthest thing from your mind right if you’ve been laid off or face employment uncertainty. On the other hand, if your income sources are secure, it might be a good time to consider a new home purchase, especially while mortgage interest rates are rock bottom.

Chris Guérette, CEO of the Saskatoon & Region Home Builders’ Association (SRHBA), says there are “a lot of great opportunities” for families who are still in a position to buy a new home.

Due to COVID-19, the Saskatchewan Real Estate Association has prohibited real estate agents from holding open houses and new home builders are also following this protocol, in an effort to safeguard the community.

Extensive photo galleries are available on most builders’ websites. Some real estate agents provide virtual tours of homes. Builders are also taking appointments for private viewings of show homes.

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“If what you see interests you, the websites have all of the builders’ contact information. Some of those builders will also be available for online conversations via Skype or FaceTime,” Guérette says.

“During this crisis it doesn’t mean that everything needs to be on hold. There are actually some really cool solutions out there that builders are utilizing and you can still continue to have those conversations and start planning.”

If you are looking to buy now, a number of housing incentive programs developed by the provincial and federal governments have recently been put in place to assist new home buyers.

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On March 18, in its scaled-back 2020-21 budget, the Saskatchewan government announced a three-year PST rebate program for the new housing sector.

Effective April 1, the program rebates up to 42 per cent of the PST paid on a newly-constructed, previously unoccupied home. The rebate is calculated on a sliding scale on a newly-constructed home with a total price of less than $450,000, before taxes and excluding the value of the land. The cost of major appliances is included in the contract price of the new home.

To explain how the rebate program works, Guérette provides the example of a new home purchased at $470,000. “Let’s assume the price of the land was $120,000. That means the contract price of the house is $350,000. The PST payable on the home would be $21,000, so the rebate back would be $8,820.”

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Also good news is that the PST rebate applies to a variety of housing types, including newly constructed single-family homes, condominiums, duplexes, modular homes and mobile homes. “The home has to be your primary residence. If you’re buying a property to rent out, the rebate doesn’t apply,” says Guérette.

The Saskatoon & Region Home Builders’ Association and the Regina & Region Home Builders’ Association have lobbied hard for the provincial government to amend its PST tax on residential construction.

“I think this particular PST rebate was a very clear message that our provincial government realizes that if you want a healthy society that can grow, home ownership is part of that. If the government can help you get into a home, or move up into a better home, that makes for a healthy housing continuum, which is key for a healthy economy and a healthy society,” Guérette says.

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Those buying a home for the first time can also take advantage of the Saskatchewan First-Time Home Buyers’ (FTHB) Tax Credit, which provides a non-refundable income tax credit of up to $1,050 to eligible tax payers. The Saskatchewan FTHB tax credit applies to the purchase of single-family and semi-detached houses, townhouses, condominium units, apartments and mobile homes. A maximum of $10,000 can be claimed on the first-time purchase of a home on the buyers’ provincial tax return.

“What’s cool is that you can use the Saskatchewan First-Time Home Buyers’ Tax Credit and the PST rebate together. It’s a phenomenal message of support for home ownership from our provincial government,” Guérette says.

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Provincial incentives can be further boosted by programs being delivered by the federal government.

The federal government’s First-Time Home Buyer Tax Credit program offers first-time purchasers of a qualifying home a maximum $5,000 non-refundable credit on their federal tax return. The tax credit can be split by spouses or common-law partners purchasing a home together, but the total claim cannot exceed $5,000. For an eligible individual, the credit provides up to $750 in federal tax relief.

The federal government has another First-Time Home Buyer Incentive Program that enables qualifying home buyers to reduce their monthly mortgage payment without increasing their down payment.

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To qualify, the first-time home buyer must meet the minimum down payment requirements. The individual’s maximum qualifying income must be no more than $120,000. Total borrowing is limited to four times the qualifying income.

If the first-time home buyer meets these requirements, they can apply for a five or 10 per cent shared equity mortgage with the Government of Canada. This incentive lowers the amount the individual needs to borrow and reduces the buyer’s monthly mortgage payment. Down the road, when the home is sold, the incentive needs to be repaid as a percentage of the home’s current value.

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For many first-time buyers, one of the biggest challenges is saving up for a down payment. The federal government’s Home Buyers’ Plan allows a first-time home buyer to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to purchase or build a home, without having to pay tax on the withdrawal.

If you are purchasing a home with a spouse or common-law partner, both individuals can withdraw $35,000 from their RRSPs, for a combined total of $70,000. The borrowed funds must have been held in the RRSP for at least 90 days before withdrawal.

The home buyer must repay the money back into the RRSP within 15 years, with payments starting no later than the second year after the withdrawal date.

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Guérette also says that changes to borrowing guidelines for insured mortgages are expected to be implemented in the next few months. “The mortgage stress test modifications were due to come into effect on April 6, but because of the COVID-19 crisis, that’s on hold right now.”

For people in the position to take advantage of these incentives and purchase a new home, Guérette has some important advice: “It’s important to make sure you’re using a Certified Professional Home Builder. People don’t realize that there is no government requirement mandating that builders adhere to professional standards. Our association ensures that all of our members meet those requirements.” To find out who those certified home builders are, you can go to


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