First Time Home Buyer in QUEBEC- Full Guide

Have you finally decided to make a big move and started looking to purchase your very first home?

First off, congratulations! Buying your first property is undoubtedly a huge milestone.

Purchasing a home for the first time can be daunting and feel like a foreign process, but you’re at the right place, as you’ll get all the step-by-step help here. 

I’ve created a curated guide specifically for first-time homebuyers in Quebec to help make the process as smooth as possible.

First-time home buyer Quebec down payment, How much? 

The first-time home buyer in Quebec requires a minimum of 5 percent of the existing home or 5 to 10% of the potential purchase price of the newly constructed property unless you are a cash home buyer.

The down payment is the money you pay upfront to buy a house. It’s important to know how this differs from a mortgage, which is the money you borrow to pay for a house.

Your lender will subtract your down payment from the total cost of the home you’re buying. If you’re taking out a conventional loan, you may be asked to put down anywhere from 5 to 20 percent of the sale price in cash. The minimum amount you need for your down payment depends on various factors, such as the purchase price of the home and whether your lender will require private mortgage insurance (PMI).

How much down payment do I need for a house for the first-time buyer ? 

The amount of down payment depends on the total selling price of the potential property you’re thinking of buying as your first home in Quebec. For instance, if the property’s price is $500,000, you may need at least $25,000 as a downpayment, or you can reduce the down payment amount with the help of interest-free first-time buyer incentives and get a loan for up to $16,500 for the down payment. So, technically you only need a down payment of $8,500 out of your pocket as a first-time buyer. 

However, it’s vital to discuss the down payment and benefits with a professional local mortgage advisor to get the best clarity as per your financial condition. 

Who qualifies as a first-time home buyer in Quebec?

In order to be qualified as a first time buyer the property you intend to buy must be your first home in Quebec. You must be a resident of Quebec and you need to live in the property within one year of your purchase. You can’t qualify as a first time home buyer if the property won’t be used as your principal residence.

What benefits do first-time home buyers get in Quebec?

First Time Buyer Tax Credit 

If you’re a first-time home buyer in the Canadian province of Quebec, you are eligible for the first-time buyer tax credit, which is also called “Line 31270”.

First-time buyers in Quebec can get up to $5,000 for buying a home during the tax year. 

If you’re buying your first home in Montreal, then you could be eligible for a Quebec transfer tax fund of up to $6250. However, to be eligible for that, you shouldn’t own any home in Quebec for at least five years. 

The Quebec City Family Access Program 

This is another excellent program or benefit for first-time home buyers in Quebec that provide interest-free, down payment loans which are worth 5.5% for houses under $300,000, which makes its loan amount up to $16,500, making it an excellent option for first-time buyers.

The two important advantages of the Quebec city family access program are that, 

• You get the advantage of paying no interest on the down payment loan
• It allows you to take out a smaller mortgage with the help of an interest-free down payment loan

The First-Time Home Buyer Incentive 

This incentive is a shared-equity mortgage that allows first-time buyers to borrow money from the Government of Canada to help with their down payment. With this incentive, buyers are able to put down as little as 5% on a home (as opposed to the usual 20%), which significantly opens up homeownership opportunities for those who may not have been able to otherwise afford a down payment.

With this program, buyers can take out a loan for 5% or 10% of their potential home’s purchase price for the down payment. This allows the buyer to take on a smaller mortgage and reduces the long-term cost of buying the home. The buyer then repays the same percentage at the time of selling the home or after 25 years. 

Here it’s crucial to know that the repayment is not based on the loaned amount or dollar amount but on the percentage of the purchased home’s value. So, the repayment would increase or decrease with the change in the market value or selling price of the home. 

Which house quality for the First Time Home Buyer Incentive? 

Once you know that you’re eligible for the first-time buyer incentive, the next thing is ensuring the property you’re looking to purchase is eligible for it as well. 

Existing and newly constructed houses are both qualified for First-Time Home Buyers Incentive, in addition to the following;

• Single House
• Duplex/Triplex/Fourplex
• Condo
• Mobile House 
• Semi-detached house 

How much is a downpayment on a house in Quebec?

The down payment is 5% if this is going to be your first property. If this is not going to be your first time purchase , you need to put 20% down payment as the banks will consider this transaction as an investment.

Bottom line: 

First-time home buyers in Quebec have access to many great programs that can help them get on the property ladder. However, you need to plan it carefully to make the most out of it

Note: The content above is for information purposes only and the accuracy of the information given above must be verified with a licensed mortgage advisor.