Have You Heard About The Shared Equity Program in Quebec?

Supporting first-time homebuyers is essential for fostering economic stability and enabling individuals/families to achieve homeownership, especially in today’s high interest rate market. Although many first time home buyers do not know about it, the Quebec government actually does have a unique and interesting program to help first time home buyers achieve ownership.

The First time home buyer incentive is essentially a shared Equity Program with a twist – Home Price Appreciation Sharing (HEAPS). In this program, the government partners with first-time homebuyers to purchase a home. The government provides a portion of the down payment (usually a fair match of your down payment, meaning if you put 5%, they add another 5% and so on) and in return, it shares in a percentage of the property’s future appreciation upon resale, meaning if you make a 100,000$ profit, they would take a small percentage of that (example: 8%) + their initial investment (the portion of down payment)

If you are buying a 500,000$ home in 2023 and putting 10% Down payment (50,000$) the government can match that 50,000$ to help you put 20% down payment, and if when sold in 2027, the value is 700,000 the government would take back their original 50,000$ (down payment portion) +8% of the profits (16,000$ total) leaving you with a profit of $134,000 after all is said and done.

Benefits:
– Reduced upfront costs for buyers allowing them to increase their down payment and reduce monthly costs
– Encourages long-term homeownership as buyers have a financial incentive to stay in their homes.
– Government investment in home prices aligns with homeowners’ interests, promoting a stable housing market.

In Quebec The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a prepayment penalty. This incentive is definitely interesting for buyers that are struggling to find an additional sum for their down payment, however should not be used if not absolutely needed seeing as the cost of repayment is not low!