The City of Montreal has launched a new subsidy program that pays 20% of a home's market price for eligible buyers. 

The program is part of the Règlement pour une métropole mixte (RMM) bylaw coming into effect on April 1, and aims to make owning property easier for Montrealers while ensuring "affordability over a period of at least 30 years."

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The program is currently only available in two sectors of two boroughs — Verdun and Saint-Laurent — but the City says new areas will be added progressively.

Homebuyers who want to take advantage of the program must have a household income that's equal to or less than the purchase price divided by 3.5. 

Households without children who want to receive the discount cannot have been homeowners in the last five years, but this rule is not applied to families with a child who is 13 years old or younger.

The City expects to help 150 to 315 households with an average subsidy of $44,500 per home between 2021 and 2023.

Subsidy breakdown

The new subsidy will provide 10% of the market value of a property, which comes into effect upon the acquisition of the home.

It will also provide a 10% builder’s discount, required by the RMM bylaw, bringing the actual price paid to 80% of the market value of the property.

The City says the program preserves the affordability of a home over 30 or more years. When the home is resold, the maximum price must correspond with an annual increase of 3%, calculated on its reduced purchase price.

At the end of the 30-year period, the City has a right of first refusal, which allows it to acquire the property under the same terms and conditions of the program and put it up for sale.

As an example of how the program works, a home with a $500,000 market value will have a 10% builder’s reduction and a 10% subsidy from the City, for a reduced price of $400,000.

To purchase a home at that price, the buyers' household income must not be more than $400,000 divided by 3.5 — which comes out to a maximum household income of $114,300.

You can find more information on the program here.