The Down Payment Assistance Program (DPAP) by the Government of PEI provides an interest-free loan of up to 5% of the purchase price of a home for first-time home buyers. The maximum amount of the loan is $12,500, and must be used only for the down payment of the home. Only the loan principal is repaid, but should the homeowner default on the loan, interest is payable at a fixed rate of five percent per annum and will be due in full. Payments can be waived for the first year of the loan.
To be eligible, you must be a Canadian citizen and a first-time home buyer. Your household income must be $85,000 or less, and the purchase price of the home must be less than $250,000. You are considered a first-time home buyer if you have never purchased a home or if you did not own a home in the last four years, or if your marriage or common-law partnership has broken down. The property you are purchasing must become your principal residence.
The PEI transfer tax exemption waives the property transfer tax for first-time home buyers. You must have resided in PEI for 183 consecutive days before purchasing your home, or have occupied your new purchased home for at least 183 consecutive days.
There is no limit on the purchase price for first-time home buyers to receive a refund. Prior to 2016, the purchase price limit to be eligible for the refund was $200,000.
Non-first-time home buyers are also exempt from PEI’s real property transfer tax if the cost of the property being transferred is below $30,000.