PROGRAMS AVAILABLE TO FIRST TIME HOME BUYER in BC
The ‘first time home buyer’ programs in BC reduces or eliminates the amounts of different taxes you pay when you purchase a home.
The Home Buyers’ Plan(HBP) This lets you withdraw up to $35,000 (couples up to $75,000) tax-free from your registered retirement savings plan (RRSP) as a loan to build or buy your first home.
GST/HST New Housing Rebate To be eligible, the fair market value of the home has to be under $450,000 once construction is complete. The rebate is equal to 36% of the GST to a maximum rebate of $6,300. The property must be your primary place of residence.
Property Transfer Tax Rebates(PTT) In BC buyers can receive up to $8,000 in rebates, if the fair market value of the home is $500,000 or less. Between $500,001 and $524,999, only a partial rebate is given, and there is no rebate for prices above $525,000. This is valid for homes purchased before April 1, 2024.
After April 1, 2024, PPT exemption applies to homes with a fair market value below $835,000. PTT is not payable on the first $500,000, but payable on the difference between the fair market value and $500,000. For example, if the fair market value of the property is $700,000, PTT paid would be 2% of $200,000 ($700,000 less $500,000). Not paying PTT on the first $500,000 saves the purchaser a total of $8,000.
If you qualify for the Newly built home exemption, the amount of property transfer tax you pay depends on the fair market value of the property. If the fair market value of your property is more than $750,000 and less than $800,000, you may qualify for a partial exemption. See here the amount of tax payable if 100% of the property transfer is eligible for the newly built home exemption.
Effective April 1, 2024, the fair market value threshold to claim the Newly Built Home Exemption will be increased from $750,000 to $1,100,000. A partial exemption is also available for properties with a fair market value just above the threshold. The phase out range is $50,000 above the threshold, so properties with a fair market value of greater than $1,150,000 will not be able to claim the Newly Built Home Exemption.
First-Time Home Buyer Incentive Overseen by CHMC. New buyers can claim five or 10% of the property’s purchase price to put toward a down payment. Within a 25-year period, or when the home is sold, the same percentage value of the home is paid back. The homeowner can also pay back the incentive in full at any time.
Note: you must apply by March 21, 2024. The program is being discontinued after that date.
The Home Buyers’ Tax Credit(HBTC) If you’re a first-time home buyer with a qualifying home you could receive up to $10,000 of the purchase from the Home Buyers’ Tax Credit (HBTC). To file for the rebate, simply enter $10,000 on line 31270 of your tax return.
First Home Savings Account (FHSA) The First Home Savings Account (FHSA) is specifically designed to help first-time home buyers save for their down payment, tax-free. Qualifying first-time buyers can contribute up to $8,000 yearly to a maximum of $40,000 towards a down-payment. Contributions are tax deductible; capital gains (earnings) and interest are tax-free. Can be used together with the Home Buyers’ Plan.