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First Time Home Buyers' Program & Property Transfer Tax

The First Time Home Buyers' Program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax.

If one or more of the purchasers don’t qualify, only the percentage of interest that the first time home buyer(s) have in the property is eligible.

For example, if you qualify and purchase a property with a fair market value of $400,000 with a person who doesn’t qualify you would still qualify. If you owned a 60% interest in the property, 60% of the tax amount would be eligible for the exemption.

The exemption doesn’t apply to the additional property transfer tax on residential transfers to foreign nationals or foreign corporations.

Do I Qualify?

To qualify for a full exemption, at the time the property is registered you must:

  • be a Canadian citizen or permanent resident
  • have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
  • have never owned an interest in a principal residence anywhere in the world at any time 
  • have never received a first time home buyers' exemption or refund

and the property must:

  • be located in B.C.
  • only be used as your principal residence
  • have a fair market value of:
    • $425,000 or less if registered on or before February 18, 2014, or
    • $475,000 or less if registered on or after February 19, 2014
  • be 0.5 hectares (1.24 acres) or smaller

You may qualify for a partial exemption from the tax if the property:

Find out the amount of your exemption if you qualify.

If you don’t qualify because you are not a Canadian citizen or permanent resident, but you become one within 12 months of when the property is registered, you may apply for a refund of the property transfer tax. To apply for a property transfer tax refund in this case, call (250) 387-0604. However, if you’re a foreign national or foreign corporation, you can’t be refunded any additional property transfer tax you may have paid.

Apply

To apply for the First Time Home Buyers' Program you need to complete the First Time Home Buyers' Property Transfer Tax Return when you or your legal professional register the property transfer.

After you have applied you must meet additional requirements during the first year you own the property to keep the tax exemption.

Penalty for False Declaration

All applications are reviewed. You will be charged a penalty equal to double the tax if you falsely declare that:

  • you have never owned an interest in a principal residence anywhere in the world at any time, or
  • you have never received a first time home buyers' exemption or refund

First Year of Ownership

At the end of the first year you own the property you will receive a letter. The letter is to conditionally confirm that you meet the occupancy and property value requirements after you:

Existing Home

To keep the tax exemption you must have:

  • moved into your home within 92 days of the date the property was registered
  • continued to occupy the property as your principal residence for the remainder of the first year

You may keep part of the exemption if you moved out before the end of the first year.

If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you still qualify to keep the tax exemption.

Built New Home

If you registered a vacant lot and built your own home, to keep the tax exemption:

  • the fair market value of the land when you registered the property plus the cost to build your home must be:
    • $450,000 or less if registered on or before February 18, 2014, or
    • $500,000 or less if registered on or after February 19, 2014
  • you must have built and moved into your home within 1 year of the date the property was registered
  • you must have continued to occupy the property as your principal residence for the remainder of the first year

You may keep part of the exemption if you moved out before the end of the first year.

If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you still qualify to keep the tax exemption.


Source:  Government of British Columbia, Taxes ,  Link: http://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand/first-time-home-buyers

 

Government of Canada Programs to Support Homebuyer

First-Time Home Buyers' (FTHB) Tax Credit

The FTHB Tax Credit offers a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax relief.

Home Buyers' Plan (HBP)

The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.

GST/HST New Housing Rebate

You may qualify for a rebate of part of the GST or HST that you paid on the purchase price or cost of building your new house, on the cost of substantially renovating or building a major addition onto your existing house, or on converting a non-residential property into a house.

 

First Time Home Buyer ?  Need Help with the Down Payment?

B.C. Home Owner Mortgage and Equity partnership

Every British Columbian deserves a place to call home. That is why we are taking action to control the cost of housing, increase access to affordable rental units, and help families make their dream of homeownership come true.

cartoon couple standing in front of house

What is the Home Owner Mortgage and Equity (HOME) Partnership?

From middle class families to young professionals, first-time home buyers are looking to invest in a secure and stable future.

For many British Columbians dreaming of buying their first home, the hardest step is saving for a down payment. That is why the Province is partnering with British Columbians to help make that dream come true, through the B.C. Home Owner Mortgage and Equity (HOME) Partnership program.

Through the B.C. HOME Partnership program, the Province is helping first-time home buyers by contributing to the amount they have already saved for a down payment with a loan that is interest-free and payment-free for the first five years.

Here is how it works:

  • The B.C. HOME Partnership program will meet the buyer’s contribution up to 5% of the home’s purchase price, to a maximum purchase price of $750,000.
  • After five years, buyers can either repay their loan or enter into monthly payments at current interest rates.
  • Loans through the program become due after 25 years – the same length as most mortgages.

The B.C. HOME Partnership program will start accepting applications Jan. 16, 2017. To apply, click here.

British Columbians buying their first home can also get help through other Housing Action programs like the First Time Home Buyers’ Program and the Newly Built Homes Exemption.

Eligibility

The B.C. Home Owner Mortgage and Equity (HOME) Partnership supports eligible first-time homebuyers. To qualify for the program, all individuals with a registered interest on title must reside in the home and:

  •   Have been a Canadian citizen or permanent resident for at least five years
  •   Have resided in British Columbia for at least one year immediately preceeding the date of application
  •   Be a first-time buyer who has not owned an interest in a residence anywhere in the world at any time
  •   Use the property as their principal residence for the first five years
  •   Purchase a home that has a purchase price price of $750,000 or less (excluding taxes and fees)
  •   Obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price
  •   Have a combined, gross household income of all individuals on title not exceeding $150,000
  •   Have saved a down payment amount at least equal to the loan amount for which the buyer applied

How to apply

Step 1: Get preapproval for an insured first mortgage from your financial lending institution.
Step 2: Apply to BC Housing for the Home Owner Mortgage and Equity (HOME) partnership loan. If you are eligible, you will receive confirmation of eligibility and Homebuyer’s Kit which includes information for your Lender, Real Estate Agent, and Lawyer/Notary Public.
Step 3: Find your home and provide the details of your planned purchase to BC Housing for approval.

Applications for the program will be accepted starting Jan. 16, 2017, for purchases that will close on or after Feb. 15, sold sign2017.

What information is needed to apply?

Buyers can begin gathering the documents they’ll need to submit an online application. Buyers will need:

  1. Proof of status in Canada and residency in British Columbia
  2. Secondary identification (must include your photo)
  3. Proof of income and tax filings
  4. Insured first mortgage pre-approval

 

Source: https://housingaction.gov.bc.ca/tile/home-owner-mortgage-and-equity-partnership/