Buying your first home is an exciting time. It can also be overwhelming. So many things to know and understand. In Canada, both the provincial and federal governments want to encourage people to buy a home and establish roots in their community.
Programs have been created to ease the financial burden of purchasing your first home. One of them is the First Time Homebuyers’ Program in British Columbia. This program was created with the purpose to reduce and eliminate the amount of property transfer tax home buyers have to pay when purchasing their first home. Those who are eligible for this program will be able to receive either full or partial exemption from the tax.
To qualify for the program, a first time home buyer must:
In addition, the property also must:
You may qualify for a partial exemption if the property:
Has a fair market value less than:
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 in your name, you may apply for a refund of the Property Transfer Tax.
RRSP Home Buyers Plan. It is a program with the help of which first-time homebuyers can withdraw up to $35,000 from their Registered Retirement Savings Plan towards their first home tax-free. With the help of this program, you can get into a home quickly and you borrow money from yourself rather than from a third party. However, the HBP does require repayment over a 15 year period. It is recommended to discuss the possible tax implications before withdrawing the funds.
First Time Home Buyers Tax Credit. It is a non-refundable $5,000 tax credit for new buyers of a qualifying home. A qualifying home is a housing unit located in Canada that was acquired after January 27, 2009. It provides up to $750 in tax relief to help first-time homebuyers.
GST/HST new housing rebate – is a tax compensation policy provided by the Canadian federal government and the government of Ontario, the purpose of which is to encourage investors to purchase new rental properties and developers to build new housing.
If you are a first time home buyer looking to purchase your forever home give us a call at (604) 763 – 4647. We support the entire Vancouver and Surrey lower mainland.