BC First Time Home Buyers – Rebates, Programs, Grants & Tax Credits
If you are a first time home buyer, congratulations! A home is generally considered the largest investment most will make in their lifetime.
The first step is to find out how much you can afford. Our mortgage calculator can help. Before it’s time to go looking for a home be sure to get a pre-approval. This will allow you to secure a great rate as well as establish the confidence that when you do find your home, you will have financing in place.
Home Buyer Tax Credit (up to $750)
You can receive up to $750 back from the federal government by applying for the home buyer tax credit in the year the home was purchased. To obtain the tax credit, complete line 369 on your personal income tax return.
You will qualify for the HBTC if:
• You, your spouse or common-law partner acquired a qualifying home; and
• You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.
If you buy a house, with a spouse or common-law partner, either one of you can claim the credit or you can share the credit. However, the total of your combined claims cannot exceed $750. You must occupy the home as your principle residence no later than one year after the home was purchased. For more information see Home Buyer Tax Credit or HBTC.
First Time Home Buyers RRSP Plan (up to $25,000)
The First Time Home Buyers RRSP Plan (HBP) allows first time home buyers to withdraw up to $25,000 from RRSPs to buy or build a home for yourself or for a related person with a disability. The withdrawn amount must be repaid within 15 years, subject to a minimum annual repayment that is 1/15 of the amount withdrawn. If the full $25,000 is withdrawn, the minimum annual repayment is $1,667. If less than the minimum is repaid in any particular year, the balance is added to the taxpayer’s income. To qualify for the Home Buyers Plan, an individual must not have not owned a home during the last 4 full calender years.
Follow the link for more information on the RRSP Home Buyers Plan.
BC First Time Home Buyers Land Transfer Tax Credit
Home purchases in BC are subject to a land transfer tax of 1% of the first $200,000 of the price, and 2% thereafter. The BC Land Transfer Tax Credit is a refund of the cost of the land transfer tax for first time home buyers up to a maximum of $6,500. This will allow first time home buyers to purchase a home up to $475,000 without having to pay any land transfer fee. Home purchases above $500,000 disqualify first time home buyers from the ENTIRE credit. Partial credits are provided for purchases between $475,000 and $500,000. See partial credit scale. To qualify for the BC Land Transfer Tax Credit, the property must be owner occupied for at least 1 year, you cannot have owned ever a home, or an interest in a home, anywhere in the world.
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If two people buy a home together, and one is eligible for the First Time Home Buyers land transfer tax rebate, and one isn’t, then tax will be charged proportionately to their ownership share. See rate table for 50% rebate.
Here is a BC land transfer tax calculator for an easy calculation.
For more information see BC Land Transfer Tax Credit.