First Time Home Buyer Incentives in BC

Home Sweet Home Buyer

Buying your first home is exciting. It is one of the most significant purchases of your lifetime and can often be a great investment for you. 

Buying your first home can also be a bit scary. It’s going to take a lot (or all) of your savings and (likely) a lot of debt to make it happen. House prices in BC have been steadily increasing and based on how real estate is trending in B.C., there are no signs of home prices getting any cheaper. You’re likely feeling the pressure that if you don’t do it now, home ownership may become unattainable. 

Thankfully, the government understands that it’s hard to buy your first home and has a few incentives in place to help first time home buyers, just like you, get their foot in the door. 

If you’re a first-time home buyer in B.C. here are the incentives and programs you should know about. While we have outlined the below incentives and programs, please read and consider each in full to ensure you are eligible and qualify.

Federal First Time Home Buyers Tax Credit

The Government of Canada First-Time Home Buyers’ Tax Credit works for nearly any Canadian citizen purchasing a home for the first time. Tax credits aren’t like cash back or purchase credit. When you file your taxes the following year, you’ll be able to claim $5,000 in tax-free income which could roughly translate to about $750 of taxes that you don’t have to pay or that you may receive back as a credit. 

Government of Canada’s First-Time Home Buyer Incentive

This first-time home buyer incentive helps qualified residents to purchase their first home by offering 5 or 10% of the home’s purchase price to put towards a down payment. Adding that to their already saved downpayment amount allows buyers to borrow less from the bank, increasing their ability to qualify for their mortgage amount and reducing monthly mortgage carrying costs. 

This is a relatively new program and it comes with many conditions. You will want to thoroughly understand all conditions and stipulations of this incentive before partaking in the program. 

Home Buyers Plan

Do you have an RRSP? You may qualify for the Home Buyers’ Plan (HBP) – with which you can borrow money saved in your RRSP to help you purchase your home, on the condition that you will repay the money you take out of the RRSP within 15 years. 

If you and your spouse are buying a home for the first time together, you each can borrow up to $25,000 from your individual plans for a total of $50,000.  

B.C. First Time Home Buyers’ Program

The B.C. First Time Home Buyers’ Program helps B.C. residents choose a full or partial exemption from the property transfer tax payment required when they purchase a home. How much this could save you depends on the value of the property. 

The general property transfer tax rate in BC is:

  • 1% of the fair market value up to and including $200,000
  • 2% of the fair market value greater than $200,000 and up to and including $2,000,000
  • 3% of the fair market value greater than $2,000,000

Do you want to take advantage of these incentives but don’t know where to start? A residential real estate lawyer can help you. Contact us today!