Before we start, something needs to be made clear: B.C.’s First-Time Home Buyers’ Program is not the same thing as First-Time Home Buyers’ Tax Credit and it is also not the same as the Home Buyers Plan. The First-Time Home Buyers’ Program in British Columbia gives individuals the opportunity to reduce or eliminate the property transfer tax they pay when purchasing their first home.
Property transfer tax is exactly as it sounds: a tax you pay to transfer your purchased home into your name. It is a one time tax everyone pays when they buy a home and it is not the same thing as yearly property tax payments. Property transfer tax is equal to 1% of the first $200,000 of a property’s value plus 2% on any amount over $200,000 up to $2,000,000. So, if you buy a house or condo worth $350,000 you will pay $5,000 in property transfer tax (1% of $200,000 plus 2% of $150,000).
In order to qualify for this First-Time Home Buyers’ Program and be exempt from paying your property transfer tax, you must be:
* Canadian citizen or permanent resident
* Lived in B.C. for 12 consecutive months up until you register the property OR filed at least 2 income tax returns as a B.C. resident in the past 6 years.
* Have never owned any portion, of any home or residence, anywhere in the world at any time.
* Have never received a first-time home buyers’ exemption or refund.
If you qualify for the above, then you must make sure the property qualifies for the following:
* Located in B.C.
* Your principal residence (you must live there and not rent it out)
* Have a value of $475,000 or less if register on or after February 19, 2014
* be smaller than 0.5 hectares (53,819.60 sq. ft.)
Any amount over $475,000 just means you will not receive a 100% exemption or refund, and you will still need to pay a portion of the tax. To find out what that portion would be, you can visit: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers or call the mortgage professionals at Dominion Lending Centre – we’re here to help!
Thanks to my DLC partner, RYAN OAKE for this post today!