If you’re looking to buy your first home, you need to read this article! Did you know that being a first time home buyer has many different perks? When you work with a mortgage broker, like myself, I’ll share these perks with you. Together we can work those that fit into your mortgage.
It’s super important to use an experienced broker to make sure you’re getting the best bang for your buck. In this article, I’ll share six benefits of being a first time home buyer in BC.
1. Property transfer tax
One big cost when buying a home is the property transfer tax. Luckily for first time home buyers, that cost can be reduced or eliminated.
To qualify for first time home buyer property transfer tax, you have to:
- be a Canadian citizen or a permanent resident
- lived in B.C. for at least a year immediately before the date you register the property
- filed at least 2 income tax returns as a B.C. resident in the last 6 taxation years immediately before the registration date
- have never owned a registered interest in a property that was your principal residence anywhere in the world at any time
- have never received a first time home buyers’ exemption or refund
and the property must:
- only be used as your principal residence
- have a fair market value of $500,000 or less
- be 0.5 hectares (1.24 acres) or smaller
You may qualify for a partial first time homebuyer exemption from the tax if the property:
- has a fair market value less than $525,000
- is larger than 0.5 hectares
- has another building on the property other than the principal residence
2. Home buyers’ amount
The Home Buyers’ Amount offers a $5,000 non-refundable income tax credit amount on a qualifying home acquired during the year. The credit provides up to $750 in federal tax relief.
Who qualifies for first time home buyer in Canada?
- you or your spouse or common-law partner acquired a qualifying home
- 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 (first-time home buyer)
3. Home buyers’ plan (HBP)
The first time Home Buyers’ Plan (HBP), formerly the Home Buyers Amount, allows you to withdraw up to $35,000 in a calendar year from your registered retirement savings plans (RRSPs). This is to buy or build a qualifying home for yourself or for a related person with a disability.
4. GST/HST new housing rebate
Did you know that you may qualify for a rebate of part of the GST or HST that you paid on the purchase price of your home? GST/HST New Housing provides all of the details on this rebate.
5. Canada greener homes
The Canada Greener Homes program helps Canadian homeowners improve the energy efficiency of their homes and reduce their energy bills. Eligible homeowners will be able to receive grants and loans to make energy-efficient retrofits to their homes.
This is an ideal grant to use once you move into your home. Visit Natural Resources Canada for more details.
6. The first-time home buyer incentive
The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens. This program isn’t for everyone, but one I thought I would share just in case.
The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada. It offers:
- 5% or 10% for a first-time buyer’s purchase of a newly constructed home
- 5% for a first-time buyer’s purchase of a resale (existing) home
- 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home
The Incentive’s shared-equity mortgage is one where the government has a shared investment in the home. As a result, the government shares in both the upside and downside of the property value.
Reach out to me today.
Now you have an idea of some of the perks of being a first time home buyer. If things still seem overwhelming, reach out to me today! I’ll be able to help you understand all of these perks and whether or not you qualify for them.
I was a first time home buyer once before and I understand everything you’re going through. Give me a call at 250-826-3111, fill out the form below or submit an application on my website to get started.