Government Incentives

Costs associated with purchasing a new property can add up quickly–especially if you’re a first time home buyer. That’s why the Province of BC offers First-Time Home Buyer’s tax credits, which aims to reduce or eliminate the amount of taxes paid on a purchase. To qualify, you must be a Canadian citizen of permanent resident, have lived in BC for the past 12 months, and claim the property as an owner-occupied residence. Properties under $500,000 will be qualified for a full exemption, and properties with a fair market value of $525,000 to $500,000 may qualify for a partial exemption. For a full list of details on the FTHBP and how to apply, please see here.

To provide first-time home buyers with greater access to their RRSP savings to purchase or build a home, the Government of Canada allows individuals to withdraw up to $25,000 from their RRSP’s towards the purchase of their home. This is tax free, as long the principle amount is returned within 15 years of withdrawal.

Alike the first-time home buyers exemption, the Province of BC also offers an exemption on the amount of property tax paid for newly built homes. These include a newly built house, condo or apartment building, and various other construction types. As long as the property was bought in an individual’s name (no corporations or holding companies), the purchaser is a Canadian citizen or permanent resident, and has a fair market value of $750,000 or less, you qualify for the exception. Partial exemptions apply for individuals buying in the $750,000 – $800,000 range. For more information on whether you qualify for this exemption, click here.

This program assists individuals with less than 20% down payment, offering interest-free loans up to $37,500 to first-time home buyers to use towards their down payment. This in turn decreases the insurance premium paid at closing, offering further potential savings to individuals. However, the loan is registered as a second mortgage on your property, and has to be factored into your debt service ratios when applying for your mortgage. Since there are nuances regarding this program, it’s best to contact your nearest mortgage professional to see if you qualify and, more importantly, to see if this program is right for you and your needs.