Tax Credits for First Time Home Buyers

02.09.2015

First Time Home Buyers in BC have a few tax credits at their disposal – here’s some information about the biggest credits available to you. Make sure you take advantage of these rebate through your real estate lawyer during the completion of the sale or your yearly taxes.

First Time Home Buyers GST Rebate

New home buyers can apply for a rebate of the 5% GST if the purchase price is $350,000 or less. The rebate is up to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000.

Purchasing a brand new condo directly from the Developer requires an additional 5% GST Tax (paid by the Buyer) on top of the sales price. Thankfully, the Government has offered a rebate for First Time Home Buyers: you can get 36% of the 5% GST back, up to a maximum of $6,300, if the purchase price if under $350,000 (unfortunately given Vancouver’s Real Estate Market, there are fewer and fewer new condos available for under $350,000). You can get a portion of this GST rebate back if the purchase price is between $350,000 and $450,000.

For example, say you’re buying a unit from a Developer for a sales price of $350,000. The GST payable on top of the sales price is $17,500, making the total sale price $367,500. Thankfully, you’re a first time home Buyer, which means you can apply for a rebate to receive 36% of the GST back, which equates to $6,300. Keep in mind you have to pay the full GST upon the purchase, and you will receive the rebate at a later date.

Here is some more information: GST Rebate for First Time Home Buyers

BC Home Owner Grant – Rebate on Property Taxes

Reduces property taxes for home owners with an assessed value of up to $1,100,000. The basic grant gives home owners:

• a maximum reduction of $570 in property taxes on principal residences in Greater Vancouver
• an additional grant of $200 to rural homeowners elsewhere in the province
• an additional grant of $275 to seniors aged 65+, those who are permanently disabled and veterans of certain wars

This Property Tax rebate is not necessarily for first time home buyers, but I can just about guarantee that all first time home buyers will qualify for this Home Owner Grant. To qualify, you must be a BC Resident and Canadian Citizen/Permanent Resident and be the registered owner of a property located in BC that is assessed at less than $1,100,000.

More information: BC Home Owner Grant for Property Tax Rebates

First Time Home Buyers Property Transfer Tax Credit

Home buyers in BC pay a provincial Property Transfer Tax (PPT) when they buy a home. The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder.

First-time home buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% on the remainder of the purchase price of a home priced up to $475,000. There is a proportional exemption for between $475,000 and $500,000. At $500,000 and above the rebate is nil.

This is the biggest and most important rebate available to first time home buyers, and a big reason why first time home buyers try to stay under the $475,000 limit even if they can afford more. The Property Transfer Tax (PTT) adds a significant amount of money to the final sales price of a property in BC. Some examples – for a $350,000 property the PTT is $5000, for a $400,000 property the PTT is $6000, for a $475,000 property the PTT is $7500.

If you are a first time home buyer, are a Canadian Resident or Permanent Resident, have lived in BC for the last year, or have filed 2 income tax returns in the past 6 years, then you are eligible for a rebate on the property transfer tax.

Any property under $475,000 and you don’t have to pay any PTT. For properties between $475,000 and $500,000 you will get a partial rebate.

More information: First Time Home Buyers Property Transfer Tax Rebate

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