Provincial Incentives:
BC Property Transfer Tax:
In B.C., for all property purchases, the Property Transfer Tax (PTT) is applicable. It is calculated by the following schedule:
1% on the first $200,000,
2% on the balance up to $2,000,000,
3% on the balance above $2,000.000.
First time home buyer’s exemption on PTT is different for RESALE and BRAND NEW homes.
PTT Exemption: RESALE Homes
Full exemptions are available for RESALE properties UP TO $835,000 purchase price if you qualify as a first-time homebuyer.
PTT Exemption: BRAND NEW Homes
Full exemptions are available for PRESALE/BRAND NEW properties UP TO $1,150,000 purchase price if you qualify as a first-time homebuyer.
Federal Incentives:
GST Exemption for First time home buyers (Up to $450,000 brand new purchase):
In some circumstances, you can claim an exemption on the 5% GST (up to $450,000 purchase) if the home you’re buying is substantially renovated or brand new from developer.
Home Buyer’s Plan (HBP)- (Withdraw up to $60,000 from RRSP)
The Home Buyers’ Plan (HBP) is a helpful program in Canada that lets you take out up to $60,000 per year from your retirement savings (RRSP) to use as a down payment when buying a home. This can be for you or a family member with a disability. Just remember, the money needs to be in your retirement savings for at least 90 days before you buy the house.
The cool part about this plan is that normally, taking money out of your retirement savings early means you have to pay taxes on it. But with the Home Buyer’s Plan, you don’t have to! However, you do need to start paying back what you borrowed from your retirement savings two years after you buy the house. You get 15 years to pay it back, so it’s like a slow and steady repayment plan. It’s a good way for Canadians to make buying a home a bit more affordable.
Tax Free First Home Savings Account (FHSA)- ($8,000/year up to $40,000 Tax free account for home purchase. Must use in 15 years)
- The Tax-Free First Home Savings Account (FHSA) is a new savings plan for prospective first-time homeowners in Canada. You get a tax deduction on contributions and it allows your savings to grow tax-free.
- Sock away up to $8,000 per year into the FHSA, up to a lifetime maximum of $40,000.
- If you don’t use the FHSA to buy a home within 15 years, it must be closed. If you don’t use all or any of the funds in your FHSA, you can transfer them to an RRSP or RRIF.
First time home buyer tax credit (Up to $1500):
Enabling first-time homebuyers in Canada to alleviate some of the expenses linked to their purchase, the First-Time Home Buyer’s Tax Credit is a non-refundable credit amounting to $10,000. This credit translates to a maximum tax rebate of $1,500, effective from 2023 ($750 prior to the 2022 budget approval). The credit serves as a financial buffer, assisting in offsetting various costs such as legal fees, inspections, and other closing expenses associated with the acquisition of a new home.
