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FIRST TIME HOME BUYERS' PROGRAM!

First Time Home Buyers' Program

 

Becoming a home owner for the first time can be very confusing and overwhelming for many people!  You've probably heard many things about buying a home for the first time however you may not be clear about everything you've heard!  

 

There are many benefits for first time buyers and among them is the First Time Buyers' Program!  I get many questions about the First Tiime Home Buyers' Program!  The First Time Home Buyers' Program reduces or eliminates the amount of property transfer tax (Usually referred to as PPT) you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax!

 

Another question I get often is what if my partner has bought before buy I have not?  If one or more of the purchasers don’t qualify, then only the percentage of interest that the first time home buyer(s) have in the property is eligible!  For example, if you qualify and purchase a property with a fair market value of $400,000 with a person that doesn’t qualify you would still qualify. If you owned a 60% interest in the property, 60% of the tax amount would be eligible for the exemption.

 

How do I know if I Qualify?

 

To qualify for a full exemption  at the time the property is registered you must:

  • be a Canadian citizen or permanent resident
  • have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
  • have never owned an interest in a principal residence anywhere in the world at any time
  • you have never received a first time home buyers' exemption or refund

and ALSO the property must:

  • be located in B.C.
  • only be used as your principal residence
  • have a fair market value of $425,000 or less
  • be 0.5 hectares (1.24 acres) or smaller

You may qualify for a partial exemption from the tax if the property:

  • has a fair market value less than $450,000
  • larger than 0.5 hectares
  • has another building on the property other than the principal residence

Also, if you don’t qualify because you are not a Canadian citizen or permanent resident, but you become one within 12 months of when the property is registered, you may apply for a refund of the tax. To apply for a refund call (250) 387-0604.

 

To Apply:

 

To apply for the First Time Home Buyers' Program you need to complete the First Time Home Buyers' Property Transfer Tax Return when you or your legal professional (normally your lawyer) register the property transfer.

 

After you have applied you must meet additional requirements during the first year you own the property to keep the tax exemption.

 

Penalty for False Declaration

All applications are reviewed. You will be charged a penalty equal to double the tax if you falsely declare that:

  • you have never owned an interest in a principal residence anywhere in the world at any time, or
  • you have never received a first time home buyers' exemption or refund

First Year of Ownership:

 

At the end of the first year you own the property you will receive a letter. The letter is to conditionally confirm that you meet the occupancy and property value requirements after you:

  • purchased an existing home, or
  • purchased vacant land and built a home
Don't hesitate to call or email me if you have any other questions about the First Time Home Buyers' Program or other incentives for first time buyers!!

 

 

 

Courtesy of the Government of BC website-  http://www2.gov.bc.ca/gov/topic.pageid=BBD16E2D7C1841A7BBD420E3AC5380F1

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