The B.C. First-Time New Home Buyer's Bonus
As was announced last week, the BC government intends to implement a temporary BC first-time new home buyers' bonus up to $10,000 (subject to approval by the legislature). Effective date February 21, 2012 to March 31, 2013.
The requirements to qualify for an eligible first-time new home buyer.
Qualification for a first-time new home buyer are:
- You purchase or build an eligible new home located in BC.
- You, or for couples, you and your spouse or common-law partner, have never previously owned a primary residence;
- You file a 2011 BC Resident Personal Income Tax Return, or if you move to BC after December 31, 2011, you file a 2012 BC Resident Personal Income Tax Return (you will not be eligible for the bonus if you move to BC after December 31, 2012);
- You are eligible for the BC New Housing Rebate; and
- You intend to live in the home as your primary residence.
- This is a $10,000 income tax credit -not cash.
- The tax credit is equal to 5% of the home price, maximum of $10,000.
- The tax credit is pro-rated based on your/family income and phases out for higher income earners.
- Tax Credit is applied at the time you file your annual income tax return. Not to be construed as funds that is available at closing date of purchase. The $10,000 tax credit is effectively applied as an offset against your income. Since this is a BC tax credit, not federal, it only applies to the BC tax paid on your personal income. The typical BC tax rates for individuals are 7.7%. So in this case you would receive a tax payment of $770.
HST/GST Rebates in BC
Buyers of new homes are eligible for a rebate of 71.43% of the Provincial portion (7% PST) of the HST paid on a new home up to a maximum rebate of $26,250. These rebates are available with respect to newly constructed or substantially renovated homes purchased or constructed as a place of primary residence. Current Homes prices more than $525,000 will be eligible for a maximum rebate of $26,250. However as of April 1st, 2012 the Purchase Price threshold increases to $850,000 with a maximum rebate of $42,500, home prices above will still also be eligible for the maximum of $42,500.
Also as of April 1st, 2012 certain purchases of new housing used as a second or recreational residence will be eligible; this is limited to purchases made outside of Greater Vancouver Regional District area.
Currently still available is the Federal GST new housing rebate, which is 36% of the Federal portion (5% GST) maximum rebate $6,300, on a Purchase Price of $350,000.For homes above $350,000 but no higher than $450,000.00, the rebate is gradually reduced and is calculated by using the following formula: $6,300 x [$450,000 - the purchase price] / $100,000. In this example New Housing Rebate would be $3,150.00, for a net tax payable of $16,850.00. There is no GST New Housing Rebate on homes valued at over $450,000.00.