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First Time Homebuyer Privileges

General Kristin Woolard 1 Mar

So, you’ve decided to jump into the real estate market – good for you! It will be extremely beneficial to start paying your own mortgage instead of a landlord’s.

If this is your first home purchase there are some definite advantages available to you.

There is a national program called the Home Buyer Plan where the Government of Canada will allow you to draw up to $25,000 from your RRSP for your down payment without having to pay the taxes on it. You will have to repay the amount you withdraw over the next 15-years by annual instalments. This program is available to all Canadians who haven’t owned a home in the previous 4-years.

The Province of BC a program for First Time Homebuyers (FTHB) as well. You can get an exemption from having to pay thousands in Property Transfer Tax (PTT) as a FTHB as long as you are a Canadian citizen, have lived in BC for the last 12-months and have never owned a home anywhere in the world.

PTT is calculated as 1% of the first $200,000 and 2% of the rest. So on $500,000 as a FTHB you will save $8,000.00! If your purchase is between $500,000-$550,000 you can still get a partial exemption.

If the home you are purchasing is brand new and you are buying it from a builder or developer you don’t have to pay PTT on a purchase up to $750,000. That’s even more savings.

There is also the BC HOME Partnership Program available until March 31, 2018 where the BC Government will match your down payment to a maximum of $37,500.  It is an interest free loan for the first 5-years and while it sounds great there are only a few circumstances where I’ve found it to be beneficial to my clients.

You will still have to come up with your minimum 5% down payment and 1.5% of the purchase price in addition to cover closing costs. Closing costs include legal fees, Title Insurance, Land Title registration, possible appraisal fee and pre-payment of some, if not all, property taxes for one year.

The overall costs of a home purchase can vary but if you’d like more information on what you can expect to need for your ideal home purchase just give me a call, I’d love to help.