First Time Home Buyers
If you’re a first-time home buyer in this province (BC), there are few things that you should be aware of as you may be able to take advantage at this time. Nowadays there are two areas to first time home buyers: RRSP limitations and property purchase advantages. The first revolves around tax-free allowable withdrawals of up to $25K per person towards the purchase of a new home. This one isn’t so new anymore, as it’s been around for years.
Due to increased home prices in BC (specifically Lower Mainland), the Provincial Government has responded and provided a few additional advantages to those wishing to purchase a home for the very first time. Each month, I am asked on a regular basis what this is all about. Perhaps a few points will help you better understand what you’re working with:
- Reduction or Elimination of Property Transfer Tax (1)
- If two people are purchasing a home, they both do not have to qualify. However, the one that does qualify would gain an exemption based on their share of ownership in the property
- The property fair market value must be less than $525K
- This also applies with building a new home
- Provincial Loan Program (2)
- BC Government will loan up to 5% ($37,500) of the value of the home to new purchasers interest-free for the first 5 years
- Payments starts after 5 years at current interest rate, due after 25 years
- Applies to homes less than $750K
- Home Buyers Tax Credit
- A non-refundable tax credit of $5K is eligible to first time home buyer
If you’re thinking of purchasing a home for the first time in 2017, please don’t hesitate to give us a call. We’ll be happy to walk you through the process and provide the information you need to help you better understand which of these advantages you can benefit from.