In the competitive market we face today, purchasing a home can be a daunting task. There are a few things to be aware of that can help make it a little less daunting. The First Time Home Buyers Plan and some new advantages that were recently introduced by the Provincial Government help soften the blow.
To help make this overwhelming transaction a little less arduous, the federal government allows first time home buyers to withdraw $25,000 from their hard earned RRSPs, tax free. These funds do need to repaid back into the RRSP over a 15 year period or the portion due could become taxable. An eligible couple could potentially withdraw a total of $50,000 between the two of them towards the purchase of a First Time Home. For more information on HBP eligibility and repayment schedules click here.
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 first time. These additional advantages are:
- British Columbia First Time Home Buyers’ Program
- Not to be confused with the Federal HBP mentioned above – This program reduces or eliminates the transfer tax paid on the purchase of a first home
- For details on what differentiates eligibility for elimination vs reduction click here.
- Those who qualify would gain an exemption based on their share of ownership in the property. If there are two people purchasing the home, both do not have to be eligible to qualify.
- The property fair market value must be less than $525K
- This also applies with building a new home
- B.C. Home Owner Mortgage and Equity Partnership
- The BC Government will loan up to 5% of the value of the home (to a maximum of $37,500) to new purchasers interest-free for the first 5 years
- At the end of the 5 year term, the loan can be repaid or begin monthly payments at current interest rates. Payments start after 5 years at current interest rate
- Applies to the purchase of homes less than $750,000
- For more details click here
If you’re thinking of purchasing a home for the first time in the near future, 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.