First Time Home Owners
If you are a first time home buyer, you are eligible for some benefits:
1) Property Transfer Tax Exemption
- One of the significant costs to the Buyer when purchasing a property in British Columbia is the Property Transfer Tax. This tax will be 1% on the first $200,000 and 2% on the balance of the purchase price of the property. If you are a first time home buyer, you may be exempt from the Property Transfer Tax.
- You must be a Canadian Citizen or Permanent Resident, never owned an interest in a property, and never received a first time home buyer’s exemption to be eligible. Also, you must have lived in British Columbia for 12 consecutive months, or have filed 2 income tax returns as a British Columbia resident during the 6 years prior to the date you register the property. Lastly, the property must be under $475,000, 0.5 hectares or less, and be used as a principal residence.
- Your notary or lawyer at time of registration of your property will submit an application for the exemption. For more details on first time home buyer exemption, check out:
2) RRSP Home Buyer’s Plan
- As a first time home buyer, you may also withdraw your RRSP for a down payment. The RRSP issuers will not withhold income tax from these withdrawn amounts. Home buyer may withdraw up to $25,000 from their RRSP. If it is purchased jointly or with a spouse, then you may withdraw $25,000 each.
- As for repayment, you must repay back the amount withdrawn within a 15 year period with a minimum contribution of 1/15th of the withdrawn funds commencing a year after you withdrew the money.
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