There are two benefits provided to first time home buyer in British Columbia (BC):
- BC Property Transfer Tax exemption
The BC Property Transfer tax is equivalent to 1% of the first $200,000 of the purchase price and 2% of the amount above $200,000. This is a significant amount of money levied on any real estate transaction. For example, for a $300,000 purchase, the transfer tax is $4,000. As a qualified first time home buyer, you will not have to pay this tax
- Home Buyer's Plan
This is a program offered by the Federal Government that allows you to use up to $25,000 ($50,000 for spouses) of your Registered Retirement Savings Plan (RRSP) towards the down payment on a home. You can withdraw this money tax free from your RRSP. You'll need to pay back this money to your RRSP over the next 15 years.
In order to purchase a house in BC you are required to put down at least 5%. That means that the minimum down payment has not been affected by the new mortgage laws, but that only applies to primary residence. If you are buying an investment property than you will need to putdown a minimum of 20% as CMHC (Canadian Mortgage and Housing Corporation) no longer insures those type of properties. These rules apply not only to BC, but to all of Canada.
There are a lot more privileges and grants for First Time Buyers. If you have any other questions in regards to this matter, feel free to contact Chris Ata at 604.760.0207.