BC Govt. Announces up to $10,000 Tax Break for First Time Home Buyers
A new tax break for first-time buyers of new homes will help stimulate the construction industry and create plenty of new jobs, an industry executive said of Tuesday’s 2012 provincial budget.
“This is welcome news,” Greater Vancouver Home Builders’ Association president and chief executive officer Peter Simpson said of a temporary bonus for first-time homebuyers that will be effective until March 31, 2013, and is worth up to $10,000.
“They have a difficult time getting into the market and typically get assistance from the bank of Mom and Dad. So this helps property virgins get on the first rung of home ownership and helps stimulate construction.
“For every home start, there are approximately three full-time jobs each year.”
The bonus, a one-time refundable personal tax credit, is equal to five per cent of the purchase price of the home to a maximum of $10,000.
The bonus will be reduced based on a buyer’s or couple’s net income. For single people, the bonus is reduced by 20 cents for every dollar in net income over $150,000 (it’s reduced to zero at $200,000 net income). For couples, the bonus is reduced by 10 cents for every dollar in family net income over $150,000 (it’s zero at $250,000 family net income).
The bonus, which includes detached houses, duplexes, townhouses, condos, mobile homes, floating homes and cooperative housing units, is based on homes where the HST is now payable.
This credit is in addition to first time home buyers rebate of BC Property Transfer tax on Homes up to $425,000 (normally 1% of the first $200,000 and 2% of everything over that, of the purchase price) for BC residents. Additionally, the buyers in this price range are eligible for a reduction of 36% of all GST paid on new homes priced up to $350,000. This means that a first time home buyer purchasing a home for $250,000 would be eligible for a $10,000 tax credit, a $4,500 reduction on the Federal portion of the HST, a $12,500 reduction on the Provincial portion of the HST and a $3,000 rebate on the Property Transfer Tax.