Buying your first home is an exciting and daunting proposition, especially in consideration of affordability. That’s why it is important to know all of the rebates, discounts, and advantages afforded to you by the Provincial and Federal governments. Below are some examples:
- The BC government has been offering a bonus, to a maximum $104,000, of 5% of the purchase price of a new construction home. This is available to first-time buyers and is not cash back, but a credit of $10,000 against your taxes to reduce your taxable income. This bonus was created to offset the increased prices of new homes after the introduction of the HST. As such, with the elimination of the HST on April 1, this bonus expires on March 31, 2013.
- The Property Transfer Tax (PTT) is applied to property purchases as 1% of the first $200,000 and 2% of everything above $200,000. As a new buyer never having previously owned anywhere in the world, the PTT is waived when you buy a home valued below $425,000. Between $425,000 and $450,000 there is a sliding scale of the applicability of the tax.
- If you have been saving to your RRSP, if you are a new buyer, or have not owned in the last four years, you can borrow up to $25,000 tax free from your RRSP to use as a down payment towards a purchase.
- The Home Buyers Tax Credit (HBTC) is a cash credit of $750 from the BC government and is available to any first-time home buyer, or anybody who has not owned in the last four years.
Most people would agree that renting, though often necessary, is just paying somebody else’s mortgage. And not everybody knows about the incentives offered to help you make the plunge into ownership. But there’s help out there, so best to be aware.