Owning your first home can seem like a daunting undertaking, however, there are programs in Canada, as well as specifically in BC, which incentivize first time home buyers making the process easier and putting the prospect of owning your first home closer than ever before. Whether you're looking for an older home as a first-time buyer, or purchasing a newly built home, or looking to benefit from tax credits and savings accounts, these first-time buyer programs can significantly reduce your financial burden and help you achieve your homeownership goals.

Below we discuss:

1. BC Property Transfer Tax for First Time Home Buyers buying resale properties

2. BC Property Transfer Tax for First Time Home Buyers buying newly built homes

3. The BC Home Owners Grant

4. Home Buyers’ Plan

5. Tax-Free First Home Savings Account

6. First-Time Home Buyers’ Tax Credit (HBTC)

Dive into our comprehensive guide to discover the incentives available to first time home buyers and how you can take advantage of these opportunities and make homeownership a reality.

BC Property Transfer Tax (PTT) First-Time Home Buyers’ Program

Property Transfer Tax (PTT) is a land registration tax. It must be paid buy the Buyer, on the date of registration when there is a change to a certificate of title, at any Land Title Office in British Columbia.

The typical formula to calculate the PTT is the total sum of:

1% on the first $200,000

2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000

3% on the portion of the fair market value greater than $2,000,000, and

If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000

On a $1,000,000 home, this would typically equate to $18,000 of property transfer tax.

However, as a first time home owner, you may meet certain PTT exemptions which can lower the amount of property transfer tax you would have to pay. As of April 1, 2024, qualifying first time home buyers buying resale properties up to $835,000, have the first $500,000 of the fair market value exempt from PTT. This equals roughly an $8,000 reduction in tax. Homes purchased between $835,000 and $860,000 also have a reduction in tax, however, this amount is is less than the full $8,000, and is graduated as per the table below.

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https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers/current-amount#current-exempt

BC Property Transfer Tax Newly Built Home Exemption

If you’re considering buying a newly built home - or newly subdivided - you may also qualify for an exemption on your property transfer tax. As of April 1, 2024, qualifying buyers of new homes priced up to $1,100,000 may have their property transfer tax waived completely while homes priced up to $1,150,000 may be eligible for a partial exemption.

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https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/newly-built-home-exemption/exemption-amounts

The BC Home Owner Grant For Property TAxes

In the City of Vancouver, home owners need to pay their property taxes in installments every year. The first installment is due at the beginning of February, and the second, and last, payment is due on July 2nd. Qualifying properties which are a home owners primary residence, may be eligible for a grant to reduce the amount of property tax payable each year (n.b. to receive the grant, in 2024, the assessed value for a qualifying property must be below $2,150,000).

The regular grant amount is $570 for properties located in the Capital Regional District, the Metro Vancouver Regional District and the Fraser Valley Regional District. For all other areas of the province the grant amount is $770.

If your property is assessed below the threshold (i.e. $2,150,000 in 2024) and you meet certain qualification criteria, you will receive the full regular grant amount. If your property is assessed over the threshold, you may receive a partial grant. You can learn more about the grant threshold here.

Property owners who may qualify for the additional home owner grant instead of the regular grant (for example seniors, veterans, or persons with a disability) must pay at least $100 in property taxes before receiving the grant.

These minimum amounts of property taxes fund services such as road maintenance and police protection.

Note: The grant amounts may be adjusted to ensure the minimum amount of $350 of annual taxes are paid.

Home Buyers’ Plan

The Home Buyers’ Plan (HBP) is a program wherein you may withdraw up to $60,000 (couples up to $120,000) from your registered retirement savings plan (RRSP) to put towards the purchase of your principal residence. To be eligible to make the withdrawal from your RRSPs, you must meet the conditions of both the Home Buyers’ Plan (HBP) and the RRSP withdrawal conditions (or, you are helping a related person with a disability buy or build a qualified home).

In order to meet the HBP eligibility conditions, you must be a first-time home buyer and you must have a written agreement to buy or build a qualifying home. Moreover, you (or the related person you are helping to buy or build a qualifying home) must intend on occupying the qualifying home as your/their principal residence within one year after buying or building it.

More information from the Home Buyers’ Plan from the Canada Revenue Agency can be found here.

Tax-Free First Home Savings Account

It takes years to build up a down payment to put towards a home. However, one of the initiatives that came out in 2023, was the Tax-Free First Home Savings Account. This enables qualifying first time home buyers to contribute a maximum of $8,000 a year (to a maximum of $40,000) for the purpose of putting it towards a down payment on a home. This contribution is tax-deductible, and capital gains (your earnings from the savings) and interest are tax-free. More information on this program can be found here.

First-Time Home Buyers’ Tax Credit (HBTC)

Eligible home buyers can claim up to $10,000 on Line 369 of Schedule 1 when filing their income tax & benefit returns. For homes purchased on or after January 1, 2022, the maximum home buyers’ tax credit (HBTC) is $1,500, calculated by multiplying the home buyers’ amount of $10,000 by the federal non-refundable tax credit rate of 15% (equal to the lowest personal income tax rate for the year). More information on qualifying homes for this tax credit can be found here.

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If you found this summary of programs and grants available to first-time home buyers helpful, or want to discuss how you can become a first-time home buyer, reach out to us. We would love to hear from you! If you think someone else might find it helpful, please forward this to them, or put us in touch.