Buying a home can be challenging and stressful for a first time home buyer. After all, there are so many steps, tasks, and requirements, You are not sure how much funds are required, how much do you qualify for, whether you will be able to afford the payments, and what is the Cost Involved besides the Down payment.
But first-time homebuyers actually enjoy some special advantages created to encourage new entrants into the real estate market.
The First-Time Homebuyer Advantage
Buying a home is still considered a key aspect of the Canadian dream. As a first-time buyer, you have access to Purchase Transfer Tax exemptions. First time Home Down payment Programs and Government backed Loans. If you don’t have the usual minimum down payment—ideally 20% of the purchase price for a conventional loan. you may qualify as a first-time buyer and take advantage of as little as 5% down payment, You may also qualify to buy a home a home even if you are not a first time buyer, Ask us How.
Who is Classified as a First Time Buyer
- A Canadian citizen or permanent resident
- have lived in B.C. for 12 consecutive months immediately before the date you register the property OR filed at least 2 income tax returns as a B.C. resident in the last 6 years
- have never owned an interest in a principal residence anywhere in the world at any time
- have never received a first time home buyers’ exemption or refund
and the property must:
- be located in British Columbia.
- Can only be used as your principal residence
- have a fair market value of $500,000 or less
- is (1.24 acres) or smaller
Foreign entities and taxable trustees are not eligible for the exemption.
However if you BECOME PERMANENT RESIDENT within 12 months of when the property is registered
What are the Benefits
- The Home Buyers’ Tax Credit currently works out to a rebate of $750 for all eligible first-time home buyers.
- The Canadian government’s Home Buyers’ Plan (HBP) allows first-time buyers to borrow up to $35,000 from your RRSP for a down payment, tax-free!
- If you qualify, land transfer tax rebates are available to first-time home buyers to BC residents for properties less then $500,000.
- If you buy your home before it’s built, or if you substantially renovate an existing home, you could qualify for a rebate for a portion of the sales tax. The GST/HST new housing rebate amount you can qualify for depends on the purchase price of the home, and can only be claimed if the net purchase price is $750,000 or less.
Now you have learnt about potential savings as a first time buyer, you are thinking what next, mortgage?, Variable vs fixed (what’s the difference), What amortization should you get, Is you Mortgage open or closed, what is a term, pre-payment privilege and accelerated payment.
To answer your questions regarding this next step, we created a complete blog post. Our team have all either went through the homebuying process, are going through it or one day hope to, and we’ve you covered (read our blog post) “What is a Mortgage”!!