First-time buyers
The process of buying a home can be particularly stressful and challenging for first-time
buyers. Not only is this the biggest purchase in your life, not only are you
buying your first home but you are also going through the process for the very first
time. We can help you by providing you with proper legal advice, communicating
with you throughout the process, executing the transaction as well as referring you
to other professionals you may need.
There are two issues that are particular to first time buyers: Property Transfer Tax
exemption and the Federal Home Buyers’ Plan.
Property Transfer Tax exemption
PTT is a provincial tax payable by buyers of real estate at the rate of 1% on the
first $200,000 of the purchase price and 2% on the balance of the purchase price.
First-time buyers may qualify for a full or partial exemption of PTT.
To qualify for
the exemption, the buyer must:
• be a Canadian Citizen or permanent resident of Canada;
• have resided in BC for the last 12 months or filed income tax returns as a
resident of BC for two of the six taxation years proceeding the purchase;
• must be borrowing at least 70% of the purchase price for a term of at least
one year and the mortgage can not be reduced to less then 70% of the fair
market value of the property or by more then $13,000 in the first year; and
• must have never owned a principal residence anywhere in the world.
In addition, in order to qualify for the exemption, the purchase price of the property
must be below a certain amount. In Vancouver, a full exemption is available for
properties priced at $350,000 or less and a partial exemption is available for
properties priced between $350,000 and $400,000.
Home Buyers’ Plan
First-time home buyers qualify for the HBP. If you, or your spouse, have not owned
a principal residence for four years, you are a first time home buyer under the plan.
The HBP allows you to withdraw up to $20,000 from your RRSP to buy a principle
residence. The RRSP has to be repaid within 15 years.
Disclaimer
Please remember that the information provided on this website is not legal advice
and is intended as general information only. We try to keep this website as accurate
and up-to-date as possible but laws, regulations, policies and practice are
constantly changing. Please talk to one of our lawyers. Contact us |
