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First Time Home Buyers' Program

Posted by Ron Neal on Wednesday, February 19th, 2014 at 3:51pm.

Property Transfer Tax Exemption Level has increased to $475,000 for qualified first time BC Resident buyers and partial exemptions available for more in some cases! The First Time Home Buyers' Program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax. If one or more of the purchasers don’t qualify, only the percentage of interest that the first time home buyer(s) have in the property is eligible. For example, if you qualify and purchase a property with a fair market value of $400,000 with a person that doesn’t qualify you would still qualify. If you owned a 60% interest in the property, 60% of the tax amount would be eligible for the exemption. To qualify for a  full exemption at the time the property is registered you must:

  • be 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
  • you have never received a first time home buyers' exemption or refund

and the property must:

  • be located in B.C.
  • only be used as your principal residence
  • have a fair market value of:
  • $425,000 or less if registered on or before February 18, 2014, or
  • $475,000 or less if registered on or after February 19, 2014
  • be 0.5 hectares (1.24 acres) or smaller

You may qualify for a partial exemption from the tax if the property:

  • has a fair market value less than:
  • $450,000 if registered on or before February 18, 2014, or
  • $500,000 if registered on or after February 19, 2014
  • is larger than 0.5 hectares
  • has another building on the property other than the principal residence

If you don’t qualify because you are not a Canadian citizen or permanent resident, but you become one within 12 months of when the property is registered, you may apply for a refund of the tax. To apply for a refund call (250) 387-0604.

Apply

To apply for the First Time Home Buyers' Program you need to complete the First Time Home Buyers' Property Transfer Tax Return when you or your legal professional register the property transfer. After you have applied you must meet additional requirements during the first year you own the property to keep the tax exemption.

Penalty for False Declaration

All applications are reviewed. You will be charged a penalty equal to double the tax if you falsely declare that:

  • you have never owned an interest in a principal residence anywhere in the world at any time, or
  • you have never received a first time home buyers' exemption or refund

 First Year of Ownership

At the end of the first year you own the property you will receive a letter. The letter is to conditionally confirm that you meet the occupancy and property value requirements after you:

  • purchased an existing home, or
  • purchased vacant land and built a home

Existing Home

To keep the tax exemption you must have:

  • moved into your home within 92 days of the date the property was registered
  • continued to occupy the property as your principal residence for the remainder of the first year

You may keep part of the exemption if you moved out before the end of the first year. If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you still qualify to keep the tax exemption.

Built New Home

If you registered a vacant lot and built your own home, to keep the tax exemption:

  • the fair market value of the land when you registered the property plus the cost to build your home must be:
  • $450,000 or less if registered on or before February 18, 2014, or
  • $500,000 or less if registered on or after February 19, 2014
  • you must have built and moved into your home within 1 year of the date the property was registered
  • you must have continued to occupy the property as your principal residence for the remainder of the first year

You may keep part of the exemption if you moved out before the end of the first year. If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you still qualify to keep the tax exemption.

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The Neal Estate Team

The Neal Estate Team is your #1 source for all of your Victoria BC real estate needs. Get in touch with us online or by phone at (250) 386-8181 to speak with a Victoria real estate buying or selling expert today. With decades of experience as a top selling Victoria REALTOR® and ranked in top 1% globally with over 4,000 transactions and $1 Billion SOLD, Ron Neal & The Neal Estate Team have the industry experience and market knowledge to help you make smart and informed buying or selling decisions. 


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