I am often approached by people looking to get in to the property market for the first time and they are freaked out regarding the process ahead. With the right Vancouver realtor on your side they can help you through the whole process as well as help you maximize all potential benefits.
There are 3 major benefits to being a first time home buyer in BC. In order of biggest financial benefit:
Property Transfer Tax Exemption
Home Buyers Plan (HBP) – Using RRSP’s to buy a property
Home Buyers Tax Credit (HBTC)
Property Transfer Tax or PTT is a BC tax grab that has been an amazing source of revenue for the provincial government. The PTT is calculated as 1% on the first $200,000 and 2% on the balance. The only time you can get out of this tax is when you are a first time home buyer looking at properties up to $475,000. There is a sliding scale for the benefit up to $500,000 purchase price, but for full benefit you need to be looking to purchase a home for $475,000 or less. This benefit can keep almost $8000 in your pocket. http://www2.gov.bc.ca/gov/topic.page?id=BBD16E2D7C1841A7BBD420E3AC5380F1
The second benefit is The Home Buyers Plan. The Home Buyers Plan lets first time buyers take up to $25,000 per person out of their RRSP with no tax implication… but these funds must be paid back over 15 years in yearly installments. The value of this can be huge depending on your tax bracket and your financial plans moving forward… I highly recommend talking to not only a real estate professional about this, but also your account and financial advisor. http://www.cra-arc.gc.ca/hbp/
3rd, the Home Buyers Tax Credit gives you a $5000 tax credit that is applicable towards the lowest tax rate in any given year. So the cash value to you is roughly $750. Again, I recommend talking to your account about this, and definitely remind them of your first time home purchase when doing up your taxes for the following year. http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html
All of these benefits have different criteria and rules to qualify… make sure you check the links provided or talk to your Vancouver Realtor to make confirm the current and most accurate info.
Vancouver Realtor - Pete Shpak