There are some great changes coming for transactions closing after April 1, 2024 for First Time Home Buyers. Let’s start with a definition of a First Time Home Buyer for this particular program, as the definition is different if you are accessing a Provincial or Federal Program. This is a Provincial program, so a First Time Home Buyer is someone who has NEVER owned a property, anywhere in the world before. If more than one person is buying the home and only one of you has previously been a home owner, you want to speak to your lawyer/notary as you can still take advantage of the program, although not to its fullest extent.
Here are the nuts and bolts of the old program and the new program:
Currently, when you purchase a property in BC everyone pays a property transfer tax of 1% on the first 200,000, 2% between $200,000 and $2,000,000 and 3% and higher above $2,000,000.
The current program allows a First Time Home Buyer (FTHB) to be exempt from this tax for purchases up to $500,000. You can immediately see the problem with this program as it now stands. It is very hard to find anything under $500,000.
The new program, starting April 1, 2024, allows the FTHB to purchase a home up to $835,000 and still claim the exemption up to $500,000. This will be a savings of up to $8,000 and get more FTHB into condos, houses and townhouses.
If you are one of the many people who are a FTHB, have the down payment saved but can’t find anything under $500,000, you can now go up to $835,000 and receive the tax exemption on part of the purchase. We can help you figure out your new down payment, get you reapproved and see what you can now qualify for to get into a home! Yay, this is a good program!