Tax Breaks For New Home Buyers In BC

Fortunately, not all is lost! There are some tax breaks available for new home buyers. If you’re planning on purchasing a new home, here’s what you need to know about taxes when purchasing a home in British Columbia.

The Good News: There Are Some Tax Breaks For New Home Buyers

First and foremost, the good news is, the government acknowledges that the costs involved in purchasing a home are significant. This is, after all, the largest investment most people will ever make. As such, many homeowners are eligible for tax breaks when purchasing a home. The first tax break is the New Housing Rebate. This tax break applies to individuals who are purchasing a newly built home. In this case, your builder will issue you a certificate that shows the amount of the rebate that applies to you. If you’re purchasing a resale home, you can claim the rebate by completing the New Housing Rebate form. You’ll find this form on the government’s website. Please note, the New Housing Rebate is a one-time payment. You can only claim it once in your lifetime. If you purchased your first home, but then move and purchase a new home, the New Housing Rebate will not apply to you.

First-Time Home Buyer Advance Or Repayment Program

Another tax break available to first-time home buyers is the First-Time Home Buyer Advance or Repayment Program. To qualify for this program, you must be a first-time home buyer, own or purchase a home in the province of BC, and enter into a qualifying repayment agreement with the government. During the first year that you own a home, the government will advance you up to $37,500. However, you must repay this amount in full, plus interest, over the next 10 years. The amount is calculated based on your family income. If your family income is $80,000 or less, you’ll pay a set amount per month. If your family income is higher than $80,000, you’ll pay a percentage of your family income.

GST Tax On Purchased Property And Settlement Fees

When purchasing a newly built home, you must pay GST on the purchase. This amount is 5 percent of the purchase price. In order to claim these GST amounts back, you’ll need to complete and submit a GST/HST Rebate application form. You can find the form on the government’s website. The amount of the GST/HST rebate will depend on several factors, including your family income, the purchase price of the home, and whether the home is new or resale.

Repayment Of The Provincial New Housing Rebate

Another tax break available to new home buyers is the Provincial New Housing Rebate. This tax break applies to individuals who purchase a newly built home. To qualify for the new housing rebate, you must purchase a new home, intend to live in the home as your principal residence, enter into a qualifying repayment agreement with the government, and apply to receive the tax break within one year of closing on the home. The amount of the rebate will depend on whether you purchased a single-family home or a multi-family building.

Conclusion

If you’re planning on purchasing a new home, it's important to know there are a number of tax breaks buyers can take advantage of.  Consult with your Realtor to make sure you are aware of what is available to you. 

If you have questions about this article or about the home buying process feel free to contact us anytime. we're always here to help!