In their 2021 budget, the Liberals have proposed to increase the maximum home price for the CMHC First-Time Home Buyer Incentive from about $505,000 to $722,000 for buyers in Toronto, Vancouver, and Victoria. Their proposals include an increase in the income eligibility threshold from $120K to $150K and the home price limit from 4 times household income to 4.5 times. These changes come as Toronto`s housing market and Vancouver real estate climb to new all-time highs.
These changes are still preliminary and have not been approved by Parliament. We have updated our calculator to help you prepare for these new changes.
The Government of British Columbia provides rebates on land transfer taxes for first-time home buyers. The amount that you can qualify for depends on the value of the property.
If the value of the home that you are purchasing has a fair market value of less than $500,000, then the First Time Home Buyers’ Exemption would cover the full amount of the transfer tax. That means you will not have to pay any land transfer tax. Afterwards, a sliding scale is used up to $525,000 to determine the land transfer tax incentive and the remaining tax payable (see the chart below). Properties above $525,000 will not qualify for the First-Time Home Buyers’ Program.
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To qualify as a first-time home buyer, you must have never owned or had an interest in a home anywhere in the world previously.
To qualify, you must be a Canadian citizen or a permanent resident, and have lived in B.C. for 12 consecutive months or filed at least two income tax returns as a B.C. resident in the past six years. If you are not a Canadian citizen or a permanent resident, you can still qualify for the transfer tax exemption if you become one within 12 months. The property that you are purchasing must be located in B.C. and be used as your principal residence.
To qualify for the full land transfer tax exemption, the property must be 0.5 hectares or smaller and have a market value of $500,000 or less. You can still qualify for a partial land transfer tax exemption if the property is larger than 0.5 hectares or the market value is less than $525,000.
The provincial government also offers additional tax rebates for all homeowners. The BC Home Owner Grant provides a $570 annual property tax grant for people living in Victoria, Vancouver, and the Fraser Valley if your assessed property value is less than $1,525,000. People living outside of those areas will receive a grant of $770. You can receive additional grants if you are a senior, a veteran, or a person with disabilities. The BC Newly Built House Exemption also reduces the property tax payable on newly built homes.