If you are a first time home buyer, you are eligible for some benefits:
Property Transfer Tax Exemption
One of the significant costs to the Buyer when purchasing a property in British Columbia is the Property Transfer Tax. This tax will be 1% on the first $200,000 and 2% on the balance of the purchase price of the property. If you are a first time home buyer, you may be exempt from the Property Transfer Tax.
You must be a Canadian Citizen or Permanent Resident, never owned an interest in a property, and never received a first time home buyer’s exemption to be eligible. Also, you must have lived in British Columbia for 12 consecutive months, or have filed 2 income tax returns as a British Columbia resident during the 6 years prior to the date you register the property. Lastly, the property must be under $500,000, 0.5 hectares or less, and be used as a principal residence.
Your notary or lawyer at time of registration of your property will submit an application for the exemption. For more details on first time home buyer exemption, check out www.gov.bc.ca.
RRSP Home Buyer’s Plan
As a first time home buyer, you may also withdraw your RRSP for a down payment. The RRSP issuers will not withhold income tax from these withdrawn amounts. Home buyer may withdraw up to $25,000 from their RRSP. If it is purchased jointly or with a spouse, then you may withdraw $25,000 each.
As for repayment, you must repay back the amount withdrawn within a 15 year period with a minimumcontribution of 1/15th of the withdrawn funds commencing a year after you withdrew the money.
*For eligibility for First Time Home Buyer’s Benefits and more information, it is recommended to speak to your bank, or seek legal advice.