The First-Time Home Buyer Programs in BC You Need To Know
The First-Time Home Buyer Programs in BC You Need To Know
In recent years, both the federal and provincial governments in Canada have introduced and enhanced programs to assist first-time homebuyers in navigating the increasingly challenging real estate market. These initiatives aim to make homeownership more attainable by offering financial support, tax incentives, and favorable mortgage terms. Below is an overview of the key programs available to first-time homebuyers in British Columbia (BC), detailing their purpose, eligibility criteria, and recent developments.
1. BC First-Time Home Buyers' Program
Purpose: This provincial program reduces or eliminates the property transfer tax for qualifying first-time homebuyers, thereby lowering the initial costs associated with purchasing a home.
Eligibility: As of April 1, 2024, the program offers a full exemption for homes valued up to $835,000, with partial exemptions available for homes valued between $835,000 and $860,000. To qualify, applicants must be Canadian citizens or permanent residents, have lived in BC for at least a year immediately prior to the purchase, and have never owned a principal residence anywhere in the world.
Government of British Columbia
Recent Developments: The threshold increase from $500,000 to $835,000 reflects the government's response to rising property values, aiming to make the program accessible to a broader range of first-time buyers.
Government of British Columbia News
2. Home Buyers' Plan (HBP)
Purpose: A federal initiative that allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plans (RRSPs) to finance the purchase or construction of a home, without immediate tax penalties.
Eligibility: Participants can withdraw up to $60,000 from their RRSPs, an increase from the previous limit of $35,000, as announced in Budget 2024. Withdrawn funds must be repaid into the RRSP over a 15-year period to avoid tax implications.
Government announces boldest mortgage reforms in decades to unlock homeownership for more Canadians
Recent Developments: The increased withdrawal limit aims to provide first-time buyers with greater access to their savings, facilitating larger down payments and reducing mortgage amounts.
3. First Home Savings Account (FHSA)
Purpose: Introduced in 2023, the FHSA is a federal program designed to help Canadians save for their first home by combining the benefits of a Tax-Free Savings Account (TFSA) and an RRSP.
Eligibility: Canadians aged 18 to 71 who have not owned a home in the current or preceding four calendar years can contribute up to $8,000 annually, with a lifetime limit of $40,000. Contributions are tax-deductible, and withdrawals for a first home purchase are tax-free.
Recent Developments: The FHSA offers a new avenue for first-time buyers to accumulate savings efficiently, complementing existing programs like the HBP.
4. 30-Year Insured Mortgages for First-Time Buyers of New Builds
Purpose: This federal measure allows first-time homebuyers purchasing newly constructed homes to access insured mortgages with amortization periods of up to 30 years, thereby reducing monthly mortgage payments.
Eligibility: Effective August 1, 2024, this option is available to first-time buyers with down payments of less than 20% on new builds. The extended amortization period aims to improve affordability by lowering monthly obligations.
Recent Developments: By extending the amortization period, the government seeks to alleviate financial pressure on first-time buyers and stimulate the construction of new housing units.
5. Métis First-Time Homebuyers Program
Purpose: Offered by the Métis Financial Corporation of BC, this program provides financial assistance to Métis citizens in BC for down payments and closing costs associated with purchasing their first home.
Eligibility: Applicants must be registered Métis citizens in BC and first-time homebuyers. The program offers a one-time grant to eligible individuals, enhancing access to homeownership within the Métis community.
Recent Developments: This initiative underscores the commitment to supporting Indigenous populations in achieving homeownership, addressing unique barriers faced by these communities.
6. First-Time Home Buyers' Tax Credit (HBTC)
Purpose: A federal non-refundable tax credit designed to assist first-time homebuyers with the costs associated with purchasing a home.
Eligibility: Eligible individuals can claim a $10,000 non-refundable income tax credit, resulting in up to $1,500 in federal tax relief. This credit is intended to offset some of the initial expenses of homeownership.
Recent Developments: The HBTC continues to provide financial relief to first-time buyers, complementing other federal and provincial programs aimed at reducing the financial barriers to homeownership.
See What You Qualify For Or Contact Paul To Get Your Pre-Approval.
Paul Davidescu (www.levelupmortgages.com)
Level Up Mortgages
604-809-3188
paul(at)levelupmortgages.com
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BOTTOM LINE
The landscape of first-time homebuyer programs in BC has evolved significantly, with both federal and provincial governments implementing measures to address affordability challenges. These programs offer a range of financial supports, from tax credits and savings plans to favorable mortgage terms, all designed to make the dream of homeownership more attainable for Canadians entering the housing market. Prospective buyers are encouraged to explore these options thoroughly to determine their eligibility and maximize the benefits available to them.
Level Up Mortgages is a mortgage broker team focused on helping the self employed, new immigrants, non-residents, and investors, access best rate and alternative lending in Canada. We have been nominated for best up and coming broker in Canada in 2021 and have been on CTV News and various publications because of our education-first approach to helping you always stay a step ahead of the process. Reach out to us for access to our first-time buyer course or a mortgage strategy session.