First Time Buyers (Video)

Congratulations, you have made the decision to buy your first home. We want to help make the process as easy and understandable as possible. We’ve included on this page some information that is of particular importance to First Time Buyers.

We know how stressful the process can be so don’t hesitate to call our offices and speak to us for any further assistance. You’re making a big investment so make sure you ask for advice. Bell Alliance acts for clients primarily in Vancouver and the Lower Mainland of British Columbia but the information provided applies throughout B.C. We also act for clients outside of B.C. where we utilize technology to streamline the closing process.

Our number one recommendation to First Time Buyers is to make sure you create your team of professional advisors including your realtor, mortgage broker, lender and lawyer or notary.

Property Transfer Tax

Property Transfer Tax is a provincial tax applied against purchases of real estate in the province at the rate of 1% on the first $200,000 of the purchase price and 2% on the balance. The tax is submitted at the time of registration of the transfer in the land title office and the amount required must be provided to your lawyer or notary.

There is a full or partial exemption for “first time buyers”. There are number of criteria to qualify for the exemption and the purchase price determines whether or not it is a full or partial exemption. The main criteria are that buyers must be Canadian citizens or permanent residents of Canada; have resided in B.C. for a least 12 months or filed income tax returns as a resident of B.C. for 2 of the 6 taxation years immediately prior to registration of the transfer; and never previously owned a principal residence anywhere in the world. The full exemption is available for properties with a purchase price of $425,000 or less and a proportionate exemption is available for properties with a purchase price between $425,000 and $450,000. There is no exemption on properties with a purchase price greater than these thresholds. (For a comprehensive discussion see The First Time Buyers’ Guide.)

Home Buyer’s Plan

The Home Buyers’ Plan is available to “first time buyers”. Unlike the Property Transfer Act, a purchaser can qualify as a “first time buyer” more than once if they or their spouse have not owned a principal residence for approximately four years. The Home Buyer’s Program allows a first time buyer to withdraw up to $25,000 without paying tax on the withdrawn amount. The home being purchased must be a principal residence, can be existing or being built and the RRSP must be repaid within 15 years with minimum payments of 1/15th of the withdraw amount. (For a comprehensive discussion see Home Buyers’ Plan.)

First Time Buyers are usually looking for answers to the following questions:

• Do I qualify for an exemption under the provincial Property Transfer Tax?

• Can I take money out of my RRSP under the federal Home Buyers’ Plan?

• What are my Closing Costs and adjustments going to be?

• I’m buying a new condo, can I claim a GST rebate?

• I have a binding Contract of Purchase and Sale and been approved for a mortgage, what is the process when dealing with a lawyer or notary?