BC First Time Home Buyer Programs

The First Time Home Buyers Program in BC is a tax credit that allows qualified first-time homebuyers to eliminate or reduce their property transfer tax (PTT) liability on a home purchase.

When you buy a home in BC, you’re required to pay the PTT.

When you register your property with the Land Title Office, your legal representative must concurrently file a PTT return, and you must pay the amount owing.

Your PTT obligation is based on the fair market value of your home and comprised of four brackets:

  • 1% on the value up to and including $200,000
  • 2% on the value above $200,000 and up to and including $2 million
  • 3% on the value above $2,000,000 and up to and including $3 million
  • 2% on the value above $3 million.

Under the First Time Home Buyers’ Program, you’ll be exempt from paying the entire PTT charged on your home purchase if its value is $500,000 or less.

The exemption translates to a maximum of $8,000 in tax savings ($200,000 x 1% + $300,000 x 2%).

As you can see, the PTT is a major outlay that can significantly add to the already high cost of acquiring a home.

By enrolling in the BC First Time Home Buyers Program, you can realize substantial cost savings that will ease the financial burden of homeownership.

First time home buyer with keys

Qualifying for the First Time Home Buyers Program

To qualify for the First Time Home Buyers program in BC, you must:

  • Be a Canadian citizen or permanent resident.
  • Have lived in BC for a minimum of one year or filed at least two income tax returns during the past six years as a BC resident.
  • Have never owned a property that was your principal residence anywhere in the world.
  • Have not previously received a first-time home buyers’ exemption or refund.

Additional criteria apply to your property:

  • You must intend to use it as your principal residence.
  • Its fair market value must be $500,000 or less
  • It must be no greater than 0.5 hectares in size.

Applying For The First Time Home Buyers Credit

To apply for the PTT exemption, you must declare that you’re a first-time home buyer and show that you meet all the eligibility requirements.

You provide these details on your PTT return, which your lawyer will complete and submit on your behalf.

Once the PTT return has been processed, you must meet further requirements during your first year of ownership to retain the tax exemption.

For an existing home, the criteria are:

  • You must have moved in within 92 days of registering the property
  • You used the property continuously as your primary residence for the duration of your first year

For a newly built home you constructed on a vacant plot of land you purchased and registered, the criteria are:

  • The combined fair market value of the land and home must be less than $525,000
  • You must have built and moved into the home within one year of registering it
  • You continuously occupied the property as your primary residence for the whole year

Suppose you didn’t apply for the tax exemption on your PTT form when you registered your home.

In that case, you can still apply for a refund, provided you meet all the eligibility requirements.

You have up to 18 months from the first anniversary of your registration to claim your PTT refund and can do so by submitting the First Time Home Buyers’ Application for Refund form with any necessary documentation.

Restrictions To Be Aware Of

A crucial aspect of the First Time Home Buyers’ program to understand is that it primarily benefits those who purchase a home with a fair market value of up to $500,000.

If your property’s value doesn’t exceed this threshold, you’re entitled to the maximum exemption, which will bring down your PTT liability to $0.

What if your home’s value exceeds $500,000? In that case, the exemption is applied on a sliding scale, and it disappears entirely for every dollar of value above $525,000 (similar rules apply if your property occupies more than 0.5 hectares).

As a result, homebuyers who purchase lavish homes won’t derive any benefits from the program.

For example, suppose your home is worth $515,000.

In that case, you’ll receive a partial exemption of $3,320, which means your total PTT liability will be $4,980.

You can view a table of the reduced rates at various price levels here.

Under certain circumstances, only a portion of your home will be eligible for the First Time Home Buyers’ program.

Let’s say you purchase a property jointly with another individual who doesn’t qualify as a first-time homebuyer.

In this scenario, if both of you have a 50% interest in the home, only 50% of it would be eligible for the exemption.

As a result, the maximum tax savings the program would yield is $4,000 ($8,000 x 50%).

The sliding scale would apply accordingly on the eligible portion of the property.

Continuing with our example above, a home worth $515,000 would be eligible for a partial exemption of $1,660, resulting in tax payable of $6,640.

You can view a table of the reduced rates where only 50% of the home is eligible for the tax exemption here.

Frequently Asked Questions

  • Who qualifies as first-time home buyer in BC?
  • Do first time home buyers pay GST in BC?
  • Yes, first-time homebuyers pay GST on property purchases in BC. Generally, GST is charged only on purchasing a new home in BC – previously used homes are exempt. In exceptional cases, GST applies to used homes that have undergone extensive renovation.

    Homebuyers can recoup some of the GST paid on a home purchase by applying for the GST/HST New Housing Rebate (though only homes valued at $450,000 or lower qualify). The rebate is calculated as 36% of the GST paid and capped at $6,300.

Mark Gregorski

Mark is passionate about educating people on how the financial markets work and providing tips to help them better manage their money. Mark holds a bachelor’s degree in finance from the Northern Alberta Institute of Technology and has more than a decade of experience as an accountant.

Outside of writing and finance, he enjoys playing poker, going to the gym, composing music, and learning about digital marketing.