Navigating the First Time Home Buyers’ Program in British Columbia
Are you dreaming of owning your first home in British Columbia? The first time home buyers’ program might be the key to making that dream a reality. This initiative aims to ease the burden of property transfer tax for eligible individuals, providing either a full or partial exemption. Let’s delve into the details to see if you qualify and how to navigate the process.
To be eligible for a full exemption, you must:
- Be a Canadian citizen or permanent resident.
- Have either:
– Lived in B.C. for at least a year immediately before registering the property.
– Filed at least 2 income tax returns as a B.C. resident in the last 6 taxation years before
the registration date.
- Never have owned a registered interest in a property that was your principal residence anywhere in the world.
- Never have received a first-time home buyers’ exemption or refund.
Additionally, the property must:
- Only be used as your principal residence.
- Have a fair market value of $500,000 or less.
- Be 0.5 hectares (1.24 acres) or smaller.
You may still qualify for a partial exemption if the property has a fair market value less than $525,000, is larger than 0.5 hectares, or has another building on the property other than the principal residence.
How to Apply?
Your legal professional will handle the exemption application in the property transfer tax return. If you become a Canadian citizen or permanent resident within a year of the registration date, you can apply for a refund of the property transfer tax.
Ensure you meet additional requirements during the first year of property ownership to retain the tax exemption. Failure to do so may result in penalties.
After Applying: What’s Next?
Whether you purchased an existing home or built a new one, there are specific requirements to maintain the tax exemption:
For an Existing Home:
- Move into your home within 92 days of the registration date.
- Continuously occupy the property as your principal residence up to the first anniversary of the registration date.
For a Newly Built Home:
- The fair market value plus the cost to build must be less than $525,000.
- Build and move into your home within the first anniversary from the registration date.
- Continue to occupy the property as your principal residence up to a date no earlier than the first anniversary of the registration date.
If circumstances change due to the owner’s passing or property transfer through a separation agreement or court order under the Family Law Act, you may still qualify for the tax exemption.
If you qualify but didn’t apply during the initial registration, you can apply for a refund from the first anniversary to 18 months after the registration date. Simply complete, print, and sign the First Time Home Buyers’ Application for Refund (FIN 265) and submit it with the required documentation.
Embark on your homeownership journey with the support of the First Time Home Buyers’ Program in British Columbia. It’s a step closer to turning your dream home into a reality. Happy home hunting!