For a first-time home buyer, the prospect of owning a home is daunting, especially with current sky-high real estate prices. However, there are several programs and tax benefits available, which if properly used, could make home ownership more affordable.
First Home Savings Account (FHSA)
An FHSA is a tax advantaged registered plan designed to help a first-time home buyer. Tax deductible contributions of up to $8,000 per year up to a lifetime maximum of $40,000 are available for this plan. Unused FHSA contribution can be carried forward to the next year, up to a maximum of $8,000. The money can be withdrawn tax free for any qualifying home purchase.
To qualify, the applicant must be a resident of Canada aged between 18 and 71 years old and must be a first-time home buyer.
Home Buyers’ Plan (HBP)
A program initiated by the federal government aimed at helping first-time home buyers. This plan allows a first-time home buyer to withdraw up to $35,000 from a Registered Retired Savings Plan (RRSP). The borrowed funds must be repaid, interest free, starting 2 years after the withdrawal, within a time period of 15 years.
Since 2020, the program has been extended to those individuals that build or buy a qualifying home for a related person with a disability. This has to be the disabled person’s principal residence.
First -time Home Buyers’ Program
Various provinces offer specific programs to assist first-time home buyers. In BC, the First-time Home Buyer’s Program reduces or removes the amount of property tax to pay when a person buys a home for the first time.
To qualify for the program, the individual must be a Canadian citizen or permanent resident when the property is registered. The property must be used as a principal residence. He or she must have lived in BC for at least a year before the date the property is registered and have filed at least 2 income tax returns as a BC resident in the last 6 taxation years immediately before the registration date.
There are other stipulations, the notable ones being that the property must have a fair market value of $835,000 or less (effective April 1, 2024) and be 0.5 hectares or smaller.
Newly Built Home Exemption
In an effort to encourage more people to buy newly built homes, the provincial BC government has instituted an exemption that eliminates or reduces the property transfer tax on purchases of a new home qualifying as a principal residence.
There are certain conditions that the newly built home must satisfy to be considered as such, notable being that the home is constructed and affixed on a parcel of vacant land or is a new apartment in a newly built condominium building, has a fair market value of $1,100,000 or less and be 0.5 hectares or smaller.
With the housing market set to rebound in the coming year, now would be an ideal time to start planning your move if you want to get into the property market. Contact us on 604 913 1000 or visit our website http://virani.ca.
How First Time Home Buyers Can Benefit From Existing Programs And Tax Benefits
For a first-time home buyer, the prospect of owning a home is daunting, especially with current sky-high real estate prices. However, there are several programs and tax benefits available, which if properly used, could make home ownership more affordable.
First Home Savings Account (FHSA)
An FHSA is a tax advantaged registered plan designed to help a first-time home buyer. Tax deductible contributions of up to $8,000 per year up to a lifetime maximum of $40,000 are available for this plan. Unused FHSA contribution can be carried forward to the next year, up to a maximum of $8,000. The money can be withdrawn tax free for any qualifying home purchase.
To qualify, the applicant must be a resident of Canada aged between 18 and 71 years old and must be a first-time home buyer.
Home Buyers’ Plan (HBP)
A program initiated by the federal government aimed at helping first-time home buyers. This plan allows a first-time home buyer to withdraw up to $35,000 from a Registered Retired Savings Plan (RRSP). The borrowed funds must be repaid, interest free, starting 2 years after the withdrawal, within a time period of 15 years.
Since 2020, the program has been extended to those individuals that build or buy a qualifying home for a related person with a disability. This has to be the disabled person’s principal residence.
First -time Home Buyers’ Program
Various provinces offer specific programs to assist first-time home buyers. In BC, the First-time Home Buyer’s Program reduces or removes the amount of property tax to pay when a person buys a home for the first time.
To qualify for the program, the individual must be a Canadian citizen or permanent resident when the property is registered. The property must be used as a principal residence. He or she must have lived in BC for at least a year before the date the property is registered and have filed at least 2 income tax returns as a BC resident in the last 6 taxation years immediately before the registration date.
There are other stipulations, the notable ones being that the property must have a fair market value of $835,000 or less (effective April 1, 2024) and be 0.5 hectares or smaller.
Newly Built Home Exemption
In an effort to encourage more people to buy newly built homes, the provincial BC government has instituted an exemption that eliminates or reduces the property transfer tax on purchases of a new home qualifying as a principal residence.
There are certain conditions that the newly built home must satisfy to be considered as such, notable being that the home is constructed and affixed on a parcel of vacant land or is a new apartment in a newly built condominium building, has a fair market value of $1,100,000 or less and be 0.5 hectares or smaller.
With the housing market set to rebound in the coming year, now would be an ideal time to start planning your move if you want to get into the property market. Contact us on 604 913 1000 or visit our website http://virani.ca.