PETER DOLEZAL: B.C. bonus program for the first-time homebuyer

While this program can be equivalent to the entire five per cent down payment on a $200,000 condo, it is not widely understood.

Despite the federal government’s recent tightening of mortgage lending rules, which have significantly impacted first-time home buyers, there remains a major B.C. program of tremendous value to potential first-time purchasers — but only if they complete a new-home purchase before April 1, 2013, at which time this one-year program terminates.

The $10,000 First-Time New Home Buyers’ bonus is available to any B.C. resident who a) is a first-time purchaser; b) earns less than $150,000 annually; and c) purchases a newly-constructed condominium, townhome or single family dwelling valued at $200,000 or more. The new home must be occupied by the purchaser before April, 2013.

While this program can be equivalent to the entire five per cent down payment on a $200,000 condo, it is not widely understood. As a result, many potential first-time buyers have failed to take advantage of this unique opportunity.

Parents hoping to become empty nesters sooner rather than later, may want to consider lending their young adult $10,000 toward a down payment — perhaps on the understanding the loaned amount will be repaid. This may also be an opportune time for grandparents who wish to assist the younger generation in their family in becoming homeowners. If down payment assistance is possible, much greater joy is experienced by both the grandparent and the grandchild when the benefit of the gift is now, rather than from an estate.

This program presupposes of course, that the first-time home buyer meets all the usual qualification requirements. For those who do qualify, this truly is a not-to-be-missed $10,000 windfall — especially since it is tax-exempt.

Remember too, as well as benefitting from this bonus, the first-time home buyer is also eligible for other one-time incentives. To fund the purchase and furnishings, each person can borrow up to $25,000 interest-free from their RRSP, subject only to the funds being repaid to the RRSP over the subsequent 15 years.

The federal government also offers first-time home buyers a $750 tax credit in the year of purchase. Both Federal and Provincial governments also offer an HST rebate of five per cent on newly-constructed homes of up to $850,000. Also in B.C., the first-time buyer is fully exempt from the property purchase tax (one per cent on first $200,000, plus two per cent on any balance).

When a B.C. first-time buyer takes into account the availability of all these government programs designed to assist with that important first-home purchase, along with record-low interest rates and falling condominium prices, that dream of home-ownership may not be as remote as previously thought.

The $10,000 bonus program for first-time buyers of newly-built residences is the single greatest element of all these available incentives. But it disappears as of April 1, 2013. If seriously considering that first-home purchase, you have little time to waste!

 

A retired corporate executive, enjoying post-retirement as a financial consultant, Peter Dolezal is the author of three books. His most recent, The SMART CANADIAN WEALTH-BUILDER, is now available at Tanner’s Books, and in other bookstores.

 

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Consumer bankruptcies down in Greater Victoria

More residents are making alternative arrangements to settle their debts

Advocates call hospital parking fees a ‘shakedown’ after learning most Island tickets are waived

Victoria General and Royal Jubilee hospitals among the most ticketed on the Island

University of Victoria tells stories of Holocaust survivors with graphic novels

International storytelling initiative launched first meetings this winter

Province asks health-care staff to be ‘vigilant’ in screening for possible coronavirus cases

This comes after U.S. health officials confirmed a case of the virus in Washington State

Homes fit for royals for sale in North Saanich

Prince Harry and Meghan Markle have returned to Greater Victoria

VIDEO: Protesters block entrance to Victoria government building to support Wet’suwet’en First Nation

Activists want Wet’suwet’en Hereditary Chiefs demands to be upheld, observed and respected

Boy, 13, arrested after alleged assault involving girl at B.C. middle school

Boy alleged to have used ‘inappropriate levels of force’ to injure the girl

B.C. player becomes only second Canadian to enter Hall of Fame of Baseball

Walker received 76.6 percent of the Baseball Writers of America Association vote

PHOTOS: Heavy snowfall breaks window, causing avalanche into B.C. newsroom office

It was a chaotic start to the week for the Kitimat Northern Sentinel

Canadian law firm launches class action on behalf of Iran flight victims

Flight 752 was shot down by Iran shortly after take off

Mission Hill cellarman fired after mistakenly dumping $162K of wine down the drain

The former employee filed a grievance with the West Kelowna winery but was unsuccesful

Police suspect foul play in Cowichan Tribes death

Police are looking at foul play in relation to a death on… Continue reading

Hospital patient pleads guilty to dumbbell assault of nurse in Abbotsford

Neale Heath admits to assault causing bodily harm in attack last September

Most Read