If you are purchasing a home in BC it is important to understand property transfer tax, and more specifically if you qualify for an exemption. Here is a breakdown of the qualifications.
First Time Home Buyer Qualifications:
You qualify as a first time home buyer if:
§ you are a Canadian citizen, or a permanent resident as determined by Immigration Canada,
§ you have lived in British Columbia for 12 consecutive months immediately before the date you register the property, or you have filed 2 income tax returns as a British Columbia resident during the 6 years before the date you register the property
§ you have never owned an interest in a principal residence anywhere in the world at any time, (clients could have owned a rental property, but proof would be required to show that they have never lived in the home at any time throughout the ownership)
§ you have never received a first time home buyers’ exemption or refund.
Please note: You cannot re-qualify as a first time home buyer. This rule may be different for other federal programs for first time home buyers (e.g. the Canada Revenue Agency Home Buyers’ Plan).
The property you purchase qualifies if:
§ the fair market value of the property is not more than the qualifying value of $475,000 (only if purchasing an existing home), There is a partial rebate between $475,000-500,000. Anything over the client has to pay the tax
§ the land is 0.5 hectares (1.24 acres) or smaller, and property must be principal residence
*New built home exemption- You can also qualify for the exemption with a purchase of a newly built home with a fair market value of $750,000 or Less, partial exemption between $750-800K. *You still get this exemption even if you haven’t lived in BC for 12 months.
It is very important to know that If a client hasn’t lived in BC before and they are looking to purchase a home EVEN if they are a first time buyer they will not qualify for the exemption if they have not lived in BC for 12 consecutive months. I have had a client that fell into this category and we were able to ensure his completion date was pushed back to help him qualify (saving him over7400 dollars!!)
As always, ask questions and work with someone you trust!