It is a very exciting time when you start looking for a house for your family. It may be exciting but it is not as easy as it sounds. There is a lot of stuff that you need to be very careful about. I am specifically going to discuss the first time home buyer exemption for the first time homebuyer. If you are buying a house for the first time in British Columbia you might be eligible for the first time home buyer exemption.
Under the First Time Homebuyer Exemption program, people who meet certain requirements, and are first time homebuyers, are eligible for the exemption in property transfer tax, which is a provincially payable tax, whenever property changes hands.
Other requirements necessary to claim this exemption:
• Person claiming the exemption must be a Canadian citizen, or permanent resident as defined by the Canadian Immigration and Refugee Protection Act;
• Must have lived in BC for 12 consecutive months immediately before the date the property is registered, or have filled 2 income tax returns as a British Columbia resident during the 6 years before the property registration date;
• Never owned an interest in a principal residence anywhere in the world at any time (a principal residence is the usual place where an individual lives);
• Never received a first time homebuyer’s exemption or refund.
Property requirements for the exemption are:
• The fair market value of the property (land plus improvements) should not be more than $475,000 to claim a full exemption.
• The land should not be more than 0.5 hectares (1.24acres).
• The property should only be used as your permanent residence
If there is more than one purchaser and only one of them is claiming the first time homebuyer’s exemption, then only the percentage interest acquired by the first time home buyer is eligible (if the market value of the property is under $475,000). The exemption is calculated on full market value of the property not on an individual’s share. You cannot claim the exemption on the property if the market value is over $500,000, but between $475,000 and $500,000 a partial exemption is given.
In some circumstances an exemption can be taken away, so in order to keep the exemption you should meet the following requirements:
• If it is an existing home, you must move into the home within 92 days of the date you register the title of the property.
• If it is vacant land, you must build and move in within 1 year of the date you register the title of the property.
• You must use the property as your permanent residence for the first year
Please give our office a call for further information @ 604-503-3853