First Time Buyers

The British Columbia government offers a number of incentives for first-time home buyers

Make the most of first-time home buyers incentives to help you with your first-home purchase!

Your options for B.C. first-time home buyer incentives

The British Columbia government offers a number of incentives for first-time home buyers, including the BC Home Owner Mortgage and Equity (HOME) Partnership program, the First-Time Home Buyers' Program (FTHB) as well as a “cooling-off period,” which is unique to B.C. as it’s the only province in Canada with this kind of program.

BC Home Owner Mortgage and Equity (HOME) Partnership program

The HOME Partnership program is a government-backed program that provides first-time home buyers with up to 5% of the purchase price to be used as a down payment.

Who's eligible?

Are buying your first home.
Choose a home with a purchase price of less than $750,000.
Are a Canadian citizen or permanent resident for at least five years.
Have resided in British Columbia for at least one year immediately preceding the date of application.
Are a qualified first-time buyer, and the property will be your principal residence.

Quick Facts:

Provides up to 5% of the purchase price for your down payment.
No interest or principal payments for the first five years.
You start repaying the loan from the sixth year.

BC First-Time Home Buyers' (FTHB) program

The First-Time Home Buyers' program provides a refund of the property transfer tax for eligible first-time home buyers.

To be considered for the FTHB program you must:

Be a first-time home buyer.
Be a Canadian citizen or permanent resident.
Have lived in British Columbia for at least 12 consecutive months immediately before the date the property is registered.
Or, you have filed 2 income tax returns as a British Columbia resident within the last 6 years.

Quick Facts:

Offers a one-time exemption from the property transfer tax.
Can save you up to $8,000.
Applies to homes valued at $525,000 or less.
You must move into your new home within 92 days of the property's registration date and reside there for at least one year.
Entities from abroad and trustees subject to taxes cannot receive the exemption. If you are an individual ineligible due to not having Canadian citizenship or permanent residency status, yet you attain such status within a year from the registration date, you could be entitled to seek reimbursement of the property transfer tax.

Federal First-Time Home Buyer Incentive

The First-Time Home Buyer Incentive (FTHBI) is a Canadian government program designed to assist first-time homebuyers by offering a shared equity mortgage, wherein the government shares in the property's value appreciation or depreciation. Specifically, the FTHBI provides 5% or 10% of the home's purchase price as a down payment incentive, with 10% for newly built homes and 5% for existing homes. Unlike a traditional mortgage, there are no regular principal payments, and it doesn't incur interest. You can repay the incentive at any time without a pre-payment penalty or after 25 years or when the property is sold, based on 5% or 10% of the property's current value.
To be eligible, applicants must be first-time homebuyers or not have lived in a home they owned in the last four years. The combined income must be $120,000 or less, and applicants must meet the minimum down payment requirements. The total borrowing, including the mortgage and incentive, cannot exceed four times the annual qualifying income. The application process involves contacting a participating lender, such as a bank or credit union that offers the FTHBI.
The program encompasses various property types, including single-family homes, semi-detached, townhouses, and condo units. One critical aspect of the program to consider is that the government's share in the property means that if the home's value increases, the amount owed upon repayment will be more, and if it decreases, the amount owed will be less.

First-Time Home Buyers Tax Credit

As a first-time home buyer, you have the opportunity to benefit from a non-refundable tax credit of up to $750 when you buy a qualifying residence. The Home Buyers' Tax Credit (HBTC) calculation involves taking $5,000 and applying the lowest personal income tax rate for the year - which stood at 15% back in 2022. If you meet the criteria as a first-time home buyer, you're eligible for a non-refundable tax credit totaling $10,000. In practical terms, this policy puts up to $1,500 back into your budget in the form of a tax reduction for the year you secure your new home.

Eligibility for the First-Time Home Buyers' Tax Credit

New Homeowners: The credit is designed specifically for those purchasing their first home. You qualify if neither you nor your spouse or common-law partner has owned and lived in another home in the year you make the purchase or during the four years prior.
Individuals with Disabilities: If you have previously owned a home, you might still be eligible for this tax credit if you have a disability and are eligible for the Disability Tax Credit. There are specific requirements to keep in mind:

The new home must accommodate the individual's disability needs.
You should take residence in the purchased home within one year of buying it.
You need to claim the disability amount on your income tax return for the same year you acquire the property.

Home Buyers' Plan (HBP)

The Home Buyers' Plan is a program that allows first-time homebuyers in Canada to withdraw up to $35,000 from their Registered Retirement Savings Plans (RRSPs) without incurring tax penalties to purchase or build a qualifying home. If buying with a spouse or common-law partner, each person can withdraw up to $35,000 for a combined total of up to $70,000. This withdrawal must be repaid to the RRSP over a period of 15 years, with payments starting the second year after the initial withdrawal. If the annual repayment is not made, the amount is added to the individual's income for that year and is subject to tax.
The HBP is an attractive option for many first-time homebuyers, as it allows them to utilize their retirement savings to reduce mortgage costs and increase the down payment, potentially avoiding higher-cost mortgage insurance. Eligibility for the HBP requires that the homebuyer is a first-time buyer or has not owned a home in the last four years, and the funds must be used to buy or build a qualifying home for the applicant or a related person with a disability.

Cooling-off period

The cooling-off period in British Columbia is a three-day period where you can cancel a contract for the purchase of a home. This period begins on the day the contract is signed and allows you to review the contract and make sure you are comfortable with the terms before finalizing the deal. This rule applies to all contracts for the purchase of a home in the province, no matter if the home is new or a resale, and where it’s located within the province.
During this period, you have the right to cancel the contract, by providing written notice of your intention to cancel to the seller or the seller's agent. However you’ll have to pay a fee for rescinding of 0.25%. That means if you were to buy a $1-million home, but backed out during the cooling-off period, you’d have to pay the seller 0.25%, which in this case is $2,500.
The cooling-off period is a useful tool for first-time home buyers in British Columbia, as it provides an opportunity to reconsider the purchase and make sure it is the right decision before finalizing the deal. You can take this time to really consider any doubts or concerns you might have about the purchase of the home. It’s important to understand that this period is not a right to renegotiate the terms of the contract: it’s simply a small window where you can cancel the contract without penalty.

BC Home Owner Grant

Home owners in British Columbia are also eligible for reduced property taxes each year. The grant is up to a maximum of $770, while properties located in the Metro Vancouver, Fraser Valley and Capital regional districts are eligible for $570. This is to help alleviate homeowners in rural and northern areas. The home owners grant covers 92% oif residential properties in BC with the maximum home value set at $2.125 million for 2023. If you are past the age of 65, the grant can reach up to $845.