If you're planning to become a home owner in British Columbia for your first time, you should be glad to hear about the 2024 updates to the First Time Home Buyers' Program and the newly built home exemption.

Key Points:

• Threshold increased to $835,000 for eligible first-time buyers.
• First $500,000 of the purchase price is fully exempt from property transfer tax.
• Estimated 14,500 people, twice as many as before, now eligible for support to buy their first home.
• Newly-built home exemption for homes with a fair market value of up to $1.1 million

2024 First Time Homebuyers' Program Enhancements

As part of Budget 2024, the First Time Homebuyers' Program has seen a substantial increase in the threshold to align with today's market realities.

Effective April 1st, 2024, qualifying first-time buyers can now benefit when purchasing a home worth up to $835,000.

The first $500,000 of the purchase price is entirely exempt from the property transfer tax. This translates to potential savings of up to $8,000, offering a significant financial boost for those taking their first steps into homeownership.

Do I Qualify for an Exemption?

• To be eligible for a full exemption, you must meet the following criteria at the time of property registration:
• Canadian citizen or permanent resident.
• Resided in B.C. for at least a year immediately before the registration date.
• Filed at least 2 income tax returns as a B.C. resident in the last 6 taxation years before registration.
• Never owned a registered interest in a property that was your principal residence anywhere in the world.
• Never received a first time home buyers' exemption or refund.

The property must

• Be used solely as your principal residence.
• Have a fair market value of $835,000 or less (effective April 1, 2024).
• Be 0.5 hectares (1.24 acres) or smaller.
• Contain only residential improvements.

If these conditions are met, you may be exempt from property transfer tax on the first $500,000 of the purchase price.

Do I Qualify for a Partial Exemption?

You may qualify for a partial exemption if the property:

• Has a fair market value between $835,000 and $860,000 (effective April 1, 2024).
• Is larger than 0.5 hectares or has additional buildings.

Note: Foreign entities and taxable trustees are not eligible for the exemption.

Newly Built Home Exemption

Buyers of newly built homes also stand to benefit from lower costs.

For homes with a fair market value of up to $1.1 million, the newly-built-home exemption comes into play. 

Also effective April 1, 2024, the newly built home exemption presents an opportunity for new home buyers to reduce or eliminate property transfer tax on qualifying purchases of a principal residence.

Here's a concise breakdown...

Full Exemption Threshold Increase

The fair market value threshold for a full exemption for newly built homes is raised from $750,000 to $1,100,000, starting April 1, 2024.

Partial Exemption

A partial exemption is available for properties just above the threshold, with a phase-out range of $50,000 above the threshold. The exemption is completely eliminated at $1,150,000 for qualifying purchasers.

Partial Exemption Eligibility

• If the property has a fair market value greater than $1,100,000 but less than $1,150,000.
• Is larger than 0.5 hectares.
• Has another building on the property other than the principal residence.

Definition of a Newly Built Home

Includes a house constructed and affixed on vacant land, new apartments in newly built condominiums, manufactured homes on vacant land, and more. Qualifying for the exemption depends on meeting specific criteria outlined.

Qualification Criteria

To qualify, the property transfer must be registered after February 16, 2016, and you must be an individual, a Canadian citizen or permanent resident. The property must be located in B.C., used as your principal residence, have a fair market value of $1,100,000 or less, and be 0.5 hectares (1.24 acres) or smaller.

Refunds and Eligibility

Individuals not initially qualifying due to citizenship status but becoming a citizen within 12 months may apply for a refund.

Eligibility to claim a refund for additional property transfer tax paid is also assessed.

Foreign entities and taxable trustees are not eligible for this exemption. The increased threshold aims to benefit qualifying purchasers, particularly in urban areas, providing financial relief for those investing in newly constructed homes.

If you're planning to buy new in the Okanagan Valley, check out the latest new developments in Kelowna.

Property Transfer Tax Exemption for Purpose-Built Rentals

To encourage the construction of more rental units, eligible purpose-built rental buildings with four or more units will receive a property transfer tax exemption until 2030. This not only contributes to the availability of affordable rental housing but also aligns with the government's goal of creating a balanced housing market.

Savings and Impact

These adjustments in property transfer tax exemption thresholds and incentives for building new rentals and homes are projected to save more people money, with an estimated annual savings of $100 million.

By addressing the challenges faced by middle-income British Columbians in accessing suitable housing, the government initiatives aim to create a more equitable housing landscape.

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