BC Government Reduces Tax Burden on First-Time Buyers

First-time home buyers received welcome news in the February 18, 2014 provincial budget.

Qualifying first-time buyers can now buy a home worth up to $475,000 and not pay the Property Transfer Tax (PTT) under the First-Time Home Buyers’ Exemption program for registrations with the Land Title Office, on or after February 19, 2014.

The previous threshold was $425,000. The partial exemption continues and will apply to homes valued between $475,000 and $500,000.

More Home Buyers

The government estimates:

• 1,700 additional first-time buyers will annually be eligible to save up to $7,500 in PTT when they buy their home; and

• this measure will save home buyers in total $8 million each year.

“Overall this is a great start. By raising the threshold, the government clearly recognizes the plight of first-time buyers in a market facing affordability constraints,” said Cameron Muir, Chief Economist, BC Real Estate Association.

For details about the Property Transfer Tax Exemption Program: www.sbr.gov.bc.ca/documents_library/forms/0269Guide.pdf

Changes to the Home Owner Grant Threshold

For the 2014 tax year, the Home Owner Grant threshold for phase out will be decreased to $1,100,000 from $1,295,000.

For properties valued above the threshold, the grant is reduced by $5 for every $1,000 of assessed value above the threshold.

The threshold captures 93.8% of home owners as opposed to 95% previously. This program change will save the BC government $11 million in the coming fiscal year.

The BC Home Owner Grant, in place since 1957, provides qualifying home owners with $570 applied to reduce education property taxes. There is an additional grant of $275 for home owners who are 65+ years, disabled, or veterans.

To read the budget, visit www.bcbudget.gov.bc.ca/2014/default.htm