Good news, the legislation to enact the BC First-Time New Home Buyers’ Bonus received Royal Assent on May 31, 2012.

Here is an overview of the program and a few answers to some commonly asked questions regarding the program.

The BC First-Time New Home Buyers’ Bonus is a one-time payment worth up to $10,000 for BC residents who are first-time home buyers and who purchase an eligible new home.

Who is considered a first-time homebuyer? – A first-time home buyer is an individual who has never previously owned a primary residence anywhere in the world. In the case of multiple buyers of a home, each buyer must be a first-time home buyer having never owned a primary residence anywhere in the world.

What is an eligible home? – An eligible new home includes new homes (i.e. newly constructed and substantially renovated homes) that are purchased from a builder and that are owner-built.

The bonus will be available in respect of new homes purchased from a builder where:

  • a written agreement of purchase and sale is entered into on or after February 21, 2012,
  • HST is payable on the home, and
  • no one else has claimed a bonus in respect of the home.

The bonus will be available in respect of owner-built homes where:

  • a written agreement of purchase and sale of land is entered into on or after February 21, 2012,
  • construction of the home is complete, or the home is occupied, before April 1, 2013, and
  • no one else has claimed a bonus in respect of the home. 

My wife and I would like to purchase a home together. I owned a primary residence before we were married. Do we qualify for the bonus because we have never owned a primary residence together?  My wife will be the only person on title. – Neither you nor your spouse will qualify for the BC First-Time New Home Buyers’ Bonus. For a couple to be considered a first-time buyer neither you nor your spouse or common law partner can have previously owned a primary residence even if the individual that owned a home previously is not on title.

I am looking at purchasing a new home.  I will have 2/3 ownership and my parents will have 1/3 ownership. I am a first time buyer, but they are not. Am I eligible for a reduced amount of the bonus based on my proportion of ownership? – You will not qualify for the BC First-Time New Home Buyers’ Bonus. In the case of multiple buyers of a home, each buyer must be a first-time buyer, having never owned a primary residence anywhere in the world. The bonus will not be pro-rated based on percentage of ownership.

Is it true that the bonus will reduce my taxes payable and I will only receive a portion of the bonus depending on my income tax bracket? – The bonus is not claimed on your income tax return. The bonus will not reduce the amount of taxes payable on filing your personal income tax return. The bonus will be issued by the BC Ministry of Finance. You may be entitled to receive up to $10,000 but the amount of the refund is reduced if your family net income exceeds $150,000.

Is it true that if I receive a $10,000 bonus cheque, I have to use the money to pay down my mortgage? – No. An individual who receives the bonus is not required to use it to pay down their mortgage.

All the forms can now be found here along when the answers to other common questions regarding the BC First-Time New Home Buyers’ Bonus program:

http://www.sbr.gov.bc.ca/individuals/income_taxes/personal_income_tax/tax_credits/fthb_bonus_forms.htm

 

April Dunn is a Mortgage Broker who has been assisting clients to purchase, refinance or renew their mortgages for over 15 years. April is the Managing Broker of Mortgage Alliance Homeline Mortgage, an independent franchise of the Mortgage Alliance network. April provides a full range of residential and commercial mortgage financing for clients all over the province of British Columbia. April can be reached at 250-826-3543 or april@homelinecanada.com

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