The government of British Columbia provides several enticing incentives for individuals entering the real estate market as first-time home buyers.

Optimize these incentives to facilitate your initial home purchase.

Embarking on the journey of purchasing your first home can often feel intricate and overwhelming. Despite this, numerous incentives are accessible to alleviate some of the stress associated with being a first-time home buyer.

In regions like British Columbia, you'll find a variety of these incentives at your disposal. Given its diverse landscapes encompassing breathtaking waterfalls, majestic mountains, and lush forests, coupled with its proximity to the Pacific Ocean, British Columbia stands out as an appealing location for first-time home buyers in Canada. It has even earned the reputation of being one of the premier places to reside in your 30s. These distinctive features, combined with the available first-time home buyer incentives, could further solidify your decision to purchase a home in this region.

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. To be eligible, the home must be located in British Columbia and have a purchase price of less than $750,000. The amount of assistance you receive for your down payment depends on the amount of the down payment you’re able to put down as well as the home you’re purchasing. 

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 eligible, you must be a Canadian citizen or permanent resident and have lived in British Columbia for at least 12 consecutive months before the date of registration for the property. Alternatively, you can also qualify by filing at least two tax returns as a BC resident in the past six year. The refund is based on the amount of the property transfer tax and is equal to the amount of the tax paid, up to a maximum of $8,000. This exemption only applies to properties with fair market value of $525,000 or less

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.

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.