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   Buyer!

If you are a first time buyer you may be exempt from paying the Property Purchase Tax, the qualifications are as follows:

1) You must be a B.C. resident living in B.C. for one year.

2) You must be moving into the property.

3) It must be your principle residence.

4) It must be the first principal residence you and your spouse have owned in B.C. or anywhere else in the world.

5) You must have a mortgage with a term of one year or greater on the property, and the mortgage must be for an amount not less than 70% of the purchase price of the home.

Tip: If two people are purchasing a property and one has already owned a home before but the other qualifies for the first time home buyer exception, than the property transfer tax is paid on only half the purchase price and is exempt on the other half.

What Costs are involved with the Purchase of a Home?

Listed are the common costs for a typical residential real estate purchase.

1) A Deposit is required when the offer to purchase is drawn up; typically range from $1,000.00 - $10,000.00 and perhaps more for deals with a long completion date.

2) The remainder of your Down Payment (minimum 5% of the purchase amount) is due the day before your completion date.

3) Building Inspection (optional) $250 - $300

4) Site Survey (if an existing survey can not be found) or Title Insurance $250 - $300

5) Lawyer or Notary fees & expenses $650 - $850 these costs will include investigating title, drafting documents, registration of sale and mortgage.

6) Appraisal (if greater than 50% financed) $200 - $250

7) CMHC fees (if greater than 75% financed) 3.75% of the borrowed amount, plus application fee of $75. The CMHC premium will be added to your mortgage amount.

8) Fire Insurance (required if the home is financed) $250 - $1000

9) Property Purchase Tax (first time buyer's may be exempt) 1% of the purchase price up to $200,000 and 2% for everything over.

10) GST (only on new construction, substantially renovated homes, land created for resale or held by a dealer of land) 7% less the rebate of 36% of the GST paid for owner occupied properties.

How to use your RRSP to Buy a Home

If you're eager to purchase your first home, perhaps the Home Buyer's Plan might be an answer.

The plan was developed to help Canadians accumulate the down payment for a home by Letting them withdraw up to $20,000 from their Registered Retirement Savings Plans to build or buy a "qualifying Home". No income tax is deducted from these funds, as long as they're repaid to an RRSP over a maximum of 15 years.

Tip: If you have a spouse who is also eligible, you can each withdraw up to $20,000 towards the down payment for a total of $40,000. Funds used from the RRSP must have been contributed in for a minimum of 90 days.

Tip: What if you don't have an RRSP? No problem, banks will gladly let you purchase an RRSP and give you an RRSP loan to cover it. After 90 days you can use those moneys to buy your home. This Plan is available to any first time buyer, or people who are divorced, forced to move for employment reasons, forced to sell in a low market and moving to a higher market, and those who have not owned a principal residence in the past 5 years.

The Home Owner's Grant

This program is available to all owners' for their principal residence, meaning you need to reside in the home you are claiming the grant for. The Basic grant is $470; seniors, the disabled, and war veteran's can receive an additional $275 and or relief from school taxes in certain circumstances.

Tip: For those new to the province, you still qualify for the grant; just follow the directions on your tax notice. Ensure you fill out the bottom portion of the notice, or else you will not receive this benefit.