First-time home buyers received long awaited and welcome news yesterday when the provincial government released the new budget. Effective for properties registered on or after February 19th, under the First-Time Home Buyers Program, you can now purchase a home worth up to $475,000 without incurring PPT (Property Transfer Tax). They have also continued the partial exemption which now applies to homes valued between $475,000 to $500,000.
What could this mean for you? Up to $7500 that you can put back in your pocket. Or maybe instead of buying a condo, you can now qualify to purchase a townhouse, or instead of an attached property... you can qualify for a detached home.
The Real Estate Board of Greater Vancouver along with the BC Real Estate Association has been actively lobbying to make home ownership more affordable for years. The province introduced the PTT 26 years ago. It was structured to add 1% on the first $200,000 of the purchase price, and 2% on the balance. At that time, only 5% of Metro Vancouver houses sold for $200,000 or more.
In 2005, the government increased the threshold from $275,000 to $325,000. In 2008, as a result of real estate industry lobbying, the government increased the threshold from $325,000 to $425,000. With the new threshold of $475,000, the government estimates that it will cost $8M in lost tax revenue each year.
When you compare BC's transfer tax to the 'land transfer fee' of Alberta... it's almost laughable. On a $475,000 property, it's a whopping $130 bucks. So while we're not quite there yet (and will likely never be) it is certainly another small step in the right direction!
Check if you qualify for the First-Time Home Buyers Program.