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Vancouver Townhouse: What First-Time Buyers Need to Know
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Whether it’s a townhouse in Vancouver or another entry-level home, first-time buyers can improve affordability with these valuable assistance programs and grants.
Are you a first-time home buyer shopping in Vancouver? It can be a steep and bumpy ride. As homebuyers, we’re up against two forces beyond our control—inefficient housing supply and sky-high prices.
As realtors at Vancouver Townhouse, we specialize in buying and selling townhouses in Vancouver. Our clients look to us for niche knowledge for a smooth and successful journey. However, as townhouses remain a relatively affordable housing product, many of our clients are first-time homebuyers who can benefit from a little care and support. Specifically, many of our clients are interested in grants and assistance programs that can make housing more accessible and affordable.
Grants and assistance programs exist at both the provincial and federal levels in Canada. These programs can help boost purchasing power or reduce costs after becoming a homeowner. If buying a home is on your to-do list, these are the ones to check out.
Home Buyers’ Plan
The Home Buyers’ Plan allows first-time buyers to take up to $60,000 out of an eligible registered retirement savings plan, or RRSP and put it toward the down payment of a primary residence. Qualifications include:
- Being a first-time buyer.
- Being a resident of Canada from when you withdraw the funds until your home is bought or built.
- Intending to use the home as your principal residence within a year of buying or building it.
First Home Savings Account
The FHSA (First Home Savings Account) is a wonderful investment tool for investors trying to boost their down payment. Buyers can contribute up to $8,000 per year to an FHSA, up to a maximum of $40,000. The contributions are tax-deductible and can be used to increase savings through investment products like GICs, stocks, and bonds. Best of all, the investments generated are tax-free.
First-Time Home Buyers’ Tax Credit
Even once a home is purchased, there are still expenses; the First Time Buyers’ Tax Credit is a non-refundable credit of $10,000 for first-time home buyers. It results in a tax rebate of up to $1,500, and while this won’t contribute towards mortgage approval or down payment, it will make your first year of home ownership just a bit easier.
GST/HST New Housing Rebate
Everyone knows buying or building a new residence means GST—but New Housing Rebate can help recoup some of the Goods and Services Tax (GST), or the federal portion of the Harmonized Sales Tax (HST), paid. The rules can change, so remember to work with someone who can tell you if the property is eligible for debate.
B.C. Residents
Along with Federal programs, each province offers its own initiatives, and B.C. is no exception. There are several programs new buyers in B.C. should be aware of.
B.C. First-Time Home Buyers’ Program
To reduce closing costs, the B.C. First-Time Home Buyers’ Program works to reduce or eliminate the land transfer tax, a property tax all buyers must pay. Since April this year, first-time buyers can receive a tax exemption on a home worth up to $835,000. Buyers pay no tax on the first $500,000, saving up to $8,000. Criteria include:
- Being a permanent resident of Canada or a Canadian citizen.
- Having lived in B.C. for at least the last 12 months or filed at least two income tax returns in the province in the previous six taxation years.
- Never previously owning a property that could be considered your principal residence — anywhere in the world, ever.
- No previous receipt of the B.C. first-time home buyers’ tax break.
B.C. Home Owner Grant
Another tax-focused program, the B.C. Home Owner Grant offers eligible homeowners, first-time and seasoned, an annual reduction of up to $770 in property taxes. Homes valued above $2,239,000 are ineligible. Criteria include:
- Living in B.C.
- Being a Canadian citizen or permanent resident.
- Being either the registered owner of the home or the spouse or relative of its deceased owner.
- Using the property as a principal residence.
Newly Built Homes Exemption
Finally, new builds and preconstruction can open more assistance programs. The Newly Built Home Exemption can ease the property tax on preconstruction properties worth up to $1.1 million—making this well worth exploring for anyone considering one of the many new developments townhouse in Vancouver.
Find Your New Home with Vancouver Townhouse
Buying a home in Vancouver, Townhouse or otherwise, can be a challenge, but there are federal and provincial programs to help ease the burden on first-time homebuyers. Other tips that may be helpful include:
- Creating a budget to keep savings on track.
- Eliminate unnecessary spending.
- Finding an experienced realtor.
- Watching the market for changes.
- Signing up for our Townhouse Watch.
With patience, diligence, and guidance, finding a home in even the most competitive markets is possible. At Vancouver Townhouse, we work to keep you up to date on Vancouver townhouse listings and sales in any neighbourhood or development. Call 604.779.1500 or info@vancouvertownhouse.ca for a commitment-free conversation about townhomes for sale in Vancouver.