Buying your first home is a lot of things. Exciting, overwhelming, scary, stupendous and amazing are all words that could be used to describe the process. Most people manage to get through it, albeit a little mentally battered and bruised, and feeling like they might want to live in that home for the rest of their lives. As long as they never have to buy another one!
The good news, it doesn’t have to be like that, and if you’re thinking of buying in Langley, BC, then this guide should help to get you through the process without a hiccup.
Government Assistance for New Home Buyers
Like many parts of Canada, first time home buyers actually get benefits from the government when they buy their first property, in that they can be eligible for a full or partial tax exemption of property transfer tax.
This tax benefit is shared between the purchasers of the property, as long as they are eligible for the benefit. So, for instance, if you share the purchase 50/50 with your spouse, and you are both eligible, you would get 100% of the benefit. If one of you were not eligible, you would get 50% of the benefit.
The eligibility criteria are:
- You and any co purchaser must be a citizen or permanent resident of Canada.
- You must have lived in BC for 12 months consecutively immediately before the purchase, or have filed two tax returns in BC in the previous six years.
- The value of the home cannot exceed $475,000 (although there are partial benefits for more expensive homes in some cases) or be larger than 0.5 acres (again, partial benefits may apply for larger properties.)
- You can never have owned property anywhere in the world.
- You must also intend to live in the property you are purchasing (in other words, it must be a primary residence, not a holiday home or commercial property.)
- Your lawyer or realtor must file the benefits claim at the same time as the purchase is made.
If you are a first time home buyer in BC, this scheme can save you thousands on the purchase of your first home, and it’s a definite must buy. But what else should you know?
Other Information for First Time Buyers in Langley, BC
In addition to tax savings on the transfer fees, there are a number of other things you should be considering the first time you buy a home:
- Don’t forget that you may also be able to withdraw a portion of the down payment on your new home from your RRSP without incurring penalties.
- With first time homes, and in order to get the benefit out of transfer tax waivers, it’s often a good idea to purchase a fixer upper. You can get more house for your money, and you can put your own stamp on things with renovations.
- If you do opt for a fixer upper, get a home inspector with structural experience to give the home a detailed inspection. Cosmetic changes are usually relatively cheap. Structural repairs are not.
- If you’re buying in an up and coming neighborhood, focus on what it will be like in ten years’ time, not what it’s like now. Homes are long term purchases, and you want to make sure you think ahead when you buy.
- Make sure that you factor maintenance costs into your budget. When you buy rather than rent, there’s no one you can contact if something goes wrong. Good insurance and a little nest egg should cover repairs and maintenance.
Buying a new home should be exciting, fun and a satisfying experience. If you have a good team of professionals and people you trust, including real estate agents, lawyer and family and friends to offer advice and support, it can be just that. Take your time, don’t rush into anything if it doesn’t.