A STEP TOWARD AFFORDABILITY
“How will I ever afford to buy a home in Vancouver?!!”
We are dealing in the priciest real estate in the country, that's a familiar lament we hear from our family and friends. Taking that first leap into home ownership can be a daunting prospect in a market of near record highs. Tempered only by historically low interest rates, likely nowhere is the conversion of renter to home owner more challenging than right here on the West Coast.
But thanks to new legislation recently passed in Victoria, the horizon is looking a little brighter for first time new home buyers in B.C.
The B.C. First Time New Home Buyers' Bonus is a one-time bonus payment of up to $10,000 for 1st time buyers of new homes in the province. Here are some of the qualifications needed to convert renters into owners:
- The Buyer cannot have owned a primary residence anywhere in the world.
- The claimant must file a 2011 Income Tax return (if moved here anytime during 2012, then a 2012 BC resident personal income tax return).
- Individuals or families moving to BC after December 31st of this year will not be eligible.
- The Buyer must intend to live in the home as their primary residence.
- A written agreement of Purchase and Sale is written on or after February 21st of this year and the construction complete or the home occupied by April 1st of next year.
- The bonus is equal to 5% of the purchase price to a maximum of $10,000.
The bonus ends March 31, 2013, when harmonized sales tax is replaced by the GST.
Mortgage brokers believe it could be the motivating factor to convert renters into buyers.
From Renter to Owner
TD Canada Trust's residential mortgage manager, Aly Chatur says that $10,000 may seem like a drop in the proverbial bucket in Canada’s priciest back yard. But to the “too-timid-to-buy renter”, he presents a rather typical scenario: A condo purchase at $400,000 with ten percent or $40,000 down. That $10,000, then, actually represents 25% of the down payment, a significant boost. Combined with our historically low interest rates, mortgage payments and strata fees would come in at around $2,000/month.
BC First-Time New Home Buyers' Bonus