First Time Home Buyer Programs

Buying your first home can feel like a big financial step, but there are several programs available in British Columbia and across Canada designed to make homeownership more achievable. These programs can help reduce upfront costs, make saving for a down payment easier, and improve affordability.

One of the most valuable programs in BC is the First-Time Home Buyers’ Property Transfer Tax Exemption. Normally, buyers must pay property transfer tax when purchasing a home, but eligible first-time buyers may receive a full exemption on homes valued up to $835,000, with a partial exemption available on homes valued up to $860,000. This can save buyers thousands of dollars in closing costs when purchasing their first home.

Another helpful tool is the First Home Savings Account (FHSA). This program allows first-time buyers to save for a down payment in a tax efficient way. You can contribute up to $8,000 per year, up to a lifetime maximum of $40,000, and the contributions are tax deductible. When the funds are used to purchase your first home, the withdrawals are tax free.

First-time buyers can also take advantage of the Home Buyers’ Plan (HBP). This program allows you to withdraw up to $60,000 from your RRSP to use toward your down payment. The funds can be withdrawn tax free as long as they are repaid back into your RRSP over time.

Another option that may help improve affordability is the extended amortization available to some first-time buyers. In certain situations, buyers purchasing their first home may qualify for a 30 year amortization with less than 20 percent down payment. Spreading the mortgage over a longer amortization can help lower monthly payments and make qualifying for a mortgage easier, although it does result in more interest paid over the life of the loan.

Depending on the property you purchase, there may also be additional savings opportunities such as GST rebates on newly built homes or the BC Newly Built Home Property Transfer Tax exemption, which can reduce taxes on qualifying new construction homes.

Many of these programs can be used together, allowing first-time buyers to significantly reduce upfront costs and improve affordability. Taking the time to understand which programs you qualify for can help you make the most of the opportunities available when purchasing your first home.