Real Estate Outside The Box

Blog › January 2017

Government reduces tax burden on first-time buyers

First-time home buyers received welcome news in today’s provincial budget. Any REALTORS® currently working with first-time buyers will want to share this news with them as soon as possible.

The government has announced, effective February 19, 2014, under the Property Transfer Tax (PTT) First-Time Home Buyers’ Exemption program, qualifying first-time buyers can buy a home worth up to $475,000. The previous threshold was $425,000.

The partial exemption continues and will apply to homes valued between $475,000 and $500,000.

With this change, the government estimates 1,700 additional first-time buyers will annually be eligible to save up to $7,500 in PTT when they buy their home.

The government estimates this measure will cost $8 million in lost tax revenue each year.

The Real Estate Board, together with BC Real Estate Association, has actively lobbied to make home ownership more affordable for first-time home buyers. This increase in the threshold clearly signals our efforts have paid off as in past years.

In 2008, as a result of industry lobbying, the provincial government increased the threshold to $425,000 from $375,000. 

In 2005, the government increased the threshold to $325,000 from $275,000.

The PTT is calculated at a rate of one per cent on the first $200,000 and two per cent on the remaining value of the purchase price.

Here is a link to the Budget.:

Recently Sold Listing 23 - 6600 Lucas Road, Richmond, BC

R2123836 - 23 - 6600 Lucas Road, Richmond, BC, CANADAI have just recently sold this listing at 23 - 6600 Lucas Road, Richmond.

Home Owner Grant Threshold Increases

The BC government has increased the home owner grant threshold to $1.6 million from $1.2 million, a 33% increase over 2016.

The threshold is the maximum a property can be assessed at by BC Assessment to allow the property owner to claim the full Home Owner Grant.

This threshold increase helps ensure home owners who received the grant last year will also receive it in 2017. Province-wide, 91% of homes will remain below the threshold. In Metro Vancouver, 83% of homes will be below the threshold.

The grant reduces the amount of property tax an owner pays. To qualify, you must be the registered owner, occupy your home as a principal residence, be a Canadian citizen or permanent resident, and live in BC.

If a property has an assessed value of $1,600,000 or less, the Home Owner Grant may reduce property taxes up to $570 for the basic grant. If the owner is aged 65+, is disabled, or is a qualified war veteran, an additional grant of $275 is available (for a total of $845).

If the property is located in a northern and rural area, the grant is $770. It may be increased to $1,045 if the owner is a senior, disabled, or a veteran.

Low income home owners who would have received the additional home owner grant except for the high value of their home can apply for a low-income grant supplement or a veterans supplement.

What are the exact home price thresholds?

The basic grant threshold is reduced by $5 for each $1,000 of assessed value over $1,600,000. The grant isn’t available for properties assessed over $1,714,000 ($1,754,000 in a northern and rural area).

The additional grant threshold is also reduced by $5 for each $1,000 of assessed value over $1,600,000. But the grant is phased out for properties valued at $1,769,000 or over.

Partitioned value

If you have a laneway home or multi-family dwelling - for example, a duplex, triplex and fourplex - they may qualify as separate residences. A suite in a principal residence doesn’t qualify.

Partitioning the property value may enable a home owner to claim the home owner grant if the:

  • home owner previously couldn’t, or could only claim a reduced grant, because of the high assessed value of your property, and
  • property consists of your principal residence and at least one separate residence

A property owner may apply to have the assessed value of their property partitioned using the Home Owner Grant Partitioning of Assessed Value Calculation (FIN 91).

Make sure you claim the grant

The grant isn’t provided automatically. Home owners must apply every year when they pay their property taxes. The application is part of the property tax notice that owners will receive in June.

Tax Deferment programs Home owners who have difficulty keeping up with rising property assessments may also be eligible to defer all or a portion of their property taxes.

The BC government also provides property tax deferral programs for qualifying property owners, including seniors aged 55+, persons with disabilities, and families with children.

Deferment programs are low-interest loan programs that allow qualifying residents to defer all or part of their property taxes until they sell or transfer ownership of their home, or it becomes part of an estate. Home owners planning to participate in a tax deferment program should seek appropriate financial advice.

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