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First-Time New Home Buyers’ Bonus From BC Government

On February 21, BC Minister of Finance Kevin Falcon announced this temporary program as part of Budget 2012. While there are eligibility requirements for buyers and the homes they purchase, essentially this program provides a bonus of up to $10,000 to first-time homebuyers of newly-constructed homes.

The program will take effect following legislative changes. Although the legislation hasn’t yet been introduced, it is expected this spring. Once in place, the First-Time New Home Buyers’ Bonus will be in effect until March 31, 2013.

Key elements:

  • To be eligible, the agreement of purchase and sale must have been entered into on or after February 21, 2012 and HST must be payable on the home.
  • This is a one-time refundable personal income tax credit worth up to $10,000 for first-time new home buyers.
  • If an applicant’s income is over $150,000 there will be a reduction of the $10,000 bonus.
  • The bonus will be issued as a separate cheque from the BC Ministry of Finance; that is, the bonus will NOT be claimed through your income tax.
  • Application forms (available later this year) will need to be completed and sent to the BC Ministry of Finance for processing.
  • The bonus of a maximum $10,000 is not linked to the buyer’s taxable income unless the individual/couple’s net income from line 236 of their tax return is over $150,000 annually. At that stage the bonus gradually reduces until the annual income reaches $200,000.
  • The bonus will be issued as a cheque by the BC Ministry of Finance.
  • The purchaser will have to apply for the bonus on a form to be available in a few weeks from the provincial government. The application will be processed, and then a cheque will be issued.
  • The amount of the bonus is to be calculated as follows:
  • “The bonus is equal to 5% of the purchase price of the home (or in the case of owner-built homes, 5% of the land and construction costs subject to HST) to a maximum $10,000.” (Source: BC Ministry of Finance, The BC First-Time New Home Buyers’ Bonus fact sheet)
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  • For further information, see the BC Ministry of Finance website for their Fact Sheet and “Q&A” documents.

 

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