Q & A on the BC First Time Home Buyers Bonus

You may recall the first post I made regarding the BC First Time Home Buyers Bonus back in February, but there have been a LOT of questions surrounding it in the office lately, so I thought I would do some overall Q & A for you today.
This is really an exceptional bonus the government is throwing our way, and it is worth taking a second (or third or fourth) look at!
So here is a list of A’s to your Q’s:
1. What is the BC First-Time New Home Buyers’ Bonus?
The BC First-Time New Home Buyers’ Bonus is a one-time payment worth up to $10,000 for BC residents who are first-time home buyers and who purchase an eligible new home.
2. Who is a first-time home buyer?
A first-time home buyer is an individual who has never previously owned a primary residence anywhere in the world. In the case of multiple buyers of a home, each buyer must be a first-time home buyer having never owned a primary residence anywhere in the world.
3. Am I able to requalify as a first-time home buyer?
You cannot requalify as a first-time new home buyer. This rule may be different from other federal or provincial programs for first-time home buyers (e.g. Home Buyers’ Plan administered by the Canada Revenue Agency).
4. What is a primary residence?
A primary residence is generally a house that you own, jointly or otherwise, that you intend to live in on a permanent basis. You may have more than one place of residence, but you are considered to have only one primary residence.
5. Do I qualify for the bonus?
You may qualify for the bonus if:
•you purchase or build an eligible new home located in BC,
•you, or for couples, you and your spouse or common-law partner, have never previously owned a primary residence,
•In the case of multiple buyers of a home, each buyer must be a first-time home buyer having never owned a primary residence anywhere in the world,
•you file a 2011 BC resident personal income tax return, or if you move to BC after December 31, 2011, you file a 2012 BC resident personal income tax return (you will not be eligible for the bonus if you move to BC after December 31, 2012),
•you are eligible for the BC HST New Housing Rebate, and
•you intend to live in the home as your primary residence.
6. What is the BC HST New Housing Rebate?
For information about the GST/HST New Housing Rebate, please follow this link:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/cnstrctn/by-eng.html
7. What are the New Housing Transition Rules?
For information about the New Housing Transition rules, including raising the BC HST rebate threshold to $850,000 and the provincial grant, please follow this link: http://pstinbc.ca/
8. What is the Grant for New Secondary or Recreational Residences?
For information about the Grant for New Secondary or Recreational Residences please follow this link: http://www.sbr.gov.bc.ca/individuals/Customer_Service/
BonusesAndGrants/grant_new_sec_rec_residences.htm
9. What is an eligible new home?
An eligible new home includes new homes (i.e. newly constructed and substantially renovated homes) that are purchased from a builder and that are owner-built.
The bonus will be available in respect of new homes purchased from a builder where:
•a written agreement of purchase and sale is entered into on or after February 21, 2012,
•HST is payable on the home, and
•no one else has claimed a bonus in respect of the home.
The bonus will be available in respect of owner-built homes where:
•a written agreement of purchase and sale of land is entered into on or after February 21, 2012,
•construction of the home is complete, or the home is occupied, before April 1, 2013, and
•no one else has claimed a bonus in respect of the home.
10. What is a substantially renovated home?
A substantially renovated home is one where all, or substantially all, of the interior of a building has been removed or replaced. Generally, 90% or more of the interior of the house that existed before the renovations began must be renovated to qualify as a substantially renovated home (90% test).
11. The builder sent in my BC HST New Housing Rebate. Am I still entitled to the bonus?
Yes, if the builder paid the total amount of the BC New Housing Rebate directly to you or credited the amount against the total amount payable for the house, you are eligible for the bonus if you meet all the other eligibility requirements.
12. Is the bonus assignable to the builder?
No, the bonus cannot be assigned to the builder. The individual must apply directly to the Ministry of Finance for their bonus.
13. The eligibility criteria states that a written agreement of purchase and sale is entered into on or after February 21, 2012. If I made an offer on February 20, 2012 to the seller and the seller did not sign the agreement until February 21, 2012 am I entitled to the bonus?
If the purchaser and the seller sign the written agreement of purchase and sale on different dates, the agreement will be considered entered into on the date of the last signature of a party (i.e. the purchaser or the seller) to the written agreement. In your case, the last signature was the sellers, the agreement will be considered to have been entered into on February 21, 2012 and you will be eligible for the bonus if you meet all the other eligibility requirements.
If the purchaser and seller collapse a contract of purchase and sale of a home entered into prior to February 21, 2012, and enter into a new contract of purchase and sale of that home to access the BC First-Time New Home Buyers’ Bonus, the Bonus will be denied. For purposes of the bonus program the new contract of purchase and sale will be considered to be part of the original written agreement that was entered into prior to February 21, 2012.
14. I owned a house in Ontario and will purchase my first house in BC. Am I eligible for the BC First-Time New Home Buyers’ Bonus?
If you previously owned a home in Ontario that was your primary residence you are not eligible for the BC First-Time New Home Buyers’ Bonus. A first-time home buyer is an individual who has never owned a primary residence anywhere in the world.
15. My wife and I would like to purchase a home together. I owned a primary residence before we were married. Do we qualify for the bonus because we have never owned a primary residence together? My wife will be the only person on title.
Neither you nor your spouse will qualify for the BC First-Time New Home Buyers’ Bonus. For a couple to be considered a first-time buyer neither you nor your spouse or common law partner can have previously owned a primary residence even if the individual that owned a home previously is not on title.
16. I am looking at purchasing a new home. I will have 2/3 ownership and my parents will have 1/3 ownership. I am a first time buyer, but they are not. Am I eligible for a reduced amount of the bonus based on my proportion of ownership?
Based on the information provided you will not qualify for the BC First-Time New Home Buyers’ Bonus. In the case of multiple buyers of a home, each buyer must be a first-time buyer, having never owned a primary residence anywhere in the world. The bonus will not be pro-rated based on percentage of ownership.
17. How is the bonus calculated?
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 of $10,000.
The bonus will be reduced based on an individual’s/couple’s net income (line 236 of your income tax return) using the following formula:
•for single individuals, the bonus is reduced by 20 cents for every dollar in net income over $150,000 (bonus is reduced to zero at $200,000 net income), or
•for couples, the bonus is reduced by 10 cents for every dollar in family net income over $150,000 (bonus is reduced to zero at $250,000 family net income).
18. What is the purchase price?
The purchase price is the consideration you paid for the home. Consideration does not include HST or property transfer taxes.
19. Is the bonus taxable?
No. The bonus is a refundable personal income tax credit, meaning it will not be added to your income on your tax return.
If you have ANY questions at all regarding this Bonus, please don’t hesitate to get in touch with me!