First-time Home Buyer Bonus

With the B.C. Provincial Budget coming out last week there was some good news for first time B.C. home buyers!

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.

Here are some segments of a great article we found online with the Vancouver Sun.

“Gawain Guemas-Bonell is glad he waited until Wednesday to purchase his new Langley townhome.
The 23-year-old apprentice electrician and paramedic with B.C. Ambulance Service had settled on his two-bedroom home at a project called Outlook, but only learned earlier in the day about a new bonus for first-time buyers announced in Tuesday’s provincial budget.
“This is a huge plus for me,” added Guemas-Bonell, referring to a temporary BC First-Time New Home Buyers’ Bonus that will be in effect until March 31, 2013 and is worth up to $10,000.
“For a lot of people in my category, the hardest part is getting a down payment,” said Guemas-Bonell, who will likely put the extra money onto his mortgage when he gets the tax refund.

 

“But Guemas-Bonell, by buying in Langley, is also part of a buyers’ group that industry analysts say stands to get the best bang for its buck with the new tax credit.
Outlying municipalities like Langley, Surrey or Pitt Meadows, where homes are cheaper and buyers can have less money, will fare better, according to a marketing firm that sells condos and townhomes largely to first-time buyers.
“[The bonus] is specifically targeted at first-time buyers and it would make a bigger difference for [Fraser] Valley buyers because it’s a bigger percentage of the purchase price,” said Cristy Edmonds, vice-president of Fifth Avenue Real Estate Marketing Ltd.
Michael Ferreira of Urban Analytics Inc., which conducts research for residential developers, agreed that the new bonus — a one-time refundable personal tax credit equal to five per cent of the purchase price of the home to a maximum of $10,000 — will provide a “bigger bang for your buck in the Valley” as a percentage of savings.
“I think it’s the outlying suburbs that will benefit the most from this.”

 

“While the bonus is not expected to set the real estate world on fire, it’s being seen as an extra incentive for new home buyers to get off the fence and buy their first home.
Edmonds, whose firm is marketing homes in Surrey, Langley, Port Coquitlam and Vancouver, said about 60 per cent of their sales are now to first-time buyers and that their townhomes in Langley and Surrey are in the $300,000-to-$350,000 range with condos in the $150,000-to-$250,000 range.
“I think this will get a lot of people coming out and looking again who had put off their decision,” she added. “With interest rates lower, it’s another added incentive.

 

“Scott Brown, senior vice-president, Colliers International, said he anticipates many developers will move their construction dates up to take advantage of the new tax bonus.