BC First Time Home Buyer $10,000 Tax Credit

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UPDATE: This credit is no longer available effective April 1 2013

The government is in the process of introducing a new incentive for first time home buyers. This is a major benefit that’s only available on new properties (or properties where HST is charged) .

THE B.C. FIRST-TIME NEW HOME BUYERS’ BONUS

Effective February 21, 2012, to March 31, 2013, the bonus is a one-time refundable personal income tax credit worth up to $10,000

What is the BC First-Time New Home Buyers’ Bonus?
The BC First-Time New Home Buyers’ Bonus is a one-time refundable income tax credit worth up to $10,000 for BC residents who are first-time home buyers and who purchase an eligible new home.

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 couples, neither you nor your spouse or common law partner can have previously owned a primary residence.

 

Do I qualify for the bonus?
You 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,
  • 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.

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 and building 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.

 

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.

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).

 

How can I claim the bonus?

Individuals must apply for the bonus through the Ministry of Finance. Information on the application process and the application form is under development and will be posted online later this year. You will be required to submit documentation demonstrating your eligibility.


Iain

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