Are you a first time buyer who is considering the purchase of a new home?  If you are, but (like many others) have been hesitant to “buy new” because of the extra costs associated with the Harmonized Sales Tax (HST), there may now be a solution to your problem. 

As we all know, voters in BC turfed this hated tax after a referendum held in the summer of 2011.  While everyone waits for the tax to disappear, sales of certain items (like new homes) have stalled.  In an effort to ease the pinch on the homebuilding industry, the BC government intends (subject to approval by the legislature) to implement a BC First-Time New Home Buyers’ Bonus.  This temporary program is meant to improve sales of new homes until the HST is repealed. 

Are You Eligible for the BC First Time New Home Buyers’ Bonus?

You are if you meet these criteria:

You must buy or build an eligible new home in BC;You, or 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 Dec. 31, 2011, you file a 2012 BC resident personal income tax returnYou are eligible for the BC HST New Housing Rebate, andYou intend to make the home your primary residence.

What Type of Homes are Eligible?

An eligible home includes new or substantially renovated homes purchased from a builder or owner-built.  You may apply for the bonus when you buy from a builder and:

A written agreement of purchase and sale is entered into on or after Feb. 21, 2012;HST is payable on the home, andNo one else has claimed a bonus in respect to the home.

If you are building your own home, it is eligible for the bonus when:

A written agreement of purchase and sale in respect of the land and building is entered into on or after Feb. 21, 2012;Construction of the home is complete, or the home is occupied, before April 1, 2013; andNo one else has claimed a bonus in respect of the home.

Certain renovated homes are considered eligible for the bonus.  If you are applying for the bonus with the purchase of a substantially renovated home, it must be one where all or most of the interior of a building has been removed or replaced, generally, 90 per cent or more.

Eligible homes can include; detached houses, semi-detached houses, townhouses, duplexes, mobile homes, residential condominium units, floating homes, and residential units in a cooperative housing corporation.

How much is First Time New Home Buyers’ Bonus?

The bonus is equal to 5% of the purchase price or, for owner-built homes, 5% of the land and construction costs subject to HST to a maximum of $10,000.

Higher income earners will see a phase out of the bonus based on net family income.  It kicks in at $150,000 and the bonus is erased at $200,000 ($250,000 for couples).

How to Apply for the First Time New Home Buyers’ Bonus

You can apply for the bonus through the BC government.  Application forms will soon be available on the BC Ministry of Finance website.

The opportunity to collect a bonus of up to $10,000 dollars is only available when construction of your home is complete, or the home is occupied, before April 1, 2013.  If you have been considering the purchase of a new home and can meet these qualifications, it might be the right time for you to buy.  Home builders across the province are certainly hoping so!  You can read more about it on the 2012 First Time Home Buyers’ Fact Sheet. 

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