Government reduces tax burden on first-time buyers
First-time home buyers received some welcome news in today’s provincial budget.
The Liberal Government announced, effective February 19th, 2014, qualifying first-time buyers can buy a home worth up to $475,000 under the Property Transfer Tax (PTT) First-Time Home Buyers’ Exemption program. This is a significant increase where the previous threshold was $425,000.
In addition, homes priced $475,000 to $500,000 qualify for the continuiing partial exemption falling more in-line with B.C.'s housing prices, most notably in Metro Vancouver.
With this change, the government estimates 1,700 additional first-time buyers will annually be eligible to save up to $7,500 in PTT when buying their home.
These new exemptions are estimated to cost $8 million in lost tax revenue each year.
Together with BC Real Estate Association, the BC Real Estate Board has actively lobbied to make home ownership more affordable for first-time homebuyers. The increased limits in the threshold indicate these lobbying efforts on behalf of the public have paid off. Note that in 2008, as a result of industry lobbying, the provincial government increased the threshold to $425,000 from $375,000. And, in 2005, the government increased the threshold to $325,000 from $275,000.
The PTT is calculated at a rate of one per cent on the first $200,000 and two per cent on the remaining value of the purchase price.
Find out how the new exemption limits affect you by contacting me today at firstname.lastname@example.org.
For more on the Budget, http://www.bcbudget.gov.bc.ca/2014/default.htm
Based on reporting from the real estate board of greater vancouver.