Unlocking Homeownership
Buying your first home is a major milestone. For many, it’s a mix of excitement, nerves, and about a million questions. How much do I need for a down payment? What extra costs should I budget for? Are there any programs to help me get my foot in the door (pun intended)?
If you’re dreaming of making North Vancouver or West Vancouver your home base, the journey can feel even more overwhelming with the region’s competitive housing market. But here’s the good news: there are programs and incentives designed specifically to help first-time buyers just like you. These can save you money, make homeownership more accessible, and turn that “maybe one day” into today.
In this post, I’ll walk you through the key programs available to first-time homebuyers in BC. Whether you’re looking to purchase your first condo, townhome, or even a cozy house on the North Shore, this guide will help you navigate your options and plan your next steps confidently.
Let’s jump in!
1. First Home Savings Account (FHSA)
My personal favourite program that just launched last year (2023), the FHSA blends the tax efficiencies of a Registered Retirement Savings Plan (RSP) with the flexibility of a Tax Free Savings Account (TFSA) to help first-time buyers save for a down payment.
How it works:
- You can contribute up to $8,000 per year, with a lifetime contribution limit of $40,000.
- Contributions are tax-deductible, just like an RRSP
- Withdrawals used for purchasing your first home are tax-free, just like a TFSA
Why it’s awesome:
It’s a powerful way to save for your down payment while enjoying tax benefits, flexibility, and capital appreciation. With housing prices in North Vancouver and West Vancouver, every bit of savings helps.
Pro Tip: Pair the FHSA with the RRSP Home Buyers’ Plan (up next!) for even more savings. You can use both programs together to maximize your resources.
2. Home Buyers Plan (HBP)
Got some savings in an RRSP? With the HBP, first-time homebuyers can withdraw up to $35,000 tax-free to put towards the purchase of a home. Buying with a partner? Then you can both withdraw $35,000 each for a total of $70,000.
While this withdrawal from your RSP is tax-free, think of it more as an interest free loan; you're withdrawal must be fully repaid within 15 years, with payments starting the second year after the withdrawal.
Pro tip: You don’t need to have your entire down payment saved in your RRSP—just the amount you want to withdraw. This can give your savings a real boost.
By using the HBP, you can take advantage of the tax-deferred growth in your RRSP while saving for a home. Then, you can use the money you’ve saved toward your down payment or other home-buying costs.
3. BC Property Transfer Tax (PTT) Exemption
One of the big costs that catch first-time buyers off guard is the property transfer tax - a Provincial tax that is applied to all real estate transactions. But good news: as a first-time home buyer, you could be eligible for a full or partial exemption.
- If you’re a first-time buyer, you can now get a full exemption on homes priced up to $835,000. And if your dream home is a little pricier—between $835,000 and $860,000—you could still qualify for a partial exemption.
- For those looking at newly built homes, the exemption now applies to homes valued at $1.1 million or less, with partial savings for homes up to $1.15 million. This could mean up to $20,000 in savings—a huge help, especially in areas like North Vancouver.
Pro Tip: For resale homes, the maximum exemption amount is still capped at $500,000 worth of tax - or $8,000 - meaning you are still required to pay some PTT on properties valued between $500,000 and $835,000.
4. First Time Home Buyers Incentive (FTHBI)
The FTHBI is a bit more complex, and runs the risk of taking money out of your pocket when you go to sell your property at a later date.
The federal government offers a shared equity mortgage program that can give you a little extra financial boost. They’ll pitch in 5% for existing homes or 10% for newly built ones. That means a lower mortgage and reduced monthly payments!
The catch? You’ll have to pay them back eventually, either after 25 years or when you sell the home, and it’s based on the current market value.
Is this for you? Your household income needs to be under $120,000, and your mortgage (plus the incentive) can’t be more than 4 times that.
Let’s Find Your First Home Together
Navigating these programs might seem tricky, but that’s where I come in! As a hyper-local realtor specializing in North and West Vancouver, I’m here to simplify the process, connect you with the right resources, and help you find the perfect place to call home.
Got questions? Let’s chat—whether it’s about these programs, the local market, or even your dog-friendly hiking trail wishlist (seriously, those trails are the best).
Your journey to homeownership starts here. Let’s make it happen!
