No. However, the federal Home Buyers’ Program allows home buyers to requalify after four years.
Wise real estate decisions are made when you have a clear understanding of your personal financial circumstances. When assessing your situation, it is important to know there is a broad range of cost-saving programs available to help you.
*Updated: August 2016
|Home Buyers’ Plan: Registered Retirement Savings for down payments|
|Canada Revenue Agency’s Home Buyers’ Plan lets qualifying home buyers use up to $25,000 of their Registered Retirement Savings Plan (RRSP) to buy a home. Couples can use up to $50,000. The home must be the principal residence, the home buyers must not have owned a home within the past five years and the loan must be repaid within 15 years.
Home buyers who have already used the plan and have fully repaid their RRSP may be eligible to use the plan a second time.
Disabled home buyers upgrading to a more accessible home also qualify as do relatives helping disabled home buyers.
|Canada Revenue Agency
Home Buyers’ Plan
|First-Time Home Buyers’ Tax Credit|
|Eligible individuals who bought a qualifying home in 2015 can claim the home buyers’ amount of $5,000 on line 369 of Schedule 1 when filing their 2015 income tax and benefit returns. For 2015, the maximum home buyers’ tax credit is $750, which is calculated by muliplying the home buyers’ amount of $5,000 by the federal non-refundable tax credit rate of 15% (equal to the lowest personal income tax rate for the year.)
|Canada Revenue Agency
|GST Rebate on new homes|
|New home buyers can apply for a rebate of the 5% GST if the purchase price is $350,000 or less. The rebate is equal to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000. There is no rebate for homes priced at $450,000 and above.||Canada Revenue Agency
GST- New housing rebate
|BC Property Transfer Tax (PTT)|
|Home buyers in BC pay a provincial Property Transfer Tax (PPT) when they buy a home. The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder, up to a maximuim of $475,000.
First-time home buyers may be exempt from paying the PTT. There is a proportional exemption for homes priced between $475,000 and $500,000. At $500,000 and above the rebate is nil.
Qualified buyers of new homes may be exempt from paying the PTT on a newly built home or newly subdivided unit priced up to $750,000, saving buyers up to $13,000; and a partial exepmption on newly built homes priced $750,000 to $800,000. Learn more
|BC Ministry of Finance
Property Transfer Tax
|BC property tax deferment programs|
Qualifying low income home owners aged 55+ may be eligible to defer property taxes.Financial hardship
Qualifying home owners may be eligible to defer property taxes.Families with children
Qualifying home owners who financially support children under age 18 may be eligible to defer property taxes.
|BC Ministry of Finance
Property tax deferment programs
and enter ‘Property tax deferment’ in the search box or contact your municipal tax office.
|BC Home Owner Grant|
|Reduces property taxes for home owners with an assessed value of up to $1,200,000. The basic grant gives home owners:
• a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver, and Fraser Valley regional districts
Home Owner Grant
Or contact your local municipal tax office.
|Home Adaptations for Independence (HAFI)|
|A program jointly funded by federal and provincial governments provides up to $20,000 to help eligible low-income seniors and disabled home owners and landlords finance modifications to their homes to make them accessible and safer.||For information:
|BC Seniors’ Home Renovation Tax Credit|
|Assists eligible seniors 65+ with the cost of certain permanent home renovations to a principal residence to improve accessibility or help a senior be more mobile at home. The maximum amount of the refundable credit is $1,000 per tax year and is calculated as 10% of the qualifying renovation expense (maximum $10,000).||For information:
Canada Revenue Agency
|Rain barrel subsidy programs|
|Many Metro Vancouver municipalities offer rain barrels for sale, often at a discount for their residents:
Burnaby – $70
Coquitlam – $72
Richmond – $30
West Vancouver – $55Other municipalities may have similar offers.
|Local government water conservation incentives|
|Your municipality may provide grants and incentives to residents to help save water.
Clothes washers: replace your old clothes washer with a new, high efficiency ENERGY STAR clothes washer and receive a $100 or $200 rebate from Richmond.
Visit your municipality’s website and enter ‘toilet rebate’ to see if there is a program.
|Local government water meter programs|
|Your municipality may provide a program for voluntary water metering so that you pay only for the amount of water you use. Burnaby (scroll down), Delta, Richmond and West Vancouver have programs and other municipalities may soon follow.||For information:
Visit your municipality’s website and enter ‘water meter’ to see if there is a program.
|Water saving kits|
|Many Metro Vancouver municipalities offer water saving kits and other tools for reducing home water consumption including Burnaby, Coquitlam, and Delta.||For information:
|Leaders in Energy Management Program|
|Partners BC Hydro with BC’s largest commercial, government and institutional customers (who spend $200,000 or more/year on hydro). Customers gain access to energy management programs, tools and incentives.||For information:
|Business Energy Saving Incentives|
|Provides financial incentives to organizations that replace inefficient technologies with energy efficient technologies.||For information:
|FortisBC new home energy rebate offer|
|FortisBC and BC Hydro customers can receive rebates when building ENERGY STAR new homes or installing high-efficiency natural gas fireplaces.||For information:
|FortisBC rebate program for homes|
|Rebates for home owners include:
• $300 rebate for buying an EnerChoice fireplace
• up to $1,800 off an ENERGY STAR water heater
• $1,000 rebate for switching to natural gas (from oil or propane) and installing an ENERGY STAR heating systemTotal value of available rebates: $5,300 per household.
|FortisBC rebate program for businesses|
|For commercial buildings, provides:
• up to $45,000 for the purchase of an energy efficient boiler
• up to $15,000 for the purchase of a high-efficiency water heater
• funding towards a new construction energy study
|Energy Conservaton and Assistance Program|
|BC Hydro and FortisBC offer free energy assessments and energy saving products to income-qualifying households. Qualified contractors will install upgrades ranging in value from $300 to $5,000 depending on the need of the home.||For information:
|Energy savings kits|
|BC Hydro and FortisBC offer low-income customers a free energy saving kit containing products to help save energy and money.||For information:
|Home Energy Rebate Offer|
|BC Hydro and FortisBC offer home owners rebates for upgrades and improvements, including insulation, draftproofing, space and water heating systems and ventilation to reduce the average customer’s energy bill by 30%.||For information:
|Smart Thermostat Pilot Program|
|The City of Vancouver and Vancity are offering a $125 rebate for a home owner purchasing 1 of 3 smart thermostats that automatically controls the climate in your home. This pilot program runs to December 2016.||For information:
City of Vancouver
|Financial institutions – energy-related savings|
|RBC’s Energy Saver Mortgage
Home owners who have a home energy audit within 90 days of receiving a RBC Energy Saver Mortgage may qualify for a rebate of $300 to their RBC account.RBC’s Energy Saver Loan
Offers a 1% interest rate discount or a $100 rebate on a home energy audit with a qualifying purchase through a fixed rate loan over $5,000.BMO Eco Smart Mortgage
Offers home buyers a special rate on qualifying green properties.Vancity Home Energy Loan
Offers home owners up to $50,000 at prime + 1% for up to 15 years for energy efficient renovations.
CMHC Mortgage Loan Insurance Premium Refund
|For information visit your financial institution or
RBC- mortgage 1-800-769-2511
It’s easy to count your available cash, but remember that all of these cash savings cannot be used as your down-payment. There are last-minute costs, such as taxes, legal fees, appraisal fees, moving expenses, and home insurance to pay before you are finally in your new home. The time to budget for those “end” expenses is now. You must be prepared to pay most, and perhaps all, of the following closing costs.
Property Transfer Tax (PTT) – The British Columbia Provincial Government imposes a property transfer tax, which must be paid before any home can be legally transferred to a new owner. Some buyers may be exempt from this tax.
Home buyers in BC pay a provincial Property Transfer Tax (PTT) when they buy a home.
The PTT is charged on the fair market value of a property at a rate of:
Qualifying first-time home buyers may be exempt from paying the PTT if the purchase price of their home is priced up to $475,000. There is a proportional exemption for homes priced between $475,000 and $500,000. At $500,000 and above the rebate is nil.
Qualifying buyers of new homes may be exempt if the purchase price of their home is priced up to $750,000. There is a proportional exemption for homes priced between $750,000 and $800,000. At $800,000 and above there’s no rebate.
Goods & Services Tax (GST) – If you purchase a newly constructed home, you may be subject to GST on the purchase price. There may be some rebates available depending on the value of the home.
The GST on a new home is 5% of the price. A GST rebate equivalent to 36% of the GST paid is available for new homes priced up to $350,000 and a partial rebate on new homes priced up to $450,000.
Buyers also pay the GST on fees for services from appraisers, home inspectors, lawyers, Notary Publics and REALTORS®.
Provincial Sales Tax (PST) – The PST is generally not payable on services except for legal and notary fees. Both the GST and PST are paid on legal and notary fees.
Property Tax – If the current owners have already paid the full year’s property taxes to the municipality, you will have to reimburse them for your share of the year’s taxes. See also Why do I have to pay property taxes on the house I’m buying.
Appraisal Fee – When the lending institution requires an appraisal of the home before approving your loan, it may be your responsibility to pay the appraiser’s fee. The fee ranges from $300 to $450 plus GST.
Survey Fee – The lending institution may also require that a survey certificate be presented to them. The purpose of the survey is to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries.
Note: Lending institutions may ask for either a building location survey, which establishes where a building is located on a property, or a monumental survey, which establishes the actual boundaries of a property. If the current owner cannot provide a recent survey certificate, it will be your responsibility to pay the surveyor’s fee.
Mortgage Application Fee – Lending institutions may charge a mortgage application fee. This application fee may vary between lending institutions.
Don’t forget about last minute costs
Mortgage Default Insurance – This type of insurance is required on most mortgage loans in excess of 75% of the appraised home value. Its purpose is to ensure that the lender will not lose any money if you cannot make your mortgage payments and the value of your home is not sufficient to repay your mortgage debt. The insurance premium is paid to the lender and, in most cases, is added to the loan amount and paid for over the term of the loan.
As of February 15, 2016, the federal government requires a 10 per cent down payment requirement on homes valued at $500,000 – $1 million, that need mortgage insurance. Homes valued at $1 million+ require a minimum down payment of 20 per cent. Mortgage insurance is not available for homes in this price range. Learn more
Rent and security deposits – If there is a secondary suite or a laneway home rental and the tenancy continues, the buyer receives the security deposit from the seller with accrued interest because the buyer is responsible for reimbursement when the tenant leaves.
Land survey fees – Lenders may requie a survey of the property. The fee ranges and is typically $500 plus GST.
Life & Disability Mortgage Insurance – At your option, you may purchase insurance which will ensure that your outstanding mortgage balance is paid if you die or become disabled.
Fire & Liability Insurance – The mortgage lender will insist that you purchase an insurance policy which guarantees that, in the event of fire, the lender will receive the balance owing on the mortgage loan before you receive any insurance proceeds.
Legal Fees – The transfer of home ownership from the seller to the buyer must be recorded in the Land Title and Survey Authority Office in order to protect the new owner’s interests.
You will probably want to engage a lawyer or notary public to act on your behalf during the completion of your purchase. The lawyer or notary public will charge a fee for this service, plus disbursements, including the Land Title Registration fee. If you are financing your purchase with a new mortgage loan, there will be a further fee and disbursements to prepare and register the mortgage documents.
Likely fees include:
For more information about land titles, visit the Land Title and Survey Authority of BC at www.ltsa.ca.
Other last-minute costs you shouldn’t forget to set some money aside for:
Based on Your Income:
A general guideline is to allow no more than 30% of your gross monthly income (before deductions) to make your monthly housing payments. This test of your ability to repay a mortgage loan is generally referred to as the Gross Debt Service Ratio.
Complete the following calculation to determine the approximate amount you may be able to afford for the mortgage payment, the property taxes and, where applicable, 50% of the strata maintenance fees. Some lenders will require that this total maximum monthly payment also covers heating costs.
Based on your Other Financial Obligations:
If you have other monthly financial obligations, such as car or credit card payments, the lending institution will also apply the Total Debt Service Ratio test to determine the maximum mortgage loan for which you can qualify.
$ ____ Your monthly housing payment
$ ____ Your calculated monthly debt payments (car, credit card, etc.)
$ ____ Total monthly payment
A general guideline should be that the total of your monthly housing payment added to your other monthly debt payments should not exceed 40% of your monthly gross income.
The Gross Debt Service Ratio and the Total Debt Service Ratio tests protect both you and the lender by ensuring that you do not take on more debt that you can reasonably afford to repay.
Many lending institutions will prequalify you for a specific size and type of mortgage loan before you begin searching for your new home. Taking the time to apply for a pre-approved mortgage will give you the security of knowing how much you can afford to spend.
Before concluding the loan agreement, most lending institutions will require an appraisal of your selected home. The appraised value is a professional opinion of the value of the home and may differ from the purchase price you are willing to pay. The appraised value may affect the approved value of the loan.
Most mortgage loan contracts only permit the regular payments to continue for a specified term which is shorter than the amortization period. The term can be as short as six months or it can be five years or more.
At the end of the term, you are required to repay the full unpaid balance. If you don’t have the cash required to pay the balance, it may be necessary to refinance the loan.
Deciding on the length of term you want will depend partly on whether you think interest rates will go up or down. Keep in mind that the longer the term you choose, the longer your monthly payment remains stable.
CAUTION: The lender is not obligated to renew your mortgage loan at the end of the term.
Typically, the size of a mortgage loan payment is calculated as if the loan payments were going to be paid over 20 or 25 years. This is called the amortization period. Each payment will repay the interest due up to the payment date along with some of the principal owed. The longer the amortization period you choose, the lower the regular payment will be. Keep in mind that the faster you repay any money borrowed by choosing a shorter amortization period, the more you reduce the total cost of borrowing.
There are two basic types of mortgage loans:
Obtaining a loan to finance the purchase of your new home will probably require you to sign a document called a mortgage. This document will set out the terms and conditions for the loan and its repayment. If you fail to meet your debt obligations, the lender may have the right to claim your home to pay off what you still owe.
Almost everyone who purchases a home borrows some of the money needed to pay for it. The easiest way to determine how much money you will be able to borrow as a mortgage loan is to consult with one or more lending institutions. These lenders will apply standard tests, based on your family’s current income and debts, in order to decide the amount of money they will lend to you. They will ask for information about your finances and make a thorough credit check, in order to be sure you are able to repay a loan.
Lending institutions will usually require you to make a down-payment of at least 5% to 10% of the purchase price of the home. Lending institution policies may vary from time to time. However, as a general rule, you should make your cash down-payment as large as possible. Your deposit for the real estate transaction may form part of your down-payment.