Tax Credits :: First Time New Home Buyers' Bonus in BC

By
Real Estate Sales Representative with Abbotsford, Chilliwack, Langley, & Fraser Valley 153237

Frequently Asked Questions

 

GENERAL


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 couple, 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 21, 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 the BC HST New Housing Rebate?
For information about the GST/HST New Housing Rebate

What are the New Housing Transition Rules
For information about the New Housing Transition Rules, including raising the BC HST rebate threshold to $850,000 and the provincial grant, please follow this link: http://pstinbc.ca/


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.

What is a substantially renovated home?

A substantially renovated home is one where all, or substantially all, of the interior of a building has been removed or replaced. Generally, 90% or more of the interior of the house that existed before the renovations began must be renovated to qualify as a substantially renovated home (90% test).

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).

What is the Purchase Price?

The purchase price is the consideration you paid for the home. Consideration does not include HST or property transfer taxes.

Is the bonus taxable?

No. The bonus is a refundable personal income tax credit, meaning it will not be added to your income on your tax return.

CLAIMING THE BONUS

How can I claim the bonus?

Individuals must apply for the bonus through the BC government. Eligible individuals will be able to apply as soon as the application forms are posted on the BC Ministry of Finance website later this year. You will be required to submit documentation demonstrating your eligibility.

What if Canada Revenue Agency (CRA) reassesses my income tax return after I apply for the bonus?

You must notify us of any changes to your income tax return (e.g. changes to your net income as reported on line 236 of your return) that could impact your eligibility for the bonus.

Where do I get the form to apply for the bonus?

The application form will be posted on the BC Ministry of Finance website later this year. Please check back later in the year for more information.

What documentation will I need to provide to claim the bonus?

The documentation the BC government will request as part of your application for the bonus is still being finalized. It is advised that you retain all legal documents relating to the purchase of your home, including the written agreement of purchase and sale, copies of federal form GST190 GST/HST New Housing Rebate Application for Houses Purchased from a Builder or form GST191 GST/HST New Housing Rebate Application for Owner-Built Houses and documentation showing when you took ownership and possession of your home. Please check back later in the year for more information. For owner-built homes, you must keep receipts for all construction costs.


ADDITIONAL INFORMATION

 

Click here to view New Homes in Abbotsford
Click here to view New Condos in Abbotsford
Click here to view New Townhouses in Abbotsford

Who do I contact if I have additional questions?

Telephone:

250 387-3332 or 1-877-387-3332

Fax:

250 356-9243

Mail:

BC First-Time Home Buyers' Bonus
PO BOX 9444 STN PROV GOVT
Victoria BC V8W 9W8

Courier:

BC First-Time Home Buyers' Bonus
1st Floor, 1802 Douglas Street
Victoria BC V8T 4K6

Email:

ITBTaxQuestions@gov.bc.ca

 

Comments (1)

Jo-Anne Smith
Oakville, ON

Hi Katie,

Sounds like a wonderful opportunity for first time buyers. You've done an excellent job providing all of this information.

Jo

Jun 05, 2012 01:43 PM