Thursday, March 15, 2012

$10,000 First Time Bonus, Explained

In a prior release, we reviewed what was believed to be the process for the new BC First Time Homebuyer Bonus. The Bonus was initially referred to as a refundable tax credit, which indicated a process similar to the Federal first time buyer $5,000 tax credit which has been in effect since 2009. If fact, the BC first time buyer new home bonus will be administered quite differently. The different processes are noted below.

Federal Grant :

• First, this is a $5,000 income tax credit claimed when filing your annual personal tax return
• The $5,000 is applied as a tax credit at the basic personal federal tax rate of 15%
• Accordingly the effective value of the grant is $750
• The $750 value is applied regardless of the income of the buyer
• This grant is available to first time buyers, but the home need not be a brand new home

More details can be found HERE
BC Grant :
• The BC Grant is a Bonus for first time buyers in BC
• The Bonus is 5% of the purchase price, subject to a maximum of $10,000
• The home must be a new home to which HST is applied
• The Bonus is scaled back based on income of the purchasers
• The purchaser can apply immediately after completion of the purchase via an application form that will soon be available on the BC Government web sites

More information on the BC Bonus is available HERE

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