The BC Government announced a new First-Time New Home Buyers’ Bonus Tax Credit yesterday.
This gives a little extra incentive to first time buyers’ to purchase new homes with a $10,000 tax credit. Before you get excited and go out to purchase a new home you should see the facts:
- This is a $10,000 income tax credit. You will not receive cash.
- The tax credit is equal to 5% of the home price, subject to a maximum of $10,000
- The tax credit is pro-rated based on your income and phases out for higher income families (> $200,000 annual income).
- 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 $10,000 tax credit is applied against your income. Meaning that you do not get $10,000, but rather a tax credit equal to the tax rate on $10,000 of income in your personal tax bracket. For example, if you are in a 30% tax bracket, you get the equivalent of a $3,000 tax rebate.
- This credit only applies to first time homebuyers.
- You, or for couples, you and your spouse or common law partner, have never previously owned a primary residence.
- You file a 2011 B.C. resident personal income tax return, or if you move to B.C. after December 31, 2011, you file a 2012 B.C. resident personal income tax return (you will not be eligible for the bonus if you move to B.C. after December 31, 2012);