Being a first-time home buyer is an exciting milestone, but navigating the financial side can feel overwhelming. Fortunately, both the Province of British Columbia and the Government of Canada offer several strong incentives to make homeownership more achievable. Below is a clear, organized breakdown of the programs available.
BC Property Transfer Tax (PTT) – First-Time Home Buyers’ Program
The First-Time Home Buyers’ Program is one of the most valuable incentives in the province, helping reduce or eliminate the Property Transfer Tax, often a major closing cost.
Key Eligibility Requirements
- You must be a Canadian citizen or permanent resident.
- You must meet BC residency requirements (12 consecutive months of residency, or 2 BC income tax returns filed in the last 6 years).
- You must not have owned a principal residence anywhere before.
- The home must be your principal residence.
PTT Exemption Amounts (Effective April 1, 2024)
- Full exemption for homes with a fair market value up to $835,000.
- Partial exemption from $835,000–$860,000.
This exemption can save first-time buyers tens of thousands of dollars. If it wasn’t applied at the time of purchase, the province allows you to apply for a refund up to 18 months later, which is an important safety net.
Newly Built Home PTT Exemption
If you’re shopping for new construction, pre-sale units, or recently completed homes, this program may offer even higher savings.
Exemption Thresholds (Effective April 1, 2024)
- Full exemption on newly built homes priced up to $1.1 million.
- Partial exemption for homes $1.1 million–$1.15 million.
This program is open to all buyers of newly built homes (not just first-timers), but it’s especially helpful for new buyers entering higher-priced markets.
First Home Savings Account (FHSA)
The FHSA is one of the most powerful tools available today for first-time buyers, and it’s officially backed by the Government of Canada.
How It Works
- Contribute up to $8,000 per year (lifetime max: $40,000).
- Contributions are tax-deductible (like an RRSP).
- Withdrawals for a qualifying home purchase are tax-free, including investment growth (like a TFSA).
FHSA Eligibility Highlights
- You must be a first-time home buyer under CRA’s definition.
- You need a written agreement to buy or build a home before October 1 of the year after your withdrawal.
- You must intend to live in the home within one year.
- Once you make your first qualifying withdrawal, you must close the FHSA by December 31 of the following year.
This “deduct in, tax-free out” model makes the FHSA one of the best ways to build a down payment efficiently.
Home Buyers’ Plan (HBP) – RRSP Withdrawal Program
The HBP allows you to use your RRSP savings to support your purchase without paying tax on the withdrawal at the time.
Key Features
- Withdraw up to $60,000 (per eligible buyer).
- Must have a written agreement to buy or build a qualifying home.
- You must intend to occupy the home within one year.
- Repay the withdrawal over 15 years in equal annual installments.
Buyers can combine the HBP with the FHSA to maximize their available down payment funds.
Proposed Federal GST Exemption for First-Time Home Buyers (What It Means for Vancouver Island Buyers)
The federal government has introduced proposed legislation that would significantly reduce the cost of purchasing a newly built home for first-time buyers. While this program is not yet in effect, it is expected to become one of the most meaningful incentives for new buyers, especially in markets like Vancouver Island, where demand for new townhomes, condos, and small single-family homes continues to grow.
Under the proposal, eligible first-time buyers would be able to receive a rebate of up to 100% of the federal GST (or the federal portion of HST) paid on a new home, based on the home’s price:
- Full GST rebate on new homes priced up to $1,000,000.
- Partial, scaled rebate for homes between $1,000,000 and $1,500,000.
- No rebate for homes $1,500,000 or higher.
This applies to newly built homes purchased from a builder, pre-construction units, or substantially renovated homes. It does not apply to resale (previously occupied) homes.
Key Timing Requirements
To qualify under the proposed rules:
- The purchase contract must be entered into on or after May 27, 2025.
- Construction must start before 2031.
- Ownership must transfer before 2036 (for owner-built homes).
Existing contracts signed before May 27, 2025 would not be eligible.
Who Can Qualify as a First-Time Buyer?
You must:
- Be at least 18 and a Canadian citizen or permanent resident.
- Meet CRA’s “first-time buyer” definition: you (and your spouse/common-law partner) must not have owned and lived in a home in the current year or the previous four years.
Why This Matters for Vancouver Island Buyers
Vancouver Island’s real estate market features a large mix of new townhouses, new condo developments, and smaller detached homes, many of which fall below the $1,000,000 threshold.
This means many first-time buyers on the Island could qualify for a full GST rebate, which represents savings of up to $50,000 depending on the purchase price.
For Island markets where new homes are priced between $1M and $1.5M (e.g., parts of Nanaimo, Langford, North Saanich), buyers may still receive a partial rebate, improving overall affordability.
Because this GST exemption is still proposed and not yet law, the details may change as federal legislation progresses. I stay on top of these updates so you don’t have to.
How These Programs Work Together
Many first-time buyers can benefit from stacking these incentives. A common and effective strategy is:
- Save through an FHSA for tax-free withdrawals,
- Top up RRSP contributions and use the HBP for additional funds,
- Apply the PTT First-Time Buyer Exemption to reduce closing costs,
- Consider a Newly Built Home Exemption if purchasing new construction.
- Utilizing B.C.’s First-Time Home Buyers’ Property Transfer Tax (PTT) Exemption, and B.C.’s Newly Built Home PTT Exemption (up to $1.1M for a full exemption), together, these programs could reduce both closing costs and taxes, helping first-time buyers move into homeownership with far less cash required upfront.
When used correctly, these programs can significantly reduce upfront costs, lower taxes, and improve your overall buying power.
Stay Informed
As your real estate agent, my goal is to ensure you feel informed and supported through every step of your buying journey. These programs offer meaningful financial advantages, but each comes with specific rules surrounding eligibility, timing, and occupancy. I’ll help you understand how they apply to your situation, and I can connect you with trusted mortgage brokers, lawyers, and tax professionals to make sure you receive every benefit you’re entitled to.
If you’re thinking about buying your first home on Vancouver Island, reach out anytime. I’m here to guide you confidently into homeownership.
