Opinion: The government programs helping first-time buyers in B.C. to own a home

Written for Daily Hive by Geoff Duyker, Senior Vice-President, Mosaic Homes

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Most first-time buyers in B.C. know about a couple of government programs, but fewer know you can stack up to five together. 

Between the federal and provincial governments, there are real programs built for first-time buyers, and when you stack them together, they add up to a meaningful boost on your path to purchasing. And when done correctly, these programs can save you tens of thousands of dollars. 

This is the first of a three-part series for first-time buyers in B.C. that outlines the programs that move the math, the numbers worth knowing before your first mortgage conversation, and, if you’re a parent reading along, the smartest ways to help your adult children enter the market. 

The five programs worth knowing about:

The First-Time Home Buyers’ GST/HST Rebate

The First-Time Home Buyers’ GST/HST Rebate eliminates GST for first-time buyers on a new home valued up to $1 million, with partial relief on homes valued between $1 million and $1.5 million.

For a qualifying first-time buyer purchasing a new home under $1 million, that’s up to $50,000 staying in your pocket.

Newly built home property transfer tax exemption

Property transfer tax is one of the biggest closing costs in BC, and first-time buyers of newly built homes are fully exempt from purchases up to $1,100,000, with partial relief up to $1,150,000.

On a home priced in the high $800s, that exemption alone is worth roughly $16,000, money that stays in your pocket at closing.

The 30-year amortization extension

This one’s newer and quietly significant. Thirty-year amortizations have long been available to buyers putting 20 per cent or more down. What changed is that first-time buyers with insured mortgages, meaning less than 20 per cent down, can now access that same extended timeline on newly built homes.

That extra five years lowers your monthly payment meaningfully, often by a few hundred dollars a month, which is the kind of breathing room that changes which homes you can comfortably consider.

Tax-Free First Home Savings Account (FHSA)

The FHSA program is one that most first-time buyers should be using, but many aren’t. You can contribute up to $8,000 a year, up to a $40,000 lifetime maximum.

Your contributions are tax-deductible like an RRSP, and the growth comes out tax-free when you use it for a home, like a TFSA. It’s the rare program that works on both ends.

The Home Buyers’ Plan (HBP)

If you’ve been contributing to an RRSP, you can withdraw up to $60,000 from it toward your first home, tax-free, and pay it back over 15 years. For couples, that’s up to $120,000 between you. Many buyers use the  FHSA and HBP together, which is where the down payment starts to look very different from what you’d expect.

Each of these is useful on its own. The real story is what happens when you put them together.

Where government programs really add up

Let’s walk through a real example using a newly built home at Trailside in North Vancouver’s Lynn Valley and an 825 sq. ft. home starting from $879,900.

A qualifying first-time buyer who is stacking multiple government programs can achieve $59,593 in direct savings at purchase, before counting the monthly savings and the tax-advantaged room you’ve been building toward the down payment.

Here’s a breakdown of the math on a home valued at $879,900:

• The GST rebate removes the federal GST on a new home under $1 million. In this case, that’s savings of $43,995.
• The BC Property Transfer Tax exemption for newly built homes covers the full PTT on purchases up to $1.1 million. For this home, that’s another $15,598 in savings.
• The 30-year amortization on a new build lowers the monthly payment by $356 a month compared to a 25-year, which brings over $4,000 per year in savings in annual mortgage payments. 
• The FHSA and HBP combined give a single buyer up to $100,000 in tax-advantaged contribution room toward the down payment and $200,000 for a couple.

That’s a real shift in what’s within reach.

Don’t be afraid to run the numbers

The programs above aren’t a secret. But putting them together, figuring out which apply to you, in what order, and on which kind of home is where the math starts to make a tangible impact. And in our experience, very few buyers realize how much closer to home ownership they actually are until they sit down and see it on paper.

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