Break for First Time Buyers
2007/02/28 Originally published in the Vernon Morning Star.
Its no secret that prices have climbed considerably. The average price of homes has in most cases, doubled in the last few years. This has made it more difficult for starter buyers to enter the marketplace.
In B.C. we have the dreaded Property Transfer Tax. Each buyer must pay 1% on the first $100,000. and 2% on the balance of the purchase price. But first time buyers in this area were forgiven paying that tax on a home purchase up to $325,000. The new budget raises that limit. The new limit of $375,000 will let the vast majority of first time buyers buy without the payment of this painful tax. This privilege reduces their start up expenses by up to $5,500. That is a significant saving. Too bad the rest of the buyers still have to endure this exorbitant tax. Investors can write off this expense so that it softens the burden, but our everyday homebuyers cannot. I think we all should take the time to protest this tax by writing to our M.L.A.'s.
Years ago first time buyers were able to get either a $1,000. outright grant or a $5,000 repayable second mortgage at a fairly favorable interest rate. Just so you know, those perks disappeared a long time ago.
Under the new budget if a first time home buyer buys a home over the new limit of $375,000 but under $400,000, they receive a proportional exemption from the tax.
Also mentioned in the new budget is that homeowners with houses assessed up to $950,000 will still qualify for the homeowners grant, assuming it is their principal residence. The grant is $570 for each homeowner unless they are a senior, in which case they get a homeowner's grant of $845.
Overall, I agree with many of the comments I heard from the media. This budget was inappropriately called a "housing budget". There is very little in this budget to do with housing.
Jane Field works with RE/MAX Vernon. Jane has over 30 years experience in the Real Estate business. To suggest topics for future articles or to ask Jane questions, email or call 503-3755.
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