What do I need to know as a First-Time Home Buyer?

Closing Costs

Closing Costs are all the fees and expenses you will pay before taking the title of the property. The rule of thumb is to always make sure you have 2% - 4% of the purchase price set aside for the closing costs!

Other Common Closing Costs

• Property Transfer Tax*

• Adjustment Fee

• Legal Fee

• Title Insurance

• Home Insurance

• Appraisal

• Home Inspection

• GST - for newly built homes

Property Transfer Tax

Home buyers in BC are required to pay Property Transfer Tax (PTT) when purchasing a property. This is calculated based on 1% on the first $200,000 of the purchase price and 2% on the remainder, including $2 million. A further 2% will be payable on the portion greater than $3 million. However, if the property is purchase as the Primary Residence, you might be eligible for the following exceptions.

First Time Home Buyers Exemption

• Full exemption up to $500,000

• Partial exemption form $500,000 to $525,000

Newly Built Homes Exception (e.g. Pre-Sales)

• Full exemption up to $750,000,

• Partial exemption form $750,000 to $800,000

Home Buyer's Plan

If you are a first-time home buyer looking to withdraw money from your RRSP towards your down payment, you should know about the Home Buyer's Plan.

This is the program under the CRA where allows first-time home buyers to borrow up to $35,000 from your RRSP for a down payment, tax-free.

Since the Home Buyers' Plan is considered a loan, you must repay the amount you withdrew from your RRSP within 15 years. The first payment is due two years after you first withdrew the money, but you can start paying it back as early as you wish.