Who Qualifies for the BC First Time Home Buyers' Exemption?

The first time home buyers' exemption can reduce or remove British Columbia property transfer tax for people buying their first home. But it comes with a list of conditions about you, the property and how you use it afterwards.

This article goes through each requirement so you can check where you stand. Because the details depend on your circumstances, it is worth confirming your position with a lawyer before you rely on it.

This article covers the law of British Columbia.

Requirements about you

At registration, each buyer claiming the exemption must meet all of the following.

• Be a Canadian citizen or permanent resident.
• Have lived in B.C. for at least one year before registration, or have filed at least two B.C. resident income tax returns in the last six taxation years.
• Never have owned a registered interest in a principal residence anywhere in the world.
• Never have received a first time home buyers' exemption or refund.

Foreign entities and taxable trustees are not eligible.

Requirements about the property

The home must be used only as your principal residence, contain only residential improvements, and be 0.5 hectares (1.24 acres) or smaller.

There is some flexibility: a partial exemption is also available if the lot is larger than 0.5 hectares or has another building besides the principal residence.

Price caps

The exemption depends on the fair market value of the property. The caps changed on April 1, 2024, so the registration date matters.

If you are building a new home on a vacant lot, the FMV of the land plus the construction cost must stay under the same caps, and you must build and move in within the first year. Check for any budget changes before you rely on these figures.

How the tax and the claim work

Property transfer tax is charged on fair market value, meaning the price a willing buyer would pay a willing seller in the open market on the registration date. For open-market sales registered within a few months of the contract, the purchase price is generally a good indicator. The purchase price may not equal fair market value if values or the property's condition changed, or the sale was not an open-market sale.

The general rates are 1% of fair market value up to and including $200,000, 2% on the portion above $200,000 up to and including $2,000,000, and 3% on the portion above $2,000,000. For example, on a $500,000 fair market value the general tax is $2,000 plus $6,000, totalling $8,000. That gives you a sense of what the exemption may save.

• The buyer pays the tax when applying to register at a land title office, and must file a return whether or not the transaction is exempt.
• The buyer or their legal professional files the return and pays the tax when the transfer is registered, and legal professionals usually do this.
• Exemptions are claimed on the return using an exemption code.

Co-buyers, moving in and life events

If not all purchasers qualify, only the qualifying purchasers' ownership percentage is exempt. So buying with someone who has owned a home before may reduce the benefit.

You must move in within 92 days of the registration date and continuously occupy the home as your principal residence until the first anniversary of registration. A person who moves out before the first year may keep only part of the exemption. The ministry directs buyers to the program at 1-888-841-0090 or PTTENQ@gov.bc.ca for how that works.

The owner's death, or a transfer under a separation agreement or Family Law Act court order before the first anniversary, does not disqualify a claim.

What to do next

• List every buyer on the purchase and check each person against the four personal requirements.
• Confirm the expected fair market value against the cap for your registration date.
• Plan your move-in date so it falls within 92 days of registration.
• Tell your legal professional early that you want to claim the exemption so it is included on the return.

If you qualify but did not apply at registration, you can apply for a refund from the first anniversary until 18 months after registration. Be accurate on your declarations: a false statement that you have never owned a principal residence or never received the exemption leads to a penalty equal to the exemption or refund claimed, on top of that amount.

Frequently asked questions