Buying a home in British Columbia can be challenging for first-time buyers, given the high property prices in the province. Saving enough for a down payment, closing costs, and securing a mortgage can feel overwhelming. Fortunately, there are many programs and incentives in B.C. – as well as federal initiatives across Canada – to help make home ownership more affordable. This guide provides a clear overview of these opportunities, explaining the basics of specific tax breaks, grants, and loans, along with practical details on how they work and how to apply.
If you’re new to Canada or just new to homeownership, it’s crucial to focus on programs relevant to British Columbia (for example, U.S. resources like hudhomesusa.org won’t apply here). In B.C., first-time homebuyers can benefit from several provincial programs as well as federal supports. Below, you can read about each major program, its benefits, and example savings to illustrate how much you could save. With this knowledge, you’ll be better prepared to take advantage of every incentive on your path to owning a home.
Provincial Programs for First-Time Homebuyers in British Columbia
British Columbia offers several programs to reduce the upfront and ongoing costs of buying your first home. These provincial initiatives can lower the amount of Property Transfer Tax you pay and even provide annual property tax relief. Below are the key B.C. programs – including tax exemptions and homeowner grants – and how they help make your first home purchase more affordable.
First-Time Home Buyers’ Program (Property Transfer Tax Exemption)
One of the most significant B.C. benefits for new buyers is the First-Time Home Buyers’ Program, which reduces or eliminates the Property Transfer Tax (PTT) on your home purchase. The PTT in B.C. is normally 1% on the first $200,000 of the purchase price and 2% on the amount above $200,000 (up to $2 million, with higher rates beyond). For a first-time buyer, this program can save up to $8,000 in tax.
How it works: If you qualify, the province will waive the PTT on the first $500,000 of your home’s value. In practical terms, that means no PTT if your home costs $500,000 or less. For homes above $500,000, you get a partial exemption (a tax credit of up to $8,000). As of 2025, homes up to about $835,000 can receive the maximum $8,000 reduction, with the benefit phasing out between $835,000 and $860,000. Above $860,000, no first-time buyer exemption applies.
Example savings: On a $600,000 starter home, the normal PTT would be roughly $10,000. With the first-time buyer exemption, you would save $8,000 and pay only about $2,000 in transfer tax. That’s money you can redirect toward other expenses or your mortgage loan. If your home is $500,000 or less, you’d pay $0 PTT – a huge savings for a new buyer.
Eligibility: To qualify, you (and any co-buyers) must be Canadian citizens or permanent residents who have never owned a principal residence anywhere in the world. You also need to meet B.C. residency requirements (lived in B.C. for at least a year prior to the purchase, or filed B.C. income taxes in two of the last six years). The property must be your principal residence and have a fair market value below the program’s threshold. Permanent residents who are newcomers to B.C. are eligible as long as they meet the residency and first-time ownership criteria.
(Application is handled during closing – your lawyer or notary will apply for the exemption on the property transfer documents, so you won’t pay the tax if you qualify.)
Newly Built Home Exemption (PTT Relief for New Homes)
B.C. also offers a Property Transfer Tax break for those buying a brand-new home. The Newly Built Home Exemption can eliminate or reduce the PTT on newly constructed homes, which is a big help if your first home is a new build.
How it works: If you purchase a newly built home (such as a new condo, townhouse, or house) that will be your principal residence, and the price is up to $1,100,000, you qualify for a full PTT exemption. This could save you up to $20,000 (the approximate PTT on a $1.1 million home). For new homes valued between $1.1 million and $1.15 million, a partial exemption applies (phasing out at $1.15 million).
Example: Suppose you buy a newly built condo for $900,000. Normally, the PTT on this purchase would be about $16,000. Under the Newly Built Home Exemption, you would pay $0 in transfer tax – saving the entire $16,000.
Note: You do not have to be a first-time buyer to use this program – it’s open to anyone purchasing a new primary residence. However, you cannot double-dip with the First-Time Home Buyers’ Program on the same purchase. If your home qualifies as newly built, this exemption will generally provide the greater benefit for higher-value properties. (Your notary will apply the appropriate exemption at closing.)
Additionally, keep in mind that buying a newly built home means paying GST (5%). The federal government offers a GST New Housing Rebate that can refund some of the GST on new homes under a certain price (up to a $6,300 rebate on homes priced around $350,000). Many new-home buyers in B.C. qualify for at least a partial GST rebate, which helps further reduce the cost of a new home.
BC Home Owner Grant (Annual Property Tax Grant)
Once you own a home, the BC Home Owner Grant can reduce your yearly property taxes on your principal residence. This is not just for first-time buyers – any owner-occupier can claim it – but it provides ongoing savings that are very welcome when you’re budgeting for home ownership.
Benefit: The basic grant is $570 per year off your property tax bill if your home is in a designated urban area (e.g. Metro Vancouver, Greater Victoria, or the Fraser Valley). For homes in rural or northern areas, the grant is higher, at $770 per year. Seniors, veterans, or persons with disabilities may qualify for an additional grant on top of the basic amount (up to a total of $1,045 in relief).
Eligibility: To get the grant, the home must be your principal residence, and its assessed value must fall below a certain threshold (for 2025, the full grant is available for homes assessed up to approximately $2.175 million; above that, the grant amount reduces and is phased out completely for very high-value properties). Most first-time buyers’ homes will be under the threshold, especially outside of the priciest markets.
How to claim: You apply for the Home Owner Grant each year when you receive your property tax notice. It’s a simple application (often done online through your city’s property tax portal or the province’s website) where you verify you reside at the property. The grant then directly reduces the property tax you owe. In effect, if your annual property tax is $3,000 and you qualify for the $570 grant, you would pay $2,430 instead. This grant essentially acts as a yearly rebate to make owning a home more affordable in the long term.
BC Home Owner Mortgage and Equity Partnership (Down Payment Assistance)
A few years ago, the B.C. government introduced the BC HOME Partnership program to help first-time buyers fund their down payment. While this program stopped accepting new applications in 2018, it’s worth noting what it offered – both as a historical help and in case similar programs appear in the future.
Program summary: The BC HOME Partnership provided a matching down payment loan of up to 5% of the purchase price (to a maximum of $37,500). The loan was interest-free for the first five years. For example, on a $500,000 home, if you had saved a $25,000 down payment (5%), the program could lend you another $25,000. This doubled your down payment to $50,000 (10%), reducing the size of your mortgage and lowering your monthly payments. Buyers would start paying back the second loan after five years, over a 20-year amortization.
Although this program is no longer available to new buyers, it helped many people get into their first homes by overcoming the down payment hurdle. Keep an eye on provincial housing announcements – similar initiatives could be launched as housing affordability continues to be a priority.
Federal Programs and Incentives for First-Time Buyers in Canada
First-time homebuyers in B.C. can also tap into several federal government programs. These apply across Canada and can provide tax relief or financial support to make buying a home easier.
First-Time Home Buyers’ Tax Credit (HBTC)
The First-Time Home Buyers’ Tax Credit is a one-time federal income tax credit that puts cash back in your pocket after you purchase your first home.
Benefit: It allows you to claim a $10,000 “Home Buyers’ Amount” on your income tax return for the year of your home purchase. This translates to a tax reduction of up to $1,500 (since the non-refundable credit is 15% of $10,000). In practical terms, you could either get up to $1,500 more as a tax refund or pay $1,500 less in income taxes for that year.
Eligibility: You qualify if neither you nor your spouse/common-law partner owned and lived in a home in the four years prior to buying your home. (There is an exception if you are eligible for the disability tax credit – then you may claim the HBTC even if you owned a home recently.) The home you buy must be a qualifying principal residence in Canada.
How to claim: You simply enter the $10,000 Home Buyers’ Amount on your tax return (Line 31270 on the federal return). There’s no separate form needed, but keep your purchase documents on file. (If you’re purchasing with a partner, you can share the credit between you, as long as the total doesn’t exceed the $10,000 limit.)
First Home Savings Account (FHSA)
The First Home Savings Account is a new savings plan that helps Canadians put aside money for a first home, with special tax advantages.
How it works: You can contribute up to $8,000 per year to an FHSA, to a lifetime maximum of $40,000. Contributions are tax-deductible (like an RRSP), and withdrawals for a home purchase are tax-free (like a TFSA). Investment growth in the account is also tax-free. Essentially, the FHSA lets you save for a down payment and get a tax break while doing so, then withdraw the money without paying tax when you buy your first home.
Benefit: If you contribute the full $40,000 over time, you’ll have that money (plus any investment earnings) available for your down payment, completely tax-free. For example, if you saved $8,000 per year for five years, you could deduct each of those contributions from your income (reducing your taxable income each year). When you later withdraw, say, $45,000 from the FHSA to purchase your home, you pay no tax on that withdrawal.
Eligibility: To open an FHSA, you must be a Canadian resident, 18 or older, and a first-time homebuyer (meaning you have not owned a home in the current year or any of the previous four calendar years). You can hold an FHSA for up to 15 years or until age 71, whichever comes first. If you haven’t used the funds to buy a home by then, any remaining savings can be transferred into your RRSP or RRIF without tax consequences.
Home Buyers’ Plan (RRSP Withdrawal)
The Home Buyers’ Plan (HBP) lets you tap into your Registered Retirement Savings Plan (RRSP) to help fund your home purchase. It’s essentially an interest-free loan to yourself.
How it works: You can withdraw up to $60,000 from your RRSP (per person) to use toward buying or building a qualifying first home. A couple could therefore draw up to $120,000 combined. Withdrawals under the HBP are not taxed as income, provided you repay the amount over time. After you withdraw, you have a grace period of two years, then you must start repaying the withdrawn amount into your RRSP, with up to 15 years to fully repay. Each year, roughly 1/15 of the amount must be repaid (though you can pay it back faster if you want).
Example: If you withdraw $20,000 from your RRSP for a down payment, you will need to start putting about $1,333 per year back into your RRSP after two years, for 15 years, to repay it. That works out to around $111 per month as a required minimum repayment. If you stay on schedule, you won’t incur any tax on the withdrawal.
Eligibility: You must be a first-time buyer (no home ownership in the past four years) and a Canadian resident. The RRSP funds must have been in your account for at least 90 days before withdrawal. You also need a written agreement to buy or build a home. This program is often used alongside the FHSA – you can combine both to boost your down payment if you have enough savings.
First-Time Home Buyer Incentive (Shared Equity Loan)
The First-Time Home Buyer Incentive is a federal program that can help lower your monthly mortgage payments. Through this program, the government offers an interest-free loan that goes toward your down payment in exchange for a share of your home’s equity.
How it works: The incentive provides 5% of the purchase price for a resale home, or 5% (and in some cases 10%) for a newly built home, as a down payment top-up. This money lowers your mortgage amount, which reduces your monthly payments. You don’t pay interest or ongoing payments on the incentive; instead, you repay it when you sell the home or after 25 years – whichever comes first. The amount you repay is the same percentage of the home’s value at the time of repayment. For example, if you received 5% down payment assistance on a $400,000 home (=$20,000) and later sold the home for $500,000, you would pay back 5% of $500,000 (=$25,000).
Eligibility: To qualify, you must be a first-time buyer with household income under a certain limit (around $120,000, or up to $150,000 in high-cost areas like Metro Vancouver). The home purchase price is also capped by the program’s formula (generally no more than 4 to 4.5 times your income, which means the program is mainly applicable to homes under roughly $700–$800k for many buyers). The property must be a primary residence, and the mortgage must be insured if your down payment is under 20%.
Benefit: The main benefit is a smaller mortgage and lower monthly payments. If the government covers 5% of your home price, your mortgage principal is that much smaller – potentially saving you hundreds of dollars a month in payments. Just remember, when you sell, you’ll share some of the home’s appreciation (or depreciation) with the government.
Conclusion
For first-time buyers in British Columbia, these programs and incentives can collectively save you tens of thousands of dollars and make the dream of owning a home much more attainable. By combining several programs – for example, using your FHSA and RRSP for the down payment, claiming the tax credit, and getting a Property Transfer Tax exemption – you can significantly reduce both your upfront and ongoing costs. It pays to do your homework: check each program’s requirements early, so you can plan your purchase to take full advantage of the support available.
Beyond government programs, remember to line up a good mortgage deal. Shop around with different lenders or consult a mortgage broker to compare interest rates and get a pre-approval. Even a small difference in the interest rate can save you a lot over time, so consider getting a rate quote from online platforms (for instance, nesto) in addition to traditional banks. Also budget for expenses like mortgage default insurance (required if your down payment is under 20%) and home insurance to protect your property. If you’re a newcomer to Canada, be mindful of residency rules – you might need to live in B.C. for a period or file taxes here to qualify for certain provincial programs.
Taking advantage of these programs requires some effort, but it can substantially ease the financial burden of buying a home. As you prepare to go through the process, it can be invaluable to have expert guidance.
Ready to take the next step? Reach out to Adam Chahl, a real estate expert who specializes in helping first-time homebuyers in B.C. With his in-depth knowledge of the local housing market and all the available incentives, Adam can guide you through each stage – from finding the right property to maximizing your savings through grants and rebates. Contact Adam Chahl today to get professional support on your home ownership journey.
Posted by Adam Chahl on
Leave A Comment