BC First-Time New Buyer's Bonus Eligibility Rules

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THE B.C. FIRST-TIME NEW HOME BUYERS' BONUSSubject to approval by the legislature, the B.C. government intends toimplement a temporary BC First-Time New Home Buyers' Bonus.Effective February 21, 2012, to March 31, 2013, the bonus is a onetimerefundable personal income tax credit worth up to $10,000.Requirements to Qualify for the BonusELIGIBLE FIRST-TIME NEW HOME BUYERYou will qualify as a first-time new home buyer if:You purchase or build an eligible new home located in B.C.;You, or for couples, you and your spouse or common law partner, havenever previously owned a primary residence;You file a 2011 B.C. resident personal income tax return, or if youmove to B.C. after December 31, 2011, you file a 2012 B.C. residentpersonal income tax return (you will not be eligible for the bonus if youmove to B.C. after December 31, 2012);You are eligible for the B.C. HST New Housing Rebate; andYou intend to live in the home as your primary residence.ELIGIBLE NEW HOMEAn eligible new home includes new homes (i.e., newly constructed andsubstantially renovated homes) that are purchased from a builder andthat are owner-built. The bonus will be available in respect of newhomes purchased from a builder where:A written agreement of purchase and sale is entered into on or afterFebruary 21, 2012;HST is payable on the home (e.g., HST will generally be payable ifownership or possession of the home transfers before April 1, 2013 -see further details below); andNo one else has claimed a bonus in respect of the home.The bonus will be available in respect of owner-built homes where:A written agreement of purchase and sale in respect of the land andbuilding is entered into on or after February 21, 2012;Construction of the home is complete, or the home is occupied, beforeApril 1, 2013; andNo one else has claimed a bonus in respect of the home.A substantially renovated home is one where all or substantially all ofthe interior of a building has been removed or replaced. Generally,90% or more of the interior of the house must be renovated to qualifyas a substantially renovated home (90% test).MAXIMUM AMOUNTThe bonus is equal to 5% of the purchase price of the home (or in thecase of owner-built homes, 5% of the land and construction costssubject to HST) to a maximum of $10,000.PHASE-OUT FOR HIGHER INCOME EARNERSThe bonus will be reduced based on an individual's/couple's netincome (line 236 of your income tax return) using the followingformula:For single individuals, the bonus is reduced by 20 cents for everydollar in net income over $150,000 (bonus is reduced to zero at$200,000 net income).For couples, the bonus is reduced by 10 cents for every dollar infamily net income over $150,000 (bonus is reduced to zero at$250,000 family net income).THE B.C. FIRST-TIME NEW HOME BUYERS' BONUSAdditional InformationAPPLICATION PROCESSIndividuals must apply for the bonus through the B.C. government.Individuals can apply once application forms have been posted on theB.C. Ministry of Finance website later this year. Applicants will berequired to submit documentation demonstrating eligibility for thebonus.ELIGIBLE NEW HOMEThe bonus is available in respect of new homes (i.e., newlyconstructed and substantially renovated homes) where HST is payable.HST will generally be payable on homes purchased from a builderwhere ownership or possession transfer before April 1, 2013. Potentialbuyers should consult with the builder to determine if the home will besubject to the HST.For owner-built homes, the bonus will be based on land andconstruction costs subject to the HST. Eligible new homes will include:Detached Houses, semi-detached houses, duplexes and townhouses,Residential condominium units,Mobile homes and floating homes, andResidential units in a cooperative housing corporation.For More InformationINCOME TAXATION BRANCHMinistry of FinanceProvince of British ColumbiaTelephone: (250) 387-3332 or 1 (877) 387-3332Email: ITBTaxQuestions@gov.bc.cae Professional: