The First Time Home Buyers program was amended July 30, 1996 by raising the maximum value of the residence purchased and by raising the maximum amount by which mortgage financing can be paid down in the first year. In the Capital Regional District, residences up to $275,000.00 will qualify for the first time home buyer's exemption to property transfer tax. This threshold also applies in the Greater Vancouver, Central Fraser Valley, Dewdney Allouette, and Fraser Cheam Regional Districts. The limit is $225,000.00 elsewhere in the province.

If the principal residence was purchased on or after May 1, 1996 and is located within the boundaries of the Capital Regional District or the other lower mainland regional districts named above, the principal amount borrowed may be paid down by up to $11,000.00 in the first year of ownership without becoming disqualified for the tax exemption.

To qualify for relief from Property Transfer Tax at time of purchase, the cost of the residence must not exceed the above threshold and mortgage financing must be 70% or more of the fair market value of the residence. The purchaser must be a Canadian citizen or permanent resident of Canada who has resided in British Columbia for twelve consecutive months prior to the purchase date. They must never have previously held a registered interest in a principal residence anywhere in the world. Prior ownership of non-residential real estate is not a disqualifier.

Financing can be a sticky point. It must be 70% or more of the fair market value of the residence and cannot be borrowed from related individuals. It is also mandatory that the loan be for a term of at least one year. If the term is for less than a year or the mortgage is a demand mortgage which does not state the term on its face, the purchaser must pay the tax at the time of purchase and apply for a refund at the end of the year. Vacant land can qualify for the exemption but construction of the residence must be completed within the year following registration and the purchasers must reside on the property for the remainder of the year. The fair market value of the land and the cost of building the residence must not exceed the maximum allowable values set out above. All buildings on the property must be classified as residential; otherwise there can only be a partial exemption from the tax. This is also true of land exceeding .5 hectares (1.24 acres) in size. Only a partial exemption will apply. Nevertheless, the entire purchase price cannot exceed the maximum allowable limit.

Eligible first time home buyers who purchased a principal residence after May 1, 1996 where the price was greater than the former maximum limits but within the new limits and who paid property transfer tax may contact the administrator, Property Transfer Tax, in Victoria at 387-0604 or by fax at 953-3094 to request a refund. Wouldn't your clients be impressed if you contacted them with this good news!

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