In its 2012 Budget announced yesterday, the Provincial Government announced a temporary one-time refundable personal income tax credit worth up to $10,000.
ELIGIBLE FIRST-TIME NEW HOME BUYER
You 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, have never previously owned a primary residence;
You file a 2011 B.C. resident personal income tax return, or if you move to B.C. after December 31, 2011, you file a 2012 B.C. resident personal income tax return (you will not be eligible for the bonus if you move to B.C. after December 31, 2012);
You are eligible for the B.C. HST New Housing Rebate; and
You intend to live in the home as your primary residence.
A written agreement of purchase and sale is entered into on or after February 21, 2012;
HST is payable on the home (e.g., HST will generally be payable if ownership or possession of the home transfers before April 1, 2013
Amount of the Bonus
The bonus is equal to 5% of the purchase price of the home (or in the case of owner-built homes, 5% of the land and construction costs subject to HST) to a maximum of $10,000.
PHASE-OUT FOR HIGHER INCOME EARNERS
The bonus will be reduced based on an individual’s/couple’s net income (line 236 of your income tax return) using the following formula:
For single individuals, the bonus is reduced by 20 cents for every dollar 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 in family net income over $150,000 (bonus is reduced to zero at $250,000 family net income).
THE B.C. FIRST-TIME NEW HOME BUYERS’ BONUS
Individuals must apply for the bonus through the B.C. government. Individuals can apply once application forms have been posted on the B.C. Ministry of Finance website later this year. Applicants will be required to submit documentation demonstrating eligibility for the bonus.