BC First-Time New Home Buyers' Bonus

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BC First-Time New Home Buyers' Bonus

Post: # 4736Post Flipping4Profit.ca
Sun Aug 05, 2012 4:41 pm

BC First-Time New Home Buyers' Bonus


1. What is the BC First-Time New Home Buyers' Bonus?

The BC First-Time New Home Buyers' Bonus is a one-time payment worth up to $10,000 for BC residents who are first-time home buyers and who purchase an eligible new home.

2. Who is a first-time home buyer?


A first-time home buyer is an individual who has never previously owned a primary residence anywhere in the world. In the case of multiple buyers of a home, each buyer must be a first-time home buyer having never owned a primary residence anywhere in the world.

3. Am I able to requalify as a first-time home buyer?


You cannot requalify as a first-time new home buyer. This rule may be different from other federal or provincial programs for first-time home buyers (e.g. Home Buyers' Plan administered by the Canada Revenue Agency).

4. What is a primary residence?


A primary residence is generally a house that you own, jointly or otherwise, that you intend to live in on a permanent basis. You may have more than one place of residence, but you are considered to have only one primary residence.

5. Do I qualify for the bonus?


You may qualify for the bonus if:
you purchase or build an eligible new home located in BC,
you, or for couples, you and your spouse or common-law partner, have never previously owned a primary residence,
In the case of multiple buyers of a home, each buyer must be a first-time home buyer having never owned a primary residence anywhere in the world,
you file a 2011 BC resident personal income tax return, or if you move to BC after December 31, 2011, you file a 2012 BC resident personal income tax return (you will not be eligible for the bonus if you move to BC after December 31, 2012),
you are eligible for the BC HST New Housing Rebate, and
you intend to live in the home as your primary residence.


6. What is the BC HST New Housing Rebate?


For information about the GST/HST New Housing Rebate, please follow this link:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... y-eng.html

7. What are the New Housing Transition Rules?

For information about the New Housing Transition rules, including raising the BC HST rebate threshold to $850,000 and the provincial grant, please follow this link: http://pstinbc.ca/
Top of page.

8. What is the Grant for New Secondary or Recreational Residences?

For information about the Grant for New Secondary or Recreational Residences please follow this link: http://www.sbr.gov.bc.ca/individuals/Customer_Service/
BonusesAndGrants/grant_new_sec_rec_residences.htm

9. What is an eligible new home?[/b

An eligible new home includes new homes (i.e. newly constructed and substantially renovated homes) that are purchased from a builder and that are owner-built.

The bonus will be available in respect of new homes purchased from a builder where:

a written agreement of purchase and sale is entered into on or after February 21, 2012,
HST is payable on the home, and
no 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 of land is entered into on or after February 21, 2012,
construction of the home is complete, or the home is occupied, before April 1, 2013, and
no one else has claimed a bonus in respect of the home.


10. What is a substantially renovated home?


A substantially renovated home is one where all, or substantially all, of the interior of a building has been removed or replaced. Generally, 90% or more of the interior of the house that existed before the renovations began must be renovated to qualify as a substantially renovated home (90% test).


11. The builder sent in my BC HST New Housing Rebate. Am I still entitled to the bonus?

Yes, if the builder paid the total amount of the BC New Housing Rebate directly to you or credited the amount against the total amount payable for the house, you are eligible for the bonus if you meet all the other eligibility requirements.

12. Is the bonus assignable to the builder?


No, the bonus cannot be assigned to the builder. The individual must apply directly to the Ministry of Finance for their bonus.

13. The eligibility criteria states that a written agreement of purchase and sale is entered into on or after February 21, 2012. If I made an offer on February 20, 2012 to the seller and the seller did not sign the agreement until February 21, 2012 am I entitled to the bonus?


If the purchaser and the seller sign the written agreement of purchase and sale on different dates, the agreement will be considered entered into on the date of the last signature of a party (i.e. the purchaser or the seller) to the written agreement. In your case, the last signature was the sellers, the agreement will be considered to have been entered into on February 21, 2012 and you will be eligible for the bonus if you meet all the other eligibility requirements.

If the purchaser and seller collapse a contract of purchase and sale of a home entered into prior to February 21, 2012, and enter into a new contract of purchase and sale of that home to access the BC First-Time New Home Buyers' Bonus, the Bonus will be denied. For purposes of the bonus program the new contract of purchase and sale will be considered to be part of the original written agreement that was entered into prior to February 21, 2012.

13.1. I purchased land in 2011, and I plan to build my home on this land starting in April 2012. Will this home qualify for the bonus?


No, for an owner-built home to qualify for the bonus, you must have entered into the contract of purchase and sale in respect of the land on or after February 21, 2012.

13.2. I inherited land from my father in 2011, and I plan to build my home on this land starting in April 2012. Will this home qualify for the bonus?


No, for an owner-built home to qualify for the bonus, you must have inherited the land on or after February 21, 2012.

14. I owned a house in Ontario and will purchase my first house in BC. Am I eligible for the BC First-Time New Home Buyers' Bonus?

If you previously owned a home in Ontario that was your primary residence you are not eligible for the BC First-Time New Home Buyers' Bonus. A first-time home buyer is an individual who has never owned a primary residence anywhere in the world.

15. My wife and I would like to purchase a home together. I owned a primary residence before we were married. Do we qualify for the bonus because we have never owned a primary residence together? My wife will be the only person on title.

Neither you nor your spouse will qualify for the BC First-Time New Home Buyers' Bonus. For a couple to be considered a first-time buyer neither you nor your spouse or common law partner can have previously owned a primary residence even if the individual that owned a home previously is not on title.

16. I am looking at purchasing a new home. I will have 2/3 ownership and my parents will have 1/3 ownership. I am a first time buyer, but they are not. Am I eligible for a reduced amount of the bonus based on my proportion of ownership?

Based on the information provided you will not qualify for the BC First-Time New Home Buyers' Bonus. In the case of multiple buyers of a home, each buyer must be a first-time buyer, having never owned a primary residence anywhere in the world. The bonus will not be pro-rated based on percentage of ownership.

17. How is the bonus calculated?

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.

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), or
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).

18. What is the purchase price?


The purchase price is the consideration you paid for the home. Consideration does not include HST or property transfer taxes.

19. Is the bonus taxable?

No. The bonus is a refundable personal income tax credit, meaning it will not be added to your income on your tax return.

20. How do I claim the bonus?

Individuals must apply for the bonus through the Ministry of Finance. Information on the application process and the application form is available at the following link:

http://www.sbr.gov.bc.ca/individuals/Income_Taxes/
Personal_Income_Tax/tax_credits/fthb_bonus_forms.htm


21. Is it true that the bonus will reduce my taxes payable and I will only receive a portion of the bonus depending on my income tax bracket?


The bonus is not claimed on your income tax return. The bonus will not reduce the amount of taxes payable on filing your personal income tax return. The bonus will be issued by the BC Ministry of Finance. You may be entitled to receive up to $10,000 but the amount of the refund is reduced if your family net income exceeds $150,000.

22. What if the Canada Revenue Agency (CRA) reassesses my income tax return after I apply for the bonus?

You must notify us of any changes to your income tax return (e.g. changes to your net income as reported on line 236 of your return) that could affect the amount of your bonus.

22.1. What if, after I apply for the bonus, the Canada Revenue Agency (CRA) denies my application for the BC HST New Housing Rebate, or provides me with an assessment or reassessment which changes the amount of my rebate?


You must notify us of any changes to the amount of your BC New Housing Rebate that could affect the amount of your bonus.

22.2. Is there a penalty for failing to notify the ministry of an assessment, reassessment or denial of my application for the BC HST New Housing Rebate by the Canada Revenue Agency?

A penalty of up to $2,500 may be imposed if you fail to notify us within 90 days of an assessment or reassessment of your net income or your BC HST New Housing Rebate that affects the amount of your bonus.

23. Where do I get the form to apply for the bonus?


The application form and the guide are available at: http://www.sbr.gov.bc.ca/individuals/Income_Taxes/
Personal_Income_Tax/tax_credits/fthb_bonus_forms.htm

24. What documentation will I need to provide to claim the bonus?

You will need to provide the following documents with your application:

A copy of your Notice of Assessment of Income Tax for the eligible tax year.
A copy of your spouse or common-law partner's Notice of Assessment for that year.
A complete copy of your GST/HST New Housing Rebate Application for Houses Purchased from a Builder (form GST 190) including the GST 190 British Columbia Rebate Schedule (Form RC7190 – BC) or a copy of your GST/HST New Housing Rebate Application for Owner-Built Houses (Form GST 191) including the GST 191 British Columbia Rebate Schedule (Form RC7191 – BC).
A copy of the final, signed purchase and sale agreement for your eligible new home, and/or the land, mobile home or floating home.
A copy of the completed and signed Schedule A - Certification BC First-Time New Home Buyers' Bonus (FIN 520A). For each co-owner and/or the spouse or common-law partner of the applicant attach a completed and signed Schedule A – Certification BC First-Time New Home Buyers' Bonus. A completed schedule must be included for the spouse or common-law partner of the applicant even if he or she is not an owner of the home.

For owner-built homes, you must keep receipts for all construction costs.


25. Is there a penalty for false statements or omissions?


Penalties may be imposed if you make a false statement or omit information on your Application for the BC First-Time New Home Buyers' Bonus or any of the supporting documentation. The penalty imposed will be equal to the excess of the amount of the bonus received. You would be required to repay both the excess of the amount of the bonus received and the penalty imposed.

26. I moved to BC on January 20, 2012. I purchased an eligible home on May 26, 2012. When will I receive my bonus payment?


If you move to BC after December 31, 2011, and before January 1, 2013, you must submit a copy of your 2012 Notice of Assessment from the Canada Revenue Agency, which is issued after you file your 2012 personal income tax return in 2013. You may submit the application and other supporting material in advance; however your refund cannot be issued until a copy of the 2012 Notice of Assessment is received.

27. Is it true that if I receive a $10,000 bonus cheque, I have to use the money to pay down my mortgage?

No. An individual who receives the bonus is not required to use it to pay down their mortgage.

28. My brother and I purchased an eligible new home. He claimed the BC HST New Housing Rebate and completed and submitted the application form for the BC First-Time New Home Buyers' Bonus. We would like the amount of the bonus to be divided in half and to receive two cheques, one made out to each of us. Is this possible?

No, the cheque cannot be split between purchasers. The bonus cheque will be made out to the individual who completes the application, and only one individual can complete the application. This individual is the same individual who claims the BC HST New Housing Rebate.

29. Is there a deadline for filling my application for the bonus?

Yes, your application for the bonus must be filed on or before March 31, 2015.

30. Who do I contact if I have additional questions?


You may contact


Telephone:
250 387-3332 or 1-877-387-3332
Fax: 250 356-9243

Mail:
BC First-Time New Home Buyers' Bonus
PO BOX 9444 STN PROV GOVT
Victoria BC V8W 9W8

Email:
[email protected]

Issued: February 2012

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