A new perk for first time home buyers is a $10,000 bonus in the form of a refundable personal tax credit. The one-time credit is the equivalent of five percent of a home’s purchase price up to the $10,000 maximum. The bonus, announced in February, was part of the province’s budget and still has to go through legislation.
Vancity mortgage manager Ryan McKinley notes this will make a difference for many trying to get into the home market. The bonus will go directly to purchasers, by check. In the mean time, those purchases can open a line of credit to make the down, or borrow from family and then pay the money back when it comes through.
His firm already offers a program where the $10,000 would be put towards the down, with the homeowner paying it back when the cheque comes. Vancity would be charging interest, but even with that the bonus can be a huge help. The other option, if you already have down payment, would be to pay down the mortgage with the bonus. McKinley notes that would cut 2.5 years off your mortgage and save you $17,000, if you have a 30 year, 3.5 percent mortgage of $200,000. But be sure and check with your lender about prepayment penalties.
Application forms will be available once the bonus gets past legislation. The scheduled end date is March 31, 2013, the same date that the HST is removed.