BC First-Time Home Buyer Programs
British Columbia offers several programs specifically designed to help first-time buyers get into the market. Here are the key ones to know about:
BC First Time Home Buyers Program (Property Transfer Tax Exemption)
If you are a Canadian citizen or permanent resident buying your first home in BC, you may be exempt from the property transfer tax on purchases up to $500,000. A partial exemption applies on homes between $500,000 and $525,000. On a $500,000 purchase, this saves you $8,000 in transfer tax.
Newly Built Home Exemption
Buying a newly built home? You may qualify for a property transfer tax exemption on new homes up to $750,000, with a partial exemption up to $800,000. This can be combined with being a first-time buyer but also applies to non-first-time buyers purchasing new construction.
BC Home Owner Grant
While not exclusive to first-time buyers, the BC Home Owner Grant reduces the amount of property tax you pay each year. The basic grant is up to $570 for properties assessed below the threshold (approximately $2.15 million in 2026).
Federal Programs for First-Time Buyers
Home Buyers' Plan (HBP) — RRSP Withdrawal
The Home Buyers' Plan allows you to withdraw up to $60,000 from your RRSPs tax-free to put toward the purchase of your first home. If you are buying with a partner who is also a first-time buyer, you can each withdraw up to $60,000 for a combined total of $120,000.
The withdrawn amount must be repaid to your RRSP over a 15-year period, starting the second year after the withdrawal. If you miss a repayment, that amount is added to your taxable income for the year.
First Home Savings Account (FHSA)
The FHSA is a registered account that combines the benefits of an RRSP and a TFSA. You can contribute up to $8,000 per year (up to a lifetime maximum of $40,000), and contributions are tax-deductible like an RRSP. When you withdraw funds to buy your first home, the withdrawal is tax-free like a TFSA.
The FHSA can be used in combination with the Home Buyers' Plan, giving you access to up to $100,000 in tax-advantaged funds for your down payment (per person).
Down Payment Requirements in Canada
| Purchase Price | Minimum Down Payment |
|---|---|
| Up to $500,000 | 5% of purchase price |
| $500,001 to $1,500,000 | 5% on the first $500,000 + 10% on the portion above $500,000 |
| Over $1,500,000 | 20% minimum (mortgage insurance not available) |
For example, on a $750,000 home, the minimum down payment would be $25,000 (5% of $500,000) plus $25,000 (10% of $250,000) for a total of $50,000 (6.67% of the purchase price).
CMHC Mortgage Insurance Explained
If your down payment is less than 20% of the purchase price, you are required to purchase mortgage default insurance (commonly called CMHC insurance, though Sagen and Canada Guaranty also provide it). This insurance protects the lender, not you, but it is a requirement for high-ratio mortgages.
The insurance premium is based on your loan-to-value ratio and is added to your mortgage balance:
| Down Payment | Insurance Premium |
|---|---|
| 5% to 9.99% | 4.00% of mortgage amount |
| 10% to 14.99% | 3.10% of mortgage amount |
| 15% to 19.99% | 2.80% of mortgage amount |
The Mortgage Stress Test
All mortgage borrowers in Canada must pass a stress test, regardless of their down payment amount. You must qualify at the higher of your actual mortgage rate plus 2%, or the benchmark qualifying rate of 5.25%.
With today's best 5-year fixed rate at 3.94%, you would be stress-tested at 5.94% (3.94% + 2%). This means you need to demonstrate that you can afford payments at the higher rate, even though you would actually pay the lower contract rate.
December 2024 Rule Changes: What First-Time Buyers Need to Know
The federal government introduced significant mortgage rule changes in December 2024 that benefit first-time buyers:
Insured Mortgage Cap Raised to $1.5 Million
The maximum purchase price eligible for insured mortgages (less than 20% down) was raised from $1 million to $1.5 million. This is a game-changer for buyers in expensive markets like Vancouver and Victoria, where many properties exceed the previous $1 million threshold.
30-Year Amortization for New Builds
First-time buyers purchasing newly built homes can now access 30-year amortization periods on insured mortgages, up from the previous 25-year maximum. This reduces monthly payments by approximately 8% to 10%, making it easier to qualify and improving cash flow.
These changes apply to insured mortgages only (down payment less than 20%). They represent the most significant expansion of mortgage access for first-time buyers in over a decade.
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