New provincial government incentives, along with a forecasted balanced market and continued strong housing starts, will support home purchases in 2017, especially by first-time home buyers.
First, the new B.C. Home Owner Mortgage and Equity Partnership (BC HOME Partnership) program kicks in on Jan. 16. This new, three-year, $700-million initiative gives a hand-up to first-time home buyers by contributing to the amount they have saved for a mortgage down payment. Up to $37,500, or up to 5% of the purchase price, will be provided to qualifying first-time buyers through a 25-year mortgage loan that is interest-free and payment-free for the first five years.
On top of the BC HOME Partnership program, other existing programs are available to help first-time buyers. This means instead of renting, families will now be able build their own equity in the housing market.
First-time home buyers can save up to $7,500 when purchasing a home valued up to $475,000 through the First Time Home Buyers Program, which exempts them from paying the property transfer tax. Or they can access the Newly Built Homes Exemption, which can help them save up to $13,000 in property transfer tax when purchasing a newly constructed or subdivided home worth up to $750,000.
For housing starts, 2017 is shaping up to be another good year for purchasers. In its latest Housing Market Outlook, the Canadian Mortgage and Housing Corporation (CMHC) is forecasting between 32,000 and 34,300 housing starts will take place in B.C. in 2017, including 10,200 to 10,800 single-detached homes.
While down from 2016 levels, CMHC’s housing starts forecast for 2017 remains well above the historical average. Not only is this great news for home purchasers but also for those involved in the residential real estate sector including contractors, builders and suppliers.
Meanwhile, the B.C. Real Estate Association (BCREA), in its 2016 Fourth Quarter Housing Forecast, predicts that, “market conditions are expected to trend toward greater balance in the face of moderating demand and rising new home completions.”
In addition to the BC HOME Partnership and property tax exemption programs, the provincial government has taken other steps to address housing market activity. This includes imposing a 15% tax on foreign home buyers and a 3% “luxury” property transfer tax on the portion of a home’s value over $2 million.
Rich Coleman, Minister of Natural Gas Development and Minister Responsible for Housing
“We’re putting taxpayers first when it comes to housing. We are taking concrete steps to ensure they have the means to purchase a home for their families. We’re building more rental stock to create homes for those not ready for ownership. And, we’re working with communities to ensure we have safe, comfortable and affordable housing for as many British Columbians as possible.”