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Vancouver Mortgage Broker Explains Down Payment For First Time Home Buyers
Jared: Essentially, that's a good question. First and foremost, you have to put at least
5% down. Now that 5% down payment can come from RSP's if you have savings, you can borrow
up to $20,000 tax free. It can come from gifted funds, from a family member. Or you need to
have it saved up in your possession.
But other than the 5%, you really only have your legal costs, which vary between roughly
$750 to $1,000 and then there may be, purchasing a property there's different costs associated
with that. So if you have a house inspection, or anything on that side.
The biggest thing that people are sometimes not aware of, I'm not sure if everyone is
aware of is the property purchase tax. That's something the provincial government charges.
And they make a lot of money with it here in B.C. And what it is, it's 1% of the first
$200,000, and then it's 2% of the balance. And there's no cap and no limit on that.
So you can imagine when you're buying a $1 Million, $2 Million, $3 Million, what you
pay in tax. And so there's no limit on that. But if you're a first time home buyer and
you buy under $425,000, you're exempt from that tax.
So it's only if you purchase over that, then that is your major expense when you're purchasing
a home is property purchase tax. That's your number one largest expense.