Few homes in Metro Vancouver eligible for first time home buyers’ program

If you can find a home for $500,000 or less, you may be eligible for the first time home buyers’ program. The only issue is actually finding something anywhere close to that price point in B.C.’s hot housing market.

The program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home, which could be thousands of dollars in savings. But only homes which have a fair market value of $500,000 or less meet the requirements, although homes up to $525,000 are eligible for a partial exemption.

The average price for all residential properties in April was $1.4 million, according to the Real Estate Board of Greater Vancouver, which looks at sales in several cities including Burnaby, Vancouver, Squamish, and Maple Ridge.

The REBGV says the average condo price in April was $844,700, an increase of 16 per cent over the same time last year.

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While a quick glance at the listings show there are some condos available in Metro Vancouver under $500,000, many of them are small (less than 500 square feet) and are in older buildings.

Want a detached home? There are zero properties in that price range in Vancouver, although there is a modular home for sale in Langley selling for less than $400,000.

This double wide 1346 sq ft 2 bed/2 bath double wide modular home is for sale in Langley for $324,000. (Credit: Realtor.ca)

Tom Davidoff with the UBC Sauder School of Business says the $500,000 cap isn’t the problem with B.C.’s ongoing housing crisis, adding there are other ways to ensure first time home buyers can enter the market.

“Zoning and taxes are the way to improve affordability. Giving rewards to people by property? Not a great policy. I think the fact that it’s capped at $500,000, it’s actually pretty good,” he said.

“I think the way it’s structured now, it helps people at the lowest end of affordability the most. More affluent first time buyers don’t receive any benefit. And I think that’s okay. You know, if the government wants to help people who can’t afford a home, cash subsidies to people with low incomes living in expensive areas would probably be a more efficient use of taxpayer money.”

Davidoff says it’s important now more than ever for first time home buyers to be cautious.

“It’s a very interesting time to be in the market. Interest rates are rising. I think it is quite possible prices will start to fall. I think buyers should be careful and make sure they like the place they’re looking at before making a purchase decision and also make certain that they feel comfortable that they can afford to make payments, even if interest rates were to go up a bit or the economy were to struggle and they were to lose some income.”

With files from Charlene Ling