First time home buyers get an exemption from paying the property transfer tax and this "tax break" can save first time home buyers thousands of dollars. However, first time home buyers need to carefully ensure that they qualify for this tax savings. Persons claiming a FTHB credit are regularly audited by the (PTT) property transfer tax office. The Criteria to Qualify are as follows. Purchaser must be a Canadian Citizen, or a permanent resident as determined by Immigration Canada. Must have lived in British Columbia for 12 consecutive months immediately before the date you register the property, or you have filed 2 income tax returns as a British Columbia resident during the 6 years before the date you register the property. Must never have owned an interest in land anywhere in the world at anytime, and have never received a first time home buyers’ exemption or refund. The Property you purchase must also qualify as follows. The price must be less than $425,000. The land must be less than 0.5 hectares (1.24 acres), and the property will only be used as your principal residence. Importantly, if you sell the property or acquire a new principal residence within 12 months of purchase, you will lose the exemption and the Province will demand for the tax to be paid.

More information here:

http://www.sbr.gov.bc.ca/documents_library/brochures/firsttimehomebuyer.pdf

Article by Peter D. Borszcz of Pihl Law Corporation

TORONTO, May 20, 2011 – An overwhelming majority of Canadians who have either purchased or who intend to buy recreational property in the next 24 months believe that buying a vacation home is a good long-term investment, according to a nationwide survey of Canadian attitudes towards recreational property ownership commissioned by Royal LePage Real Estate Services and run on the Angus Reid Forum.

Overall, the survey found that 89 per cent of current owners and prospective buyers agree that recreational properties are a good long-term investment. Broken down by region, this included 92 per cent of respondents from Alberta, 91 per cent of Ontarians, 87 per cent of BC residents and 81 per cent of people surveyed in Quebec.

When respondents were asked to compare recreational properties to the stock market in terms of providing a larger financial return on investment, 50 per cent said recreational properties provided a larger return. Only 29 per cent replied investing in the stock market, while 21 per cent were undecided.

“Canadians’ confidence in recreational property values is mirroring what we have been seeing in Canada’s urban centres,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “This spring, the horror stories from some fundamentally flawed international housing markets that had dampened demand for cottage-type living during the recession era, are being shrugged off.  Canada’s traditionally buoyant recreational property market appears to have found its groove once more.”

Interestingly, a majority of respondents (57 per cent) said that the expectation of interest rates rising will not affect their desire to purchase a recreational property. Among this group, 55 per cent of respondents aged 35-54 (and 70 per cent of respondents aged 55+) said an expected rise in interest rates would not affect their desire to purchase a recreational property.

When it came to financial and lifestyle sacrifices to purchase a recreational property, more than a third polled (35 per cent) responded that they were most likely to reduce personal spending throughout the year. The two least favoured strategies were to drive as far as necessary and to make the recreational property a primary residence, both 13 per cent.

“Relentlessly wet and miserable weather has delayed the 2011 buying season in some regions of the country.  But while weather delays intent, it doesn’t change it. The Royal LePage Recreational Property Report shows that the steadily improving economy has stoked consumer confidence which should impact demand positively. We expect to see considerable activity in the coming months – especially in higher-end and luxury segments,” added Soper.

More than half (51 per cent) of those polled said they are, or will be, renting out their property to offset their mortgage and other associated costs. However, many of those willing to rent plan to be selective (32 per cent) and only rent their recreational property to someone who have been referred by someone they knew.

“We are seeing more buyers purchase properties with the intent to offer them as rentals. This cost-offset strategy may allow younger families to acquire a cottage earlier in their lives than they would otherwise, and others may be able to buy in a region that would have been out of their reach, price-wise. The purchase motivation for most is not financial planning. It remains lifestyle driven – satisfying the needs and wants of their family,” said Soper. “In fact, 92 per cent of those we polled agreed that a recreational property is a great way to bring family together.”

The survey was commissioned as part of the 2011 Royal LePage Recreational Property Report, an annual market analysis of recreational property prices, trends and activity in selected leisure markets across the country.