Vicky Turner

What a gorgeous, sunny day we have in Victoria!

The BC Government just made it easier to purchase for “First Time Buyers” yesterday (subject to approval by the legislature)…bonus is a one-time refundable income tax credit worth up to $10,000.

Among the qualifications are:
You purchase or build an eligible new home located in BC
You, your spouse or common law partner have never owned a primary residence (anywhere…)
You have moved to BC before December 31, 2012
You are eligible for the HST BC New Housing Rebate (+ you intend to live in home as your primary residence)
How much is the bonus? It is equal to 5% of the purchase price of the home (or in the case of owner-built homes, 5% of the land and construction costs subject to HST) to a maximum of $10,000.

The bonus is reduced to “0″ at a single income of $200,000. or more. The bonus is reduced to “0″ for a combined income of over $ 250,000. and is reduced based on your net combined income – line 23 of your tax return.

There are sliding scales calculated on home prices but for example a home price of $200,000. or more, it appears as though a family with a combined income of $150,000. or less will receive the entire credit of $10,000. This programme is a boost to home builders who have been hurt by the HST and to new home buyers who are finding it increasingly difficult to enter the housing market.

The programme will be in effect from February 21, 2012 and March 31, 2013. HST is supposed to be repealed on April 1, 2013.

For more information please call me or your mortgage broker. There is also a government website your there: (isn’t there always?) ITBTaxQuestions@gov.bc.ca.

Ciao, Vicky

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Now that there are new, lower mortgage rates being offered in Canada have you ever wondered how the “amortization rate” effects the way your mortgage is paid off?  The length of time the amortization is based on can make a huge difference in the long run.

This article assumes that you are making bi-weekly payments (always a faster track to paying down your loan).

Borrow $400,000. at 5% interest rate:

25 year Amortization = $1,068.87 payments every two weeks and a total interest cost at the end of that mortgage of $297,092.55.

30 year Amortization = $980.81 payments every two weeks and a total interest cost of $367,588.30 at the end of the mortgage.

Scarey isn’t it?  Almost $70,000 more for the 2nd scenario…over the life of the mortgage.  Wouldn’t you rather pay under $100 more each payment and save in the end?  Good question……speak with your mortgage/financial advisor and get serious advice on this.  Paying down debt faster only makes good sense if at all possible.