How Much Down Payment Do You Need in BC?

In British Columbia, the minimum down payment depends on the purchase price. For homes up to $500,000 the minimum is 5%. For the portion between $500,000 and $999,999 you need 10%. Homes priced at $1,000,000 or more require at least 20% down and are not eligible for CMHC mortgage insurance.

The BC average home price is well above $800,000 in cities like Vancouver and Victoria, which means most buyers need a substantial down payment — often between 10% and 20% — to close. Saving inside a First Home Savings Account (FHSA) is one of the most tax-efficient ways to accumulate that capital.

First Home Savings Account (FHSA)

The FHSA is a registered account introduced in 2023 that lets first-time buyers contribute up to $8,000 per year (lifetime cap $40,000) and deduct contributions from taxable income — similar to an RRSP. Qualifying withdrawals used to buy a qualifying home are tax-free, like a TFSA.

To be eligible you must be a Canadian resident, at least 18 years old, and must not have lived in a home you or your spouse/common-law partner owned as your principal place of residence in the current calendar year or in any of the preceding four calendar years.

You can hold the FHSA for up to 15 years. If you do not use it for a home purchase, funds transfer to your RRSP tax-free.

BC Property Transfer Tax (PTT) Exemption for First-Time Buyers

British Columbia charges a Property Transfer Tax on all home purchases. First-time buyers who are Canadian citizens or permanent residents may be exempt from the PTT on homes purchased for $835,000 or less (as of 2024). A partial exemption applies up to $860,000.

To qualify you must: have never owned a principal residence anywhere in the world; be a Canadian citizen or permanent resident; intend to occupy the home as your principal residence within 92 days of registration; and the home must be under 0.5 hectares.

The full PTT on a $750,000 purchase would otherwise be $13,000 — so this exemption is significant and worth confirming with your conveyancing lawyer before you close.

The First Home Buyer Incentive (FTHBI)

The federal First Home Buyer Incentive is a shared-equity mortgage where the government provides 5% (or 10% for new construction) toward your purchase in exchange for a proportional share of your home's future value. The program reduces your monthly mortgage payment but the government participates in any appreciation or depreciation.

Income limits and qualifying thresholds restrict the program to buyers with household incomes below $120,000 and purchase prices under roughly $500,000 in most markets — making it largely inaccessible in Metro Vancouver and Greater Victoria. Check the CMHC website for the current calculator.

Getting Mortgage Pre-Approval in BC

Start with a mortgage pre-approval before viewing homes. Lenders assess your income, credit score, debts, and down payment source. Since 2016, all insured mortgages must pass the stress test — qualifying at 2 percentage points above your contract rate or 5.25%, whichever is higher.

Gather two years of Notice of Assessment (NOA) or T4s, three months of bank statements showing your down payment, current pay stubs, and IDs. Credit unions and alternative lenders are subject to different (provincial) stress-test rules, which can increase qualifying power for self-employed buyers.

Step-by-Step Home Buying Process in BC

1. Assess your finances and open an FHSA if eligible. 2. Get mortgage pre-approval. 3. Hire a buyer's real estate agent (buyer agents are typically compensated through the listing). 4. Search MLS listings on BCHomez and attend showings. 5. Submit an offer; your agent will negotiate price, subject conditions, and completion date. 6. During the subject period, complete home inspection, secure financing, and review strata documents (for condos). 7. Remove subjects and pay your deposit into trust. 8. Hire a conveyancing lawyer to handle title transfer. 9. Complete on possession date and collect the keys.

Subject-free offers have become common in hot markets. Never waive a home inspection on a detached house without understanding the risk — older Vancouver homes especially can harbour moisture issues, knob-and-tube wiring, or asbestos that cost tens of thousands to remediate.

Other Closing Costs to Budget For

Beyond your down payment, budget for: Property Transfer Tax (or confirm your exemption), legal/notary fees ($1,200–$2,000), home inspection ($400–$600), title insurance (~$300), moving costs, and property tax adjustments at closing. If buying a strata unit, you will also prepay two months of strata fees into the contingency fund.

Total closing costs typically run 1.5%–4% of the purchase price on top of your down payment.