Monday, October 30, 2023

Are you a homeowner in BC? The province is rolling out a fantastic incentive for homeowners: a chance to secure up to $40,000 to help you create a secondary suite in your property. Below are the details you need to know

Who Can Take Advantage of This Offer?

Citizenship: You must be either a Canadian citizen or a permanent resident.

Primary Residence: The home you’re considering for the suite should be your main place of residence. Also, your combined household income shouldn’t exceed $209,420.

Property Value & Equity: The property’s worth shouldn’t surpass $2.125 million. Additionally, owners need sufficient home equity, as this will be used as security for the loan.

What Suites Qualify for This Program?

Definition: Secondary suites are self-contained spaces with a kitchen, bathroom, and sleeping area. Not just spaces within the main home, standalone units like laneway homes and garden suites are also eligible.

Usage: The loan isn’t for renovating or enhancing existing rental units.

Building Permits: Owners should have secured municipal building permits for the suite construction post-April 1, 2023.
Construction Cost: The cost for building the suite should be a minimum of $20,000.

Construction Cost: The cost for building the suite should be a minimum of $20,000.

Keen to Apply? Mark your calendar! The application process starts in April 2024.

How Much Can You Secure? Homeowners who fit the bill can get forgivable loans covering 50% of their construction expenses, capping at $40,000. The best part? Once your suite is up, that’s when you receive the loan. And if you stick to the program’s terms, the loan is wiped clear over five years.

What’s Covered? From architectural and design fees to electrical jobs, fixtures, appliances, permit fees, and even the labor costs of your contractor – it’s all included.

Conditions for Loan Forgiveness

Rent out your secondary suite below market prices for a minimum of five years. The rates are determined by B.C. Housing. For instance, in Vancouver, as of 2023, you can set your rent at $1,500 for a studio or one-bedroom, $1,894 for two bedrooms, and $2,200 for a three-bedroom suite.

What’s Next After the Five-Year Mark?

Once the loan is fully settled, there’s no ceiling on the rent for new tenants. However, for ongoing tenants, you’re bound to the maximum rent increment set annually by the provincial government.

But What If Things Don’t Go as Planned?

If for some reason you can’t adhere to the program’s conditions within the five-year span (like selling the home, changing your primary residence, or adjusting the rents), you’ll need to pay back the outstanding loan amount plus any accruing interest.

This is a golden opportunity for BC homeowners to enhance their property’s value and earn a rental income. If you’re contemplating a secondary suite, now’s the time to act. For any assistance or inquiries about the local real estate market, don’t hesitate to contact us.

Link to Program: Secondary Suite Incentive Program