2024 B.C. Budget: Tax highlights
On February 22, 2024, the British Columbia Minister of Finance tabled the province’s 2024 budget.
The 2024 budget contains a number of notable tax measures, including the following:
Provincial Anti-Flipping Tax
- A “home flipping” tax on income derived from the sale of residential properties sold within two years of purchase. The proposed rate of tax is 20% for properties sold within 365 days of purchase, with such rate declining (to zero) on a straight-line basis for residential properties sold between 366 and 730 days after purchase. Legislation to enact the tax is expected in spring 2024 for properties sold on or after January 1, 2025.
Employer Health Tax
- The Employer Health Tax exemption threshold will be increased from $500,000 to $1,000,000 under the Employer Health Tax Act (British Columbia). Similarly, the “notch rate” will be increased from 2.925% to 5.85% for remuneration above $1,000,000 and below $1,500,000.
Income Tax
- The provincial general anti-avoidance rule (GAAR) in the Income Tax Act (British Columbia) will be amended to apply to abusive transactions that may result in future tax benefits, in conformity with recent changes to the GAAR in the federal Income Tax Act (Canada). The provincial GAAR changes will be effective as of December 15, 2022 in respect of transactions occurring on or after April 7, 2022.
- The Income Tax Act (British Columbia) will be amended to vary and extend various tax credits, including an amendment to exclude oil and gas exploration expenditures from the mining exploration tax credit.
Property Transfer Tax
- The first time home buyers’ exemption threshold under the Property Transfer Tax Act (British Columbia) will be increased from $500,000 to $835,000, with the first $500,000 of fair market value being exempt from property transfer tax. The exemption will be phased out for properties with a value over $835,000 and eliminated entirely for properties valued at $860,000.
- The newly built home exemption threshold will be increased from $750,000 to $1,100,000, subject to a phase out for properties valued at over $1,100,000. The exemption will be eliminated completely for properties valued at over $1,150,000.
- Certain new purpose-built rental buildings will be exempt from general property transfer tax for transactions occurring between January 1, 2025 and December 31, 2030.
Speculation and Vacancy Tax
- An amendment to the definition of “registered occupier” under the Speculation and Vacancy Tax Act (British Columbia) will include a person who possesses a residential property under a lease registered in the Land Title and Survey Authority of British Columbia. The government states this will shift the responsibility for the tax from the fee simple owner to the registered leaseholder (who has control over how the property is used).
Modern Treaty Nation Property Taxation
- As of the 2025 taxation year the province will no longer impose property tax on Nisga’a Lands and Treaty Lands of Modern Treaty Nations.
Provincial Sales Tax
- There are a number of technical amendments to the Provincial Sales Tax Act (British Columbia) concerning the definition of “software”, the availability of Provincial Sales Tax (“PST”) refunds for good acquired for export and resale outside Canada, and the availability of PST refunds where a person has self-assessed PST on goods but later returns the goods for a refund.
A link to Bill 3 – 2024 Budget Measures Implementation Act, 2024, which contains draft legislation to implement certain of the above measures, can be found here.