2024 British Columbia provincial budget tax highlights
On Feb. 22, 2024, the British Columbia government released its 2024 budget. The following are highlights of the key tax measures.
Personal tax measures
No personal income tax rate changes were announced in this year’s budget. The current personal combined income tax rates for 2024 are outlined below:
|
Personal (combined) federal and B.C. top marginal tax rates |
|
|
|
Rate |
|
Interest/regular income |
53.50% |
|
Capital gains |
26.75% |
|
Eligible dividends |
36.54% |
|
Non-eligible dividends |
48.89% |
B.C. family benefit bonus introduced
Effective July 1, 2024, the B.C. family benefit bonus will be introduced and delivered alongside the B.C. family benefit. This measure will enhance the B.C. family benefit for the 2024/2025 benefit year and will result in a 25 per cent increase in both the annual benefit amount and income thresholds used to determine eligibility for the benefit.
This increase will be paid out beginning in July 2024. The annual benefit amounts and adjusted family net income threshold will return to previous levels at the end of the 12‑month benefit period.
Climate action tax credit increased
Effective July 1, 2024, the maximum annual climate action tax credit payment is increased. Income thresholds, at which point the credit begins to be phased out, will also be increased. The increases are outlined below:
|
|
Effective July 1, 2023 |
Effective July 1, 2024 |
|
Adult |
$447.00 |
$504.00 |
|
Spouse / Common law partner |
$223.50 |
$252.00 |
|
Child |
$111.50 |
$126.00 |
Tax targeting home flipping activity introduced
The budget will introduce legislation to impose a new tax on proceeds from the sale of residential real estate in B.C. The tax will apply to income from the sale of property that was held for less than two years. The tax rate will be 20 per cent for properties sold within the first year of purchase and will decline to zero over the second year. This tax will be paid in addition to any federal or provincial income taxes incurred on the sale of the property.
The tax will apply to properties sold on or after Jan. 1, 2025, and the tax can apply even if the property was purchased before the effective date. Properties sold after Jan. 1, 2025 will be subject to tax if purchased within two years of the sale.
Exemptions will be available for certain life circumstances that might motivate the sale of the property within two years, such as separation, divorce, death, disability or illness, relocation for work, involuntary job loss, change in household membership, personal safety or insolvency.
An additional exemption will exist for individuals, who can exclude $20,000 when calculating their taxable income for the year.
First time home buyers’ exemption threshold increased
Effective April 1, 2024, the threshold is increased from a fair market value of $500,000 to $835,000, with the first $500,000 exempt from property transfer tax. The phase out range is $25,000 above the threshold with the exemption being eliminated at $860,000.
Newly built home exemption threshold increased
Effective April 1, 2024, the fair market value threshold is increased from $750,000 to $1,100,000. The phase out range is $50,000 above the threshold with the exemption being eliminated at $1,150,000.
Exemption for new purpose‑built rental buildings enhanced
Effective for transactions occurring between Jan. 1, 2025, and Dec. 31, 2030, purchases of new qualifying purpose‑built rental buildings will be exempt from the general property transfer tax.
Definition of registered occupier amended
Effective Jan. 1, 2024, a person possessing residential property under a lease registered in the Land Title and Survey Authority of British Columbia will be treated as a registered occupier of the property for speculation and vacancy tax purposes and will be responsible for the tax.
Corporate tax measures
No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2024 are outlined below:
|
|
Small business corporation |
General corporation |
||
|
|
Rate |
Threshold |
Non‑M&P |
M&P |
|
B.C. |
2.0% |
$500,000 |
12.0% |
12.0% |
|
Combined federal and B.C. |
11.0% |
$500,000 |
27.0% |
27.0% |
Employer Health Tax threshold
Effective Jan. 1, 2024, the Employer Health Tax exemption threshold is increased from $500,000 to $1 million. The notch rate for remuneration above the new exemption threshold of $1 million and below the full rate threshold of $1.5 million is increased from 2.925 per cent to 5.850 per cent.
Tax credit measures
Animation productions excluded from regional and distant location tax credits
Effective June 1, 2024, the regional and distant location tax credits will be amended to exclude animation production from eligibility. The change applies from animation productions under either the Film Incentive BC tax credit or the production services tax credit with principal photography beginning on or after June 1, 2024.
Animation productions will remain eligible for other tax credits available under the program.
Training tax credits extended
The training tax credit for employers will be extended for three years to the end of 2027, and the training tax credit for individuals will be extended for one year to the end of 2025.
Oil and gas exploration expense excluded from the mining exploration tax credit
Effective Feb. 23, 2024, oil and gas exploration expenditures will no longer qualify for the mining exploration tax credit. This amendment follows the federal government’s changes to the mining flow‑through shares tax credit regime to exclude fossil fuel exploration expenditures from eligibility.
Shipbuilding and ship repair industry tax credit extended
The existing shipbuilding and ship repair industry tax credit is extended for two years to the end of 2026.
Other tax measures
Property taxation on Nisga’a Lands and treaty lands
Effective for the 2025 taxation year, the province will no longer require property taxation to apply on Nisga’a Lands or the treaty lands of a Modern Treaty Nation. Amendments to the governing legislation will enable Modern Treaty Nations to self‑determine property taxation on their respective treaty lands.
Amendments to Provincial Sales Tax Act
Effective July 1, 2024, to reduce the availability of PST refunds where a person acts as though they are the end purchaser of goods, but are acquiring goods for export and resale outside B.C.
Effective April 1, 2013, to clarify the definition of software for the purpose of the PST.
Effective on Royal Assent, to enable a PST refund to a person who purchases goods from a seller who did not collect PST, when the purchaser self‑assesses PST then returns the goods for a refund.
Effective Feb. 23, 2024, amending the Provincial Sales Tax Exemption and Refund Regulation to clarify that projects that use sunlight, wind, tides, air or water to manufacture clean energy qualify for the production machinery and equipment exemption and clarify the rules for when services are provided with taxable leased goods.
Next steps
Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.
Meet the Author
Sean Grant-Young
Information is current to February 27, 2024. The information contained in this release is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.