On March 4, 2025, the BC government released its 2025 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 2025 are outlined below:
Personal (combined) federal and BC top marginal tax rates | |
| Rate | |
| Interest/regular income | 53.50% |
| Capital gains | 26.75% |
| Eligible dividends | 36.54% |
| Non-eligible dividends | 48.89% |
Corporate tax measures
No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2025 are outlined below:
Small business corporations | General corporations | |||
| Rate | Threshold | Non‑M&P | M&P | |
| BC | 2.0% | $500,000 | 12.0% | 12.0% |
| Combined federal and BC | 11.0% | $500,000 | 27.0% | 27.0% |
New speculation and vacancy tax rates
Effective Jan. 1, 2026, the rate for Canadian citizens and permanent residents who are not untaxed worldwide earners, as well as others currently taxable at 0.5 per cent under the Speculation and Vacancy Tax Act (the Act), will increase from 0.5 to one per cent. The rate for foreign owners and untaxed worldwide earners, as well as others specified under the Act currently taxed at two per cent, will increase from two to three per cent.
Effective retroactively to Jan. 1, 2024, the Predator Ridge resort in the City of Vernon is excluded from the specified area for the speculation and vacancy tax.
Tax credit measures
Basic credits for Film Incentive BC and the production services tax credit increase
Effective Jan. 1, 2025, the basic Film Incentive BC tax credit is increased from 35 per cent to 40 per cent, and the basic production services tax credit is increased from 28 per cent to 36 per cent.
Major production tax credit
Effective Jan. 1, 2025, a new tax credit is available to production services tax credit claimants with BC production costs greater than $200 million. The credit will be equal to two per cent of a corporation’s accredited qualified BC labour expenditures in respect of the major production. The credit is available upon completion of the major production.
Regional and distant location tax credits amended for animation productions
Effective Jan. 1, 2025, the regional and distant location tax credits are amended to allow animation productions with a brick‑and‑mortar presence in a regional or distant location to claim the supplemental credits. The change applies for animation productions under either the Film Incentive BC tax credit or the production services tax credit with principal photography starting on or after Jan. 1, 2025.
Clean buildings tax credit extension
The deadline for qualifying expenditures for the clean buildings tax credit is extended by one year to March 31, 2026.
BC family benefit amended for grieving families
Effective Jan. 1, 2025, the BC family benefit is amended to continue payments for six months following a child’s death. This amendment harmonizes with the federal amendment to the Canada Child Benefit.
Interactive digital media tax credit increased and made permanent
Effective Sept. 1, 2025, the interactive digital media tax credit will increase to 25 per cent for eligible salaries and wages paid in BC on or after Sept. 1, 2025. The program’s sunset date will also be removed and the program will become permanent.
Small business venture capital tax credit
Effective for 2025 and subsequent taxation years, the annual credit limit an individual can claim for investments made on or after March 4, 2025, is increased from $120,000 to $300,000.
Training tax credit for apprentices extended and amended
The training tax credit for individuals will be extended for three years, to the end of 2028. The program is also amended effective April 1, 2025, so that those eligible for the enhanced credit for First Nations individuals or persons with a disability continue to receive the enhanced credit after the federal Apprenticeship Incentive Grant expires on March 31, 2025.
Other tax measures
Exemption for First Nation property ownership introduced
Effective May 21, 2024, a First Nation that is a band under the federal Indian Act is exempt from property transfer tax when transferring legal ownership of a property to the First Nation if the property is already beneficially owned by the First Nation. The exemption only applies to land beneficially owned by the First Nation prior to May 21, 2024.
Exemption for eligible First Nations’ properties used for certain purposes
Effective for the 2026 taxation year, the province will exempt First Nations’ interest in eligible properties from annual provincial school property tax. This exemption will apply to eligible properties assessed as having no present use or are used for cultural or community purposes.
New Modern Treaty First Nations’ property tax exemption in treaty designated foreshore areas
Effective for the 2026 taxation year, lands and improvements in rural areas within a treaty designated foreshore area owned or held by the Modern Treaty First Nation or its public institutions will be exempt from property tax.
Exemption for eligible First Nations’ properties used for certain purposes
Effective for the 2026 taxation year, the province will exempt First Nations’ interest in eligible properties from annual rural property tax. This exemption will apply to eligible properties assessed as having no present use or are used for cultural or community purposes, and will mirror the new provincial school tax exemption for eligible First Nations’ properties.
Exemption for used zero‑emission vehicles eliminated
Effective May 1, 2025, used zero‑emission vehicles will be subject to provincial sales tax. The exemption for used zero‑emission vehicles introduced in Budget 2022 was originally scheduled to end in 2027.
Small business venture capital program budget temporarily increased
Effective for the 2025 to 2027 calendar years, the total annual amount of tax credits that may be approved under the small business venture capital program is temporarily increased by $15 million to $53.5 million.
Carbon Tax Act
Budget 2023 implemented annual carbon tax increases of $15/tonne until the carbon tax reaches $170/tonne in 2030, as per federal carbon pricing requirements. The BC government remains committed to removing the consumer carbon tax should the federal government remove the requirement for carbon pricing across Canada (also known as the federal backstop). Budget 2025 ensures revenue from the increase to the carbon tax effective April 1, 2025 is more than fully allocated to the climate action tax credit.
New mine allowance extended
The new mine allowance will be extended for five years, to the end of 2030, by regulation.
Next steps
Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.
Related content
