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BC 2018 Budget

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British Columbia-> Budget 2018

British Columbia 2018 Budget - February 20, 2018

Bill 2, the Budget Measures Implementation Act, 2018 was tabled on February 20, 2018.  All budget measures are subject to legislative approval.

Medical Service Plan (MSP) Premiums to be Eliminated Jan 1, 2020

The budget proposes to eliminate MSP premiums effective January 1, 2020.  The loss of revenue will be offset by a new Employer Health Tax, beginning January 1, 2019.

The Employer Health Tax will be:

     - 1.95% of total payroll, for business with a payroll of more than $1.5 million,
     - a reduced rate for business with a payroll between $500,000 and $1.5 million, and
     - zero for businesses with a payroll under $500,000.

Child Care

Child Care Fee Reduction Program

The budget proposes that, starting on April 1, 2018, parents with children in licensed care will be eligible for the following fee reductions if their child care provider opts into the program:

    - up to $350/month for group infant/toddler care
    - up to $200/month for family infant/toddler care
    - up to $100/month for group care for children aged 3-5
    - up to $60/month for family care for children aged 3-5

Affordable Child Care Benefit

The budget proposes to fund a child care benefit of up to $900 per month, per child, in child care cost relief by 2020, in addition to the above maximum of $350 for child care costs, resulting in maximum relief of up to $1,250 per month.  Families will be able to apply for this benefit beginning in September 2018.  Families with pre-tax incomes of $45,000 or less will receive the full benefit, up to the cost of care, while those who make up to $111,000 will receive a reduced amount, scaling according to income.

See Child Care BC on the BC 2018 Budget site for more information on child care costs, the child care benefit, and other child care related measures.

Personal Income Tax

BC Caregiver Tax Credit

The budget proposes to replace the Infirm Dependant and In-Home Care of Relative (caregiver) tax credits with a new BC Caregiver Tax Credit effective for 2018 and subsequent tax years.  It will follow the same rules as the Canada Caregiver Credit.

Education Tax Credit

The budget proposes to eliminate the Education Tax Credit for the 2019 and subsequent taxation years.  The federal education and textbook tax credits were eliminated effective for the 2017 and subsequent taxation years.

Property Taxes

Property Transfer Tax

The Budget proposes to levy an additional 2% on the portion of the fair market value of residential land and improvements greater than $3 million, effective February 21, 2018.  For example, if a property is sold for $4 million, the property transfer tax will be:

    - 1% on the first $200,000 ($2,000)
    - 2% on the portion of the fair market value greater than $200,000 and up to and including $2 million ($1.8 million x 2% = $36,000),
    - 3% on the portion of the fair market value greater than $2 million (($4 million - $2 million) = $60,000 x 3%), and
    - if the property is residential, a further 2% on the portion of the fair market value greater than $3 million ($4 million - $3 million) x 2% = $20,000.

This means that the portion of the fair market value over $3 million is subject to a total of 5% property transfer tax.  The above $4 million property would have property transfer tax totaling $118,000 (2,000 + 36,000 + 60,000 + 20,000).

Additional Property Transfer Tax for Foreign Entities & Taxable Trustees (Foreign Buyer Tax)

A foreign national, foreign corporation or taxable trustee must pay additional property transfer tax on a residential property transfer if the property is within specified areas of BC.

The tax rate is 15% of the fair market value for property transfers registered on or before February 20, 2018, if the property is within the Greater Vancouver Regional District (GVRD).

The tax rate is 20% of the fair market value for property transfers registered on or after February 21, 2018, if the property is within the GVRD, Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan, or Regional District of Nanaimo.

Additional School Tax for Residential Properties

The budget proposes to levy an additional school tax, starting in 2019, for high-valued residential properties in the province.  The additional tax rate is:

    - 0.2% on the residential portion assessed between $3 million and $4 million
    - 0.4% on the residential portion assessed over $4 million

Municipal Revitalization Provincial Property Tax Exemption

Municipal revitalization property tax exemptions for eligible new purpose-built rental housing will also apply to provincial property taxes starting in 2019.

Home Owner Grant

As previously announced, the threshold for the home owner grant phase-out is increased from $1.6  million to $1.65 million for the 2018 tax year.  For properties valued above the threshold, the grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold.

Sales & Tobacco Taxes

bulletEffective April 1, 2018, new or used passenger vehicles valued at $125,000 or more are subject to higher PST rates:
bulletValued at $125,000 to $149,999.99 - rate increased from 10% (12% for private sales or gifts) to 15%
bulletValued at $150,000 and above - rate increased from 10% (12% for private sales or gifts) to 20%
bulletEffective April 1, 2018, the tobacco tax rates are increased by 2.8 cents to 27.5 cents per cigarette, and by 12.8 cents to 37.5cents per gram for all tobacco other than cigars and cigarettes.
bulletThe sale or provision of accommodation through an online accommodation platform such as Airbnb.ca will be prohibited unless the vendor is register or not required to be registered, or unless the operator of the online accommodation platform is registered.

More provincial sales tax changes can be found on the BC government website.

Other Tax Measures

There are more tax changes in addition what we've detailed above, including the following proposed changes.  Links are to the BC government website.

bulletBook Publishing Tax Credit  - extended by 3 years to include amounts received before April 1, 2021
bulletBC Mining Flow-Through Share Tax Credit - extended by 1 year to December 31, 2018
bulletFarmers' Food Donation Corporate Tax Credit extended by 1 year to include gifts made before January 1, 2020.
bulletFarmers' Food Donation Personal Tax Credit extended by 1 year to include gifts made before January 1, 2020.
bulletFilm and Television Tax Credits - expanded to include a new scriptwriting tax credit
bulletInteractive Digital Media Tax Credit - extended by 5 years to before September 1, 2023.

For more information see the Budget Tax Changes document.

See Budget 2018 on the Ministry of Finance website for complete budget details.

Revised: May 07, 2018

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