On February 22, 2024, Katrine Conroy, British Columbia’s Finance Minister, announced the 2024 British Columbia Budget. The Budget aims to help British Columbia’s residents deal with everyday costs, find affordable housing, and gain improved access to government services. No changes were made to the existing provincial personal and corporate tax rates.
Crowe MacKay’s tax experts summarize British Columbia’s new tax measures below. If you require assistance, connect with us in Alberta, British Columbia, Northwest Territories, or the Yukon.
Housing Tax Measures
Tax Targeting Home Flipping Activity
Legislation will be proposed in early Spring of 2024 to impose a new tax on proceeds from the sale of residential real estate in British Columbia. The tax will apply to income from the sale of property that was held for less than two years, at a rate of 20 per cent for properties sold within 365 days of purchase and declining to zero when sold between 366 and 730 days of purchase. The tax will apply to income from the sale of properties with a housing unit and properties zoned for residential use and to income from the assignment of contracts to purchase such properties. The tax will not apply to land or portions of land used for non-residential purposes.
The tax will be effective January 1, 2025, applying to properties sold on or after that date. Properties sold after the effective date will be subject to the tax if purchased within two years of the sale. The tax will apply even if the property was purchased before the effective date and to all sellers, not just British Columbia residents.
Exemptions will be available for certain life circumstances that might motivate the sale of a property within two years, such as separation or divorce, death, disability or illness, relocation for work, involuntary job loss, change in household membership, personal safety, or insolvency. In addition to these exemptions, individuals selling their primary residence within two years of purchase can exclude a maximum of $20,000 when calculating their taxable income.
This tax will be in addition to any federal or provincial income taxes incurred from the sale of property.
Business Tax Measures
Employer Health Tax
Effective January 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.
Animation Productions Excluded from the Regional and Distant Location Tax Credits
Effective June 1, 2024, the regional and distant location tax credits are amended to exclude animation productions from eligibility. The change applies for 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 the basic tax credits under the Film Incentive BC and the production services tax credits, as well as the digital animation, visual effects, and post-production services tax credits.
Training Tax Credits
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 Expenses Excluded from the Mining Exploration Tax Credit
Effective February 23, 2024, oil and gas exploration expenditures will no longer qualify for the mining exploration tax credit. This amendment follows similar federal government changes to the mining flow-through share tax credit regime.
Shipbuilding and Ship Repair Industry Tax Credit Extended
The shipbuilding and ship repair industry tax credit is extended for two years to the end of 2026.
Personal Tax Measures
BC Family Benefit Bonus
Effective July 1, 2024, the BC Family Benefit Bonus will be delivered alongside the BC Family Benefit. This measure will enhance the BC Family Benefit, resulting in a 25 per cent increase to both the annual benefit amounts and the income thresholds used to determine eligibility for the BC Family Benefit. The bonus is a temporary increase to the BC Family Benefit for the 2024/25 benefit year, with payments beginning in July 2024. The annual benefit amounts and adjusted family net income will return to the usual levels following the end of the 12-month benefit period.
Climate Action Tax Credit
Effective July 1, 2024, the maximum annual climate action tax credit payment is increased from $447 to $504 for an adult, from $223.50 to $252 for a spouse or common-law partner, and from $111.50 to $126 per child. Single-parent families will continue to receive the spouse or common-law partner amount for the first child in the family. Income thresholds will also be increased.
Property Transfer Tax
First-Time Home Buyers’ Exemption Threshold
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 complete elimination of the exemption at $860,000. Qualifying properties with a fair market value under $500,000 will be completely exempt from property transfer tax.
Newly Built Home Exemption Threshold
Effective April 1, 2024, the fair market value threshold is increased from $750,000 to $1,100,000, and the phase-out range is $50,000 above the threshold, with the complete elimination of the exemption at $1,150,000 for qualifying newly built homes.
Exemption for New Purpose‑Built Rental Buildings Enhanced
Effective for transactions that occur between January 1, 2025, and December 31, 2030, purchases of new qualifying purpose-built rental buildings will be exempt from the general property transfer tax. Purpose-built rental buildings are those that are non-stratified and held as rentals on a monthly basis or longer for at least 10 years. The residential portion of the building must be entirely used for rental purposes and have at least four apartments.
Speculation and Vacancy Tax Act
Definition of Registered Occupier
Effective January 1, 2024, a person who possesses a residential property under a lease registered in the Land Title and Survey Authority of British Columbia will be treated as the registered occupier of the property for the purpose of the speculation and vacancy tax and be responsible for the tax. Registered leaseholders who are not already required to declare in 2024 will declare for the first time in 2025, based on the use of the property in 2024.
Other Technical Measures
Other technical changes were included in Budget 2024 to clarify amendments that were previously announced.
For more information on the 2024 British Columbia Budget, please visit the Government of British Columbia’s website.
This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. This publication is not a substitute for obtaining personalized advice.
If you are looking for Tax Services, Crowe MacKay provides personalized support. Our tax professionals will help you maximize tax-planning opportunities and ensure the minimum amount required by law is paid.
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