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BC 2016 Budget

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British Columbia-> Budget 2016

British Columbia 2016 Budget - February 16, 2016

Medical Service Plan (MSP) Premiums

The maximum monthly premium rate for a single adult will increase by 4% for 2017, but starting in 2017, children will be exempt from MSP premiums.  The rates will be based on the number of adults in the household, and premium assistance will be expanded to many more people based on increased thresholds.  A couple will now pay 2x the single person rate, so the maximum premium for a couple will increase by 14.7% in 2017.

Income Tax

Farmers' Food Donation Tax Credit

This new tax credit, worth 25% of fair market value of the qualifying agricultural product donated, will be available for the 2016 to 2018 taxation years, and is effective February 17, 2016.  It is available to individuals and corporations that carry on the business of farming and donate a qualifying agricultural product to a registered charity that provides food to those in need or helps to operate a school meal program.  The credit must be claimed in the same year that a charitable donation tax credit or deduction is claimed for the donation.  The tax credit will be reviewed at the end of the 3 year period.

Home Renovation Tax Credit for Seniors and Persons With Disabilities

Effective February 17, 2016, this tax credit will be expanded to include persons with disabilities and to family members lliving with those individuals.

BC Tax Reduction

An increase is proposed to the non-refundable BC Tax Reduction, increasing the 2016 net income threshold to $19,400 from $19,171, and increasing the reduction factor to 3.56% from 3.5% for the 2016 and subsequent tax years.  The threshold is indexed in subsequent taxation years.

BC Mining Flow-Through Share Tax Credit

This tax credit is extended to the end of 2016, as previously announced on January 25, 2016.

BC Mining Exploration Tax Credit - Personal and Corporate

As previously announced on January 25, 2016, this tax credit is extended for an additional 3 years to the end of 2019.  It is available to both individuals and corporations that undertake mining exploration in BC.  The credit is 20% of eligible BC mining exploration expenditures, or 30% if exploration is in the mountain-pine-beetle-affected area.

Taxation of Trusts and Estates

The recent federal changes to the taxation of trusts and estates will be paralleled.  For tax years ending after December 31, 2015, graduated personal income tax rates will only apply to trusts that are "graduated rate estates" or "qualified disability trusts".  All other trusts and estates in BC will pay the top marginal personal income tax rate of 14.7%.

Provincial Sales Tax

Exemptions Expanded for Qualifying Farmers

Effective February 17, 2016, telescopic handlers, skid steers and polycarbonate greenhouse panels are added to the list of exemptions for qualifying farmers.

Property Transfer Tax

Property Transfer Tax Act

Effective February 17, 2016, newly constructed homes valued up to $750,000 and used as a principal residence will be exempt from property transfer tax.  There will be a partial exemption for homes up to $800,000.  The buyer does not have to be a first-time owner of residential property.

Effective February 17, 2016, the rate of property transfer tax increases to 3% from 2% on the portion of a property's fair market value (FMV) above $2 million.  The rates of 1% on the first $200,000 of FMV and 2% on the FMV between $200,000 and $2 million remain unchanged.

Effective in spring 2016, disclosure will be required of citizenship, on registration of a taxable transaction, for individuals who are not Canadian citizens or permanent residents of Canada.  Corporations will be required to discloe the citizenship of any director who is not a Canadian citizen or permanent resident of Canada.  Disclosure of citizenship information will also be required for settlors and beneficiaries of bare trusts.

Home Owner Grant

Home Owner Grant Act

As previously announced on January 5, 2016, the home owner grant threshold is increased from $1.1 million to $1.2 million for the 2016 tax year.  The grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold.

All of the tax changes in the 2016 Budget are subject to legislative approval.

The above does not include all provisions of the 2016 Budget.  For further information see the following on the BC Government website:

bulletBC 2016 Budget
bulletBudget Tax Changes
bulletBudget and Fiscal Plan (pdf) - tax measures start on page 50

Revised: January 22, 2017

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