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BC 2012 Budget

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British Columbia-> Budget 2012

British Columbia 2012 Budget - February 21, 2012

Medical Service Plan (MSP) Premiums

Maximum monthly premium rates will increase by approximately 4% for 2013.  Premium assistance will also be enhanced to ensure those receiving assistance will not be affected by the increase.  Details will be available later in 2012.  We have published a table of the 2013 MSP rates, which reflects no change in the rates for those receiving assistance.

HST Rebate Threshold for New Home Purchases

Effective April 1, 2012, the HST rebate threshold for home purchases of new residential housing used as a primary residence increases to $850,000, allowing a provincial HST rebate of up to $42,500.  This rebate is handled by Canada Revenue Agency.  See our article on the GST/HST new housing rebate.

Grant for New Secondary or Recreational Residences

A provincial grant of up to $42,500 will apply to purchases of new secondary vacation or recreational properties priced up to $850,000, and built outside the GVRD and Capital Regional District.  Effective April 1, 2012, purchasers may receive a grant equal to 71.43% of the provincial component of the HST paid, up to a maximum of $42,500.  To qualify, the HST must be payable and paid on or after April 1, 2012 and before April 1, 2013.  Your application must be received by the BC Ministry of Finance within 6 months of the payment of the HST, and prior to October 1, 2013.

Grant application forms will be available on the Ministry of Finance website.

Canada Revenue Agency (CRA) has published Notice272 Harmonized Sales Tax - Proposed Enhancements to the BC New Housing Rebates and New Residential Rental Property Rebates.

Personal tax

First-Time New Home Buyers' Bonus

Effective February 21, 2012 to March 31, 2013, the temporary $10,000 BC First-Time New Home Buyers' Bonus will give a one-time refundable income tax credit for first-time buyers purchasing newly-built homes.

Home Renovation Tax Credit for Seniors

The new Seniors Home Renovation Tax Credit, worth up to $1,000 per year, will be available to seniors, or family members sharing their home, whether they rent or own.  It will help to reduce the costs of structural changes, such as hand rails, ramps or walk-in bathtubs.

Children's Fitness Tax Credit

The children's fitness tax credit will allow families to claim up to $500 of eligible expenses per child per year.  Eligible expenditures are those that qualify for the federal Children's Fitness Credit.

Children's Arts Tax Credit

The children's arts tax credit will allow families to claim up to $500 of eligible expenses per child per year.  Eligible expenditures are those that qualify for the federal Children's Arts Credit.

Medical Expense Tax Credit for Other Eligible Dependants

The $10,000 limit will be removed for the 2012 and future tax years.  The tables of non-refundable personal tax credits for 2012 has been revised to reflect this change.

Enhanced Dividend Tax Credit Increase

The BC enhanced dividend tax credit for eligible Canadian dividends, which would have been 9.76% of the taxable dividend automatically with the reduction of the gross-up to 38%, is increased from 9.76% to 10% effective for the 2012 and future tax years.  The BC table of marginal tax rates for 2012, and the tables of enhanced dividend tax credit rates have been modified to reflect this change.

HST Elimination

The following changes result from the elimination of the HST effective April 1, 2013:

Basic Personal Amount Tax Credit

This tax credit was increased in 2010 with the implementation of the HST, so will be reduced for 2013.  The revised credit amount will be $9,373, plus any inflation indexing that has occurred since 2009.  The inflation indexation to 2012 would bring it up to $9,713, and this will be increased again when the 2013 indexation factor is known.  The basic personal amount for 2012 is $11,354.  The 2013 basic personal amount will be a blended amount to reflect the higher credit amount for the first 3 months of 2013 in which the HST applies, and the lower credit amount for the 9 months in 2013 in which the PST applies.

BC Sales Tax Credit

This refundable credit will be re-introduced for 2013.

BC HST Credit

The final quarterly BC HST payment will be issued in January 2013.

Transitional Rules for HST elimination

Proposed transitional rules have been published by the federal Department of Finance.

BC Home Owner Grant

The threshold for the phase-out of the home owner grant is increased from $1,150,000 to $1,285,000 for the 2012 tax year (as previously announced).  For properties valued above $1,285,000, the grant is reduced by $5 for every $1,000 of assessed value (i.e., 0.5%) in excess of the threshold.

The threshold for income-tested home owner grant is increased for 2012 from $28,000 to $30,000.  The income threshold for a partial benefit is increased from $30,000 to $32,000.

As previously announced, a veteran's supplement for qualifying low-income veterans under 65 is introduced for 2012.

Effective for 2012 and future years, qualifying homeowners who have moved into a residential facility will be able to apply for the Home Owner Grant for one additional year, for the home that they continue to own, and that qualified in the previous year.

Business

On April 1, 2012, BC will eliminate the provincial jet fuel tax for international flights.

The Training Tax Credit program, which encourages employers and workers to get involved in apprenticeship programs, will be extended.

New training tax credits are introduced for eligible employers that employ apprentices in the BC shipbuilding and ship repair industry.  These employers can receive a refundable tax credit of 20% of wages paid per year, up to $5,250 per eligible apprentice, in the first 24 months of an eligible apprenticeship program, and can also receive similar credits based on an apprentice's completion of higher training levels.

The Small Business Venture Capital Tax Credit will allow up to $10M annually in additional equity financing for qualifying new businesses.

The existing cap on municipal port property tax rates will be made permanent.  Local governments will continue to be compensated for the difference.

The corporate Book Publishing Tax Credit is extended to March 31, 2017.

Film and Television Tax Credit - Full film incentive BC tax credits for eligible interprovincial co-productions allowed.

Interactive Digital Media Tax Credit - Tax credits for cutscene productions clarified to exclude cutscene productions from BC's film tax credits, effective September 1, 2010.

Small Business Venture Capital Act - the budget for the Small Business Venture Capital Program is increased by $3 million, effective for the 2012 program year, to provide tax credits for direct investments in eligible new corporations.

Provincial sales taxes (PST)

The return to the provincial sales tax system, as recently announced, will happen on April 1, 2013.

Carbon Tax

The carbon tax increase on July 1, 2012 will be the last increase.

Tobacco Tax

With the re-implementation of the PST, the provincial portion of the HST on tobacco products will be eliminated.  To offset this reduction, tobacco tax rates will be adjusted to generally keep the overall tax on tobacco constant.

 

All of the tax changes in the 2012 Budget are subject to legislative approval.

The above does not include all provisions of the 2012 Budget.  For further information see the following on the BC Government website:

bulletBC 2012 Budget
bulletBudget and Fiscal Plan (pdf) - tax measures start on page 56

 

Revised: February 23, 2017

 

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