BC Budget 2024 introduces new tax measures designed to help improve housing supply, amend the employer health tax, and address affordability, among others. The corporate and personal tax rates also remain unchanged for 2024. In addition, the budget outlines significant capital spending on BC’s health, transportation, housing, and education sectors.
BC Budget 2024 estimates that the province’s deficit for the 2023-24 fiscal year was $5.914 billion, compared to the $4.216 billion deficit projected in the previous budget.
Fiscal projections for the next three years are as follows:
| Year | Projected surplus / (deficit) |
| 2024-25 | ($7.911 billion) |
| 2025-26 | ($7.773 billion) |
| 2026-27 | ($6.288 billion) |
BC Budget 2024 introduces a new tax on income from the sale of certain residential real estate in BC that’s held for less than two years. This new tax applies regardless of whether the seller is a BC resident and is in addition to any federal or provincial income tax on the sale. The tax rate will begin at 20% of income for properties sold within the first year of purchase and is gradually reduced to zero for properties sold between the first and second year of purchase, even when the purchase occurred before the effective date of the new tax.
This measure applies to the sale of properties zoned for residential use and other properties containing a housing unit, as well as assignment sales. The tax will not apply to land or portions of land used for non-residential purpose, nor to the sale of properties located on reserve lands, treaty lands, and lands of self-governing Indigenous Nations.
Exemptions will be available for certain life events motivating the sale, such as separation or divorce, death or illness, certain employment loss or relocation, insolvency, or other circumstances. In addition, individuals selling their primary residence can deduct up to $20,000 from the income on the sale for the purpose of calculating this tax.
This measure will apply to properties sold on or after January 1, 2025. The province says it intends to introduce the related legislation this spring.
BC Budget 2024 increases the exemption for first time homebuyers who use their home as a principal residence. This measure increases the qualifying value to allow for a partial exemption for homes with a fair market value between $500,000 and $835,000 and phases out the exemption for homes valued above $835,000. Previously the exemption was only available to homes with a qualifying value of $500,000 or less. The increased exemption is proposed to be effective April 1, 2024.
BC Budget 2024 also proposes to increase the exemption for newly built homes to $1.1 million (from $750,000). This exemption is phased out for homes with a fair market value of $1.15 million.
In addition, BC Budget 2024 exempts all transactions of purpose-built rental buildings from the general property transfer tax for transactions that occur between January 1, 2025 and December 31, 2030. Note that the additional property transfer tax (i.e., the foreign buyers’ tax) still applies to these buildings.
BC Budget 2024 expands the speculation and vacancy tax by amending the definition of “registered occupier” to include leaseholders of leases registered in the Land Title Office. Registered occupiers will be required to complete an annual declaration to claim exemptions with the first declaration due in 2025.
BC Budget 2024 announces no changes to the corporate tax rates or the $500,000 small business limit.
Combined federal and BC corporate tax rates
| Small business tax rate | General corporate tax rate | Manufacturing and processing tax rate |
| 11.00% | 27.00% | 27.00% |
BC Budget 2024 excludes animated productions from being eligible for the distant location regional tax credit, which is one of the six tax credits under the Film Incentive BC tax credit program. The budget further excludes these animated productions from being eligible for the regional production services tax credit, which is one of the four credits under the production services tax credit program. The refundable regional and distant location tax credits provide relief for qualified labour expenditures incurred in BC outside of the designated Vancouver area.
These changes are intended to prevent animation companies from using the credit to subsidize remote teleworkers. These measures are proposed to apply beginning on or after June 1, 2024.
BC Budget 2024 extends the training tax credit for employers to the end of 2027 (instead of 2024).
This refundable tax credit is available for employers who employ apprentices enrolled in programs through SkilledTradesBC. The training tax credit contains three elements which provide a refund of 15% – 20% of eligible expenses, with an enhancement available for First Nations individuals and persons with disabilities.
BC Budget 2024 extends the shipbuilding and ship repair industry tax credit to the end of 2026 (instead of 2024).
This tax credit is available for eligible businesses that employ apprentices in the BC shipbuilding and ship repair industry. The shipbuilding and ship repair industry tax credit includes three types of refundable tax credits which provide a refund of 15% – 20% of eligible expenses, with an enhancement available for First Nation individuals and persons with disabilities.
BC Budget 2024 excludes oil and gas exploration expenditures from qualifying for the mining exploration tax credit. This refundable tax credit is available for eligible corporations that conduct grassroot mineral exploration in BC and is calculated as 20% of qualified mining exploration expenses.
This amendment follows a similar change by the federal government to exclude fossil fuel exploration expenditures from being eligible for the mining flow-through share tax credit. This measure is proposed to be effective February 23, 2024.
BC Budget 2024 doesn't change the personal rates. The indexed personal tax brackets and the respective marginal tax rates for 2024 are as follows:
| Tax brackets | Marginal tax rates |
| $47,937 or less | 5.06% |
| $47,937 to $95,875 | 7.70% |
| $95,875 to $110,076 | 10.50% |
| $110,076 to $133,664 | 12.29% |
| $133,664 to $181,232 | 14.70% |
| $181,232 to $252,752 | 16.80% |
| Over $252,752 | 20.50% |
The top combined federal and BC marginal tax rates for 2024 are as follows:
| Type of income | 2024 |
| Salary/interest income | 53.50% |
| Capital gains | 26.75% |
| Eligible dividends | 36.54% |
| Non-eligible dividends | 48.89% |
BC Budget 2024 introduces a temporary BC family benefit bonus, which will be delivered alongside the BC family benefit. The existing benefit provides a tax-free monthly payment to families with children under the age of 18 and includes a single-parent supplement. The new bonus enhances the current benefit by providing a 25% increase to the annual benefit amounts, beginning July 1, 2024, through June 2025. This measure also includes a 25% increase to the income thresholds used to determine BC family benefit entitlement.
The bonus is proposed to only apply for the 2024/25 benefit year, with the annual benefit and income threshold amounts returning to their former levels following the end of the 12-month benefit period.
BC Budget 2024 increases the maximum annual tax credit amount to $504 for an adult, $252 for a spouse or common-law partner, and $126 per child. Single-parent families will continue to receive the spouse or common-law partner amount for the first child in the family. The budget also increases income thresholds that determine when the credit begins to phase out. These changes will be effective July 1, 2024.
BC Budget 2024 amends the definition of “software”, “infrastructure as a service” (IaaS), and similar related items retroactively to April 1, 2013 to make these services taxable. BC Budget 2024 also proposes to make software as a service (SaaS), IaaS, web hosting and data backup services PST exigible. This measure particularly applies to cloud-based computing products, or any service where customers are paying to access computer resources on-demand.
Additionally, BC Budget 2024 proposes administrative penalties for failing to file a return, repeatedly failing to file a return, failing to comply with books and records legislation, and third-party penalties.
BC Budget 2024 also makes changes to the availability of BC PST refunds in certain circumstances, expands the production machinery and equipment exemption to include projects that use alternative energy sources (e.g., solar, wind), and amendments to clarify the rules for when services are provided with taxable leased goods.
BC Budget 2024 amends the biomethane credit refund under the Carbon Tax Act so the refund is determined solely by the total biomethane credits provided by the qualifying retail dealer in a reporting period. This change will enable qualifying retail dealers to claim refunds in future periods based on any surplus biomethane not needed to fulfil biomethane contracts from previous periods. Taxpayers can’t claim this refund on biomethane acquired or blended more than two years before the reporting period. Currently, the refund is calculated based on the lesser of either the sum of biomethane credits provided or the total amount of biomethane blended in a reporting period.
This change is proposed to be effective April 1, 2024.
BC Budget 2024 increases the employer health tax exemption threshold to $1 million (from $500,000). Employers with BC remuneration less than $1 million are exempt from paying the employer health tax. Additionally, BC Budget 2024 increases the tax rate for BC remuneration between $1 million and $1.5 million to 5.85% (from 2.925%).
These changes are proposed to apply to remuneration paid on or after January 1, 2024.
BC Budget 2024 eliminates property tax on Nisga'a Lands or the Treaty Lands of a Modern Treaty Nation. This change is proposed to start for the 2025 tax year.
Additionally, BC Budget 2024 proposes legislative amendments to grant Modern Treaty Nations the right to independently determine their own property tax including assessments and administrative policies.
BC electricity affordability credit – BC Budget 2024 introduces a one-time rebate through BC Hydro for its electricity customers. The province estimates that each household could save approximately $100 on their electricity bills over one year, while commercial and industrial customers will receive credits on their electricity bills equivalent to about 4.6% of their consumption. This rebate is proposed to start in April 2024.
Health care – BC Budget 2024 provides an additional $6 billion in health care funding over three years with $2 billion towards increased capacity in the health care system, including primary and acute care services, long-term care, and mental health/substance use care settings. The budget also proposes $68 million of funding to provide a single cycle of in-vitro fertilization treatment, starting April 1, 2025.
K to 12 education – BC Budget 2024 invests an additional $968 million over three years to fund the hiring of more teachers, classroom support staff such as special education teachers and teacher psychologists, public school enrolment growth, and independent school education costs.
Housing – BC Budget 2024 provides an additional $116 million of funding over three years to support existing housing programs and services, and an additional $198 million over three years towards the new BC Builds program to speed up the development of new housing for middle-income households.
Transportation – BC Budget 2024 invests more than $15.3 billion for transportation operating and capital investments over the next three years.
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Disclaimer
The information contained herein is general in nature and is based on proposals that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice or an opinion provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, specific circumstances or needs and may require consideration of other factors not described herein.
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