21 Feb Tax Highlights from the 2018 BC Budget – Clearline CPA
By Bilal Kathrada
The Minister of Finance, Carole James, delivered the Province’s 2018 budget on February 20, 2018.
Here is a summary of corporate, personal and other Provincial tax measures announced in the budget:
Corporate Tax Changes
Corporate Income Tax Rates
- No changes were made to corporate income tax rates.
- The small business corporate income tax rate will remain at 2%. The combined federal and BC corporate
tax rate for small business (on the first $500,000 of active business income) will therefore remain at
- The general corporate tax rate will remain at 15%. The combined general federal and BC corporate tax
rate for active business income will remain at 27.0%.
Employer Health Tax
- The Government announced a new employer health tax on payroll beginning January 1, 2019.
Employers with over $1.5m in payroll will pay 1.95% on their total payroll. A gradual reduction will be
applied for those between $1.5m to $500,000 and the tax will not apply to employers with payroll under
- MSP premiums are being eliminated on January 1, 2020.
Personal Tax Changes
Personal Income Tax Rates
- No changes were made to personal income tax rates.
- A new caregiver credit is replacing the caregiver tax credit and the infirm dependent tax credit. This non-
refundable credit is available to those who care for an eligible adult relative who is dependent on the
caregiver because of physical or mental infirmity. The maximum credit amount is $4,556 per infirm
dependent for 2018.
Education Tax Credit
- Effective 2019, the education credit is eliminated.
Other Tax Changes
Property Transfer Tax
Residential Properties over $3 million
- The property transfer tax rate is increased by 2% to 5% for taxable transactions that exceed a threshold
of $3 million.
Additional Property Transfer Tax Rate Increase (aka Foreign Buyer Tax)
- The additional property transfer tax rate is increased from 15% to 20% and the tax is expanded to
certain areas outside of Metro Vancouver (including the Fraser Valley Regional District and Capital
- A new speculation tax will be announced to target domestic and foreign home owners who do not pay
income tax in B.C. Legislation will be announced in 2018.
Pre-Sale Condo Assignments
- The Province intends to require developers to collect and report information about the assignment of
pre-sale condo purchases to a designated provincial office.
PST on Online Accommodation Platforms
- Online accommodation marketplaces for short-term accommodations will be able to register as
collectors, and to collect and remit PST on accommodation. This will relieve its hosts (owners/lessors)
from the obligation to register for PST.
Luxury Surtax on Passenger Vehicles Increased
- Vehicles with a purchase price over $125,000 are currently subject to a luxury vehicle surtax. For
vehicles between $125,000 to $149,999 the surtax will increase to 15% and for vehicles over $150,000,
the surtax will increase to 20%.
- The general rate on private sales is also increased to 15% for vehicles between $125,000 to $149,999
and 20% for vehicles over $150,000.