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Tax Highlights from the 2018 BC Budget – Clearline CPA

By Bilal Kathrada

bilal-clearline-chartered-accountants-300x200The 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
    12%.
  • 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
    $500,000.
  • 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.

Caregiver Credit

  • 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
    Regional District).

Speculation Tax

  • 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.
If you have any questions about how this impacts you or your business, please call us at 604.639.0909 or email we_are@clearlinecpa.ca.