B.C. Provincial Budget Tax Changes
On February 20, 2018, the government announced proposed changes to the provincial tax laws.
Read a summary explanation of all the tax changes in the Budget and Fiscal Plan.
Changes were introduced for:
Learn more about the following tax changes using the sources below.
Sales Taxes
Provincial Sales Tax
PST rate increase for passenger vehicles – Effective April 1, 2018, passenger vehicles valued at $125,000 or more are subject to higher PST rates as follows:
- Valued at $125,000 to $149,999.99 – rate increased from 10% (12% for private sales or gifts) to 15%
- Valued at $150,000 and above – rate increased from 10% (12% for private sales or gifts) to 20%
The rate applies to both new and used passenger vehicles.
Accommodation – Effective on a date to be specified by regulation, online accommodation platforms are enabled to register as collectors, and to collect and remit PST and the municipal and regional district tax on accommodation.
Avalanche airbag backpacks – Effective April 1, 2018, the exemption for avalanche airbag backpacks is expanded to include all avalanche airbag backpacks.
Municipal and Regional District Tax (MRDT) – Effective on a date to be specified by regulation, MRDT revenue collected by municipalities, regional districts and eligible entities, such as tourism-focused non-profits, can be used to fund affordable housing initiatives. Currently, funds can only be used for tourism marketing, programs and projects.
Sales and leases on cruise ships – Retroactive to April 1, 2013, retailers operating on cruise ships in B.C. waters are not required to collect PST on sales and leases during the course of scheduled sailings.
Software – Retroactive to April 1, 2013, the legislation is amended to clarify that software provided in optional as-needed maintenance agreements is taxable.
Tax payment agreements – Effective on royal assent, certain commercial rail services are able to use their Tax Payment Agreements to purchase related services in B.C.
Tobacco Tax
Effective April 1, 2018, the tobacco tax rates are increased by 2.8 cents to 27.5 cents per cigarette and by 12.8 cents to 37.5 cents per gram for all tobacco other than cigars and cigarettes.
More information on the requirement to take an inventory of, and pay additional security on, tobacco held in inventory at 12:01 am on April 1, 2018 will be provided at a later date.
Motor Fuel Tax & Carbon Tax
Retroactive to February 18, 2014, refiner collectors that acquire fuel for retail sale from another refiner collector are exempt from paying security and a refund is provided for security paid by a refiner collector on fuel sold to another refiner collector.
Motor Fuel Tax
Effective April 1, 2018, the motor fuel tax rates in the Victoria regional transit service area are increased to 5.5 cents per litre from 3.5 cents on gasoline and diesel.
More information on the requirement to take an inventory of, and pay additional security on, fuel held in inventory at 12:01 am on April 1, 2018 will be provided at a later date.
Effective April 1, 2018, marine diesel fuel used in interjurisdictional cruise ships and ships prohibited from coasting trade under the Coasting Trade Act is exempt from motor fuel tax.
Income Taxes
Tax Credits
Book publishing tax credit extended.
B.C. mining flow-through share tax credit extended.
Education tax credit eliminated.
Farmers’ food donation tax credit extended.
Film incentive B.C. tax credit expanded to scriptwriting.
Infirm dependent credit and caregiver credit replaced with a new B.C. caregiver credit.
Interactive digital media tax credit extended.
Property Taxes
Property Transfer Tax
Property transfer tax rate on the value of residential properties above $3 million increased.
Additional property transfer tax rate increased and area expanded.
Bankruptcy exemption (code 12) expanded.
The Property Transfer Tax Act is amended to enhance administration and information sharing.
- The limitation period for property transfer tax assessments is extended to six years
- Additional information is collected on property transfer tax returns, including tax identification numbers for individuals using bare trusts
- An administrative monetary penalty for non-compliance is introduced
- The general anti-avoidance rule is extended to the entire Act
- Access to additional information on property transactions, including information in a multiple listing service database, is enabled
Annual Property Tax
The government will introduce legislation in 2018 to impose a speculation tax on residential property in B.C. The majority of B.C. homeowners will be exempt from this tax.
School tax increased for most residential properties where the value of the residential portion exceeds $3 million.
Purpose-built rental housing exempted from school tax if it receives a municipal revitalization certificate.
Petroleum & Natural Gas Royalties and Taxes
Royalty and Tax Compliance
The Petroleum and Natural Gas Act is amended to provide the Ministry of Finance additional tools regarding the management of non-compliance and reporting errors by industry participants, including non-royalty payers.
Information Management
Royalty and tax information are subject to confidentiality rules similar to other B.C. taxation statutes.
Tax Audits
Effective on a date to be specified by regulation, the Carbon Tax Act, Motor Fuel Tax Act and Provincial Sales Tax Act are amended to allow for a fee to be charged to recover costs associated with out-of-province audits.
