2022 Budget tax changes
Publication date: February 22, 2022On February 22, 2022, the government announced changes to the provincial tax laws.
Read a summary explanation of all the tax changes for Budget 2022 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)
Exemption for used zero-emission vehicles (ZEVs) introduced and passenger vehicle surtax threshold for ZEVs increased
Effective February 23, 2022, used ZEVs are exempt from PST. The exemption applies to all motor dealer sales, as well as private sales of used ZEVs that have been driven for at least 6,000 kilometres.
Additionally, effective February 23, 2022, the passenger vehicle surtax threshold for ZEVs is increased to $75,000 from $55,000.
This change supports government’s CleanBC initiative.
See the following bulletins for more information:
- Bulletin PST 308, PST on Vehicles (PDF, 395KB)
- Bulletin PST 116, Motor Vehicle Dealers and Leasing Companies (PDF, 497KB)
Exemption for heat pumps introduced and tax rate on fossil fuel combustion systems increased
Effective April 1, 2022, heat pumps are exempt from PST and PST on fossil fuel combustion systems that heat or cool buildings or water is increased to 12 percent.
This change supports government’s CleanBC initiative.
See the following notice for details and transitional provisions:
- Notice 2022-003, Provincial Sales Tax on Fossil Fuel Combustion Systems and Heat Pumps (PDF, 298KB)
New PST requirements for marketplace facilitators introduced
Effective July 1, 2022, businesses that are marketplace facilitators for sales or leases of certain goods, services, or software for third parties through their online marketplace will be required to collect and remit tax on certain B.C. sales and leases.
Additionally, effective July 1, 2022, marketplace facilitators will be required to charge PST on marketplace services they provide to sellers.
See the following bulletin for details:
- Bulletin PST 142, Marketplace Facilitators, Marketplace Sellers and Online Marketplace Services (PDF, 331KB)
Exemption for tobacco removed
Effective July 1, 2022, the PST exemption for tobacco is removed.
More information is coming soon.
Purchase price of private vehicle sales for tax purposes adjusted
Effective October 1, 2022, tax on private sales of motor vehicles will be based on the greater of the reported purchase price and the average wholesale value of the vehicle. This does not apply to a trade-in.
More information is coming soon.
Clarification on PST for gift cards and gift certificates
Effective February 23, 2022, the following bulletins are amended to clarify gift cards and gift certificates are not subject to PST when acquired:
- Bulletin PST 105, Software (PDF, 425KB)
- Bulletin PST 107, Telecommunication Services (PDF, 441KB)
- Bulletin PST 132, Building and Home Improvement Stores (PDF, 386KB)
- Bulletin PST 206, Grocery and Drug Stores (PDF, 431KB)
- Bulletin PST 311, Promotional Materials and Special Offers (PDF, 357KB)
Clarification on who pays PST when a real property contractor is used
Effective April 1, 2013, the Provincial Sales Tax Act is amended to clarify the evidentiary requirements for real property contracts where the customer and the contractor agree that the customer is responsible for paying PST.
See the following bulletin for more information:
- Bulletin PST 501, Real Property Contractors (PDF, 341KB)
Motor fuel tax
Hydrogen exemption expanded
Effective February 23, 2022, hydrogen fuel is classified as a Category 1 alternative motor fuel and is exempt from motor fuel tax provided that:
- The hydrogen is purchased for use in an internal combustion engine vehicle, and
- The hydrogen is not produced by electrolysis using coal-generated electricity, unless the carbon dioxide emitted from the process is captured and stored or captured and sequestered
Income taxes
Clean buildings tax credit introduced
Effective February 23, 2022, a new temporary clean buildings tax credit for retrofits that improve the energy efficiency of eligible commercial and multi-unit (4 or more units) residential buildings is introduced.
People who improve the energy efficiency of eligible commercial and multi-unit residential buildings can receive a refundable tax credit of 5 percent of qualifying expenditures.
This change supports government’s CleanBC initiative.
Equity tax credit budget for clean technology temporarily increased
Effective for the 2022 to 2024 years, the total tax credit budget is temporarily increased to $41 million. The increase is allocated to investments made in clean technology.
- Personal: Small business venture capital tax credit
- Corporate: Small business venture capital tax credit
Scientific research and experimental development tax credit extended
The scientific research and experimental development tax credit is extended for five years to August 31, 2027.
Shipbuilding and ship repair industry tax credit extended
The shipbuilding and ship repair industry tax credit is extended for two years to the end of 2024.
Training tax credits extended
The training tax credits are extended for two years to the end of 2024.
- Training tax credit for apprentices
- Training tax credit for employers
Property taxes
Rural property tax
Residential and non-residential rural area property tax rates for 2022 will be set in the spring, consistent with a long-standing rate-setting policy.
School tax
Provincial residential and non-residential school tax rates for 2022 will be set in the spring.
Effective for the 2023 taxation year, the provincial industrial property tax credit for class 4 major industry is removed. The 2023 major industry school tax rate will be reduced to offset the removal of the credit.
Speculation and vacancy tax
Exemption for strata accommodation properties made permanent
The exemption for strata accommodation properties that applies to a residential property is now made permanent.
Exemption for hazardous or damaged residential property temporarily expanded
Effective for the 2021 tax year only, the exemption for hazardous or damaged residential property is expanded to apply to homeowners whose principal residence or tenancy exemption was affected by the Fraser Valley flooding in late 2021.
Various acts
Technical amendments
Effective February 23, 2022, the Carbon Tax Act and Motor Fuel Tax Act are amended to authorize the director to establish an annual period for tax reporting.
Effective on royal assent, the Motor Fuel Tax Act is amended to authorize the director to specify the form to be used as an application for a carrier licence under the International Fuel Tax Agreement.
Effective on a date to be specified by regulation, the Provincial Sales Tax Act has been amended to make minor changes to provisions related to tax payment agreements.
Effective February 22, 2022, the production services tax credit is amended to extend the pre-certification filing deadline from 60 days to 120 days.
Effective November 27, 2018, the Speculation and Vacancy Tax Act is amended to change the deadline to apply for a tax credit for eligible taxpayers.
The filing requirements for appeals to the Minister of Finance have been harmonized across the taxing statutes to clarify that an appeal is considered filed on the date it is received by the Ministry. These amendments will also allow for fax transmittal reports, signed courier waybills or other applicable evidence as proof of on-time receipt by the ministry. This change is effective for any appealable decision, such as an assessment or disallowed refund, issued on or after October 1, 2022. The following acts and regulations will be amended:
- Carbon Tax Act
- Carbon Tax Regulation
- Employer Health Tax Act
- Home Owner Grant Act
- Insurance Premium Tax Act
- Logging Tax Act
- Mineral Tax Act
- Motor Fuel Tax Act
- Net Profit Royalty Regulation
- Petroleum and Natural Gas Royalty and Freehold Production Tax Regulation
- Property Transfer Tax Act
- Provincial Sales Tax Act
- Speculation and Vacancy Tax Act
- Tobacco Tax Act