Home Owner Grant
The property value threshold for the full home owner grant is increased to $1.65 million for the 2018 tax year, from $1.6 million in 2017. For properties valued above the $1.65 million threshold, the grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold.
Legislation will be introduced in 2018 that will impose a speculation tax on residential property located in B.C. This new tax will target foreign and domestic home owners who do not pay income tax in B.C., including those who leave their homes vacant. Satellite families – households with high worldwide income that pay little income tax in B.C. – will also be subject to the tax, which will be effective for the 2018 and subsequent tax years.
Up-front exemptions will be available for most principal residences, qualifying long-term rental properties and certain special cases and the majority of homeowners in B.C. will be exempt from this tax.
For persons who do not qualify for up-front exemptions but who pay income taxes in B.C., a non-refundable income tax credit will be available to provide relief. If unused, this credit can be carried forward to future years.
This new Speculation Tax will initially apply to the Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts and in the municipalities of Kelowna and West Kelowna. In 2018, the tax rate will be $5 per $1,000 of assessed value and in 2019, the tax rate will rise to $20 per $1,000 of assessed value.
Employer Health Tax
Legislation will be introduced in 2018 to implement an employer health tax on employers’ payroll starting in the 2019 calendar year. This new tax will not apply to employers with payroll under $500,000. For employers with payroll between $500,000 and $1.5 million, the tax rate will phase in gradually until it reaches 1.95% at $1.5 million in total payroll. Employers with payroll over $1.5 million will pay the maximum rate of 1.95% on their total payroll.
Medical Services Plan
Effective January 1, 2020, Medical Services Plan (“MSP”) premiums will be eliminated. A 50% reduction in premiums was announced during last year’s Budget Update, effective January 1, 2018. Once MSP premiums have been eliminated, single individuals will realize annual savings of up to $900 and families will realize annual saving of up to $1,800.