2024 B.C. Budget Highlights
On February 22, 2024, British Columbia’s Minister of Finance, Katrine Conroy, tabled the province’s budget for the 2024-2025 fiscal year. We have highlighted selected tax measures relevant to individuals and small businesses in British Columbia.
INDIVIDUALS
Personal Tax Rates
The budget did not propose any changes to personal income tax rates. The personal tax brackets continue to be indexed.
| 2023 Taxable Income | 2024 Taxable Income | Rate |
|---|---|---|
| $0 to $45,654 | $0 to $47,937 | 5.06% |
| $45,654 to $91,310 | $47,937 to $95,875 | 7.70% |
| $91,310 to $104,835 | $95,875 to $110,076 | 10.50% |
| $104,835 to $127,299 | $110,076 to $133,664 | 12.29% |
| $127,299 to $172,602 | $133,664 to $181,232 | 14.70% |
| $172,602 to $240,716 | $181,232 to $252,752 | 16.80% |
| Over $240,716 | Over $252,752 | 20.50% |
Top Combined BC and Federal Rates
| Income Type | 2023 | 2024 |
|---|---|---|
| Salary, interest, pension, foreign | 53.50% | 53.50% |
| Eligible dividends | 36.54% | 36.54% |
| Non-eligible dividends | 48.89% | 48.89% |
| Capital gains | 26.75% | 26.75% |
Top rates apply to taxable income over $252,752 and $240,716 (2023) based on known federal and B.C. rates at February 22, 2024.
Introduction of Home Flipping Tax
- New provincial flipping tax for residential property held less than two years
- 20 per cent tax rate applies to the profit from the sale within 365 days of purchase and the tax rate will decline to zero on a straight-line basis between 366 and 730 days (e.g. the flipping tax rate will be 10 per cent for 548 days between purchase and sale dates)
- Flipping tax also applies to profits from the assignment of contracts
- Exemptions for life circumstances are available, such as separation, divorce, death, disability, illness, work relocation, involuntary job loss, change in household membership, personal safety, or insolvency
- Individuals selling their primary residence within two years of purchase receive a maximum $20,000 exemption when calculating taxable profit from sale
- The flipping tax is in addition to any federal or provincial income taxes incurred from the property sale
- Measure will apply to properties sold on or after January 1, 2025
Bonus to B.C. Family Benefit
| Annual B.C. Family Benefit with Bonus | Maximum Benefit Family Income < $35,902 | Minimum Benefit Family Income < $114,887 |
|---|---|---|
| First child | $2,188 | $969 |
| Second child | $1,375 | $937 |
| Each Additional child | $1,125 | $906 |
- Temporary 25 per cent bonus increase to both the annual benefit amounts and the income thresholds to determine eligibility for the benefit
- More families will be eligible for the family benefit payments due to the increased income thresholds
- Effective July 1, 2024 to June 30, 2025
Increase to Climate Action Tax Credit
| Maximum Annual Climate Action Tax Credit | Prior | As of July 1, 2024 |
|---|---|---|
| Adult | $447.00 | $504.00 |
| Spouse or common-law partner | $223.50 | $252.00 |
| Each Child | $111.50 | $126.00 |
- Single parents will continue to receive the spouse/partner amount for the first child in the family
- Income thresholds for the credit phase out will also increase to $41,071 for individuals and $57,288 for families
- Effective July 1, 2024
Other Income Tax Measures
- Oil and gas exploration expenditures will no longer qualify for the mining exploration tax credit, effective February 23, 2024
- Training tax credit for individuals extended for one year to the end of 2025 (apprentices with disabilities or First Nations status)
Property Transfer Tax Measures
Increase to First-Time Home Buyers’ Exemption Threshold
- First-time home buyers’ exemption threshold increases from a fair market value of $500,000 to $835,000, with the first $500,000 exempt from property transfer tax
- Phase-out range is $25,000 above the threshold, with the complete elimination of the exemption at $860,000
- Effective April 1, 2024
Increase to Newly Built Home Exemption Threshold
- Qualifying newly built homes purchased as a principal residence are exempt from property transfer tax where the value is under the exemption threshold
- Exemption threshold increased from a fair market value of $750,000 to $1,100,000
- Phase-out range is $50,000 above the threshold, with the complete elimination of the exemption at $1,150,000
- Effective April 1, 2024
Enhancement to New Purpose-Built Rental Buildings Exemption
- Purchases of new qualifying purpose-built rental buildings will be exempt from property transfer tax.
- Residential portion of building must be entirely used for rental purposes and have at least four apartments
- Effective for transactions that occur between January 1, 2025 and December 31, 2030
Speculation and Vacancy Tax Amendment
- Person who possesses a residential property under a lease registered in the Land Title and Survey Authority of British Columbia will be treated as the registered occupier of the property
- Leaseholder is responsible for the filing and payment of the speculation and vacancy tax
- Effective January 1, 2024
BUSINESSES
Corporate Tax Rates
The budget did not propose any changes to corporate income tax rates and it did not change the $500,000 provincial small business income threshold. The calendar year rates below reflect a December 31st year end.
| Income Type | B.C. Rate | Federal Rate | Combined Rates Calendar 2024 |
|---|---|---|---|
| General corporate | 12.00% | 15.00% | 27.00% |
| Small business | 2.00% | 9.00% | 27.00% |
| CCPC* investment | 12.00% | 38.67% | 50.67% |
| Non-CCPC investment | 12.00% | 15.00% | 27.00% |
| Manufacturing and processing income | 12.00% | 15.00% | 27.00% |
Based on known federal and B.C. rates at February 22, 2024
*Canadian Controlled Private Corporation
Increase to Employer Health Tax (EHT) Exemption Threshold
- Doubling of the EHT remuneration threshold from $500,000 to $1 million
- Notch rate increase from 2.925 per cent to 5.850 per cent for the $1 million to $1.5 million bracket
- Effective January 1, 2024
Other Business Income Tax Measures
- Training tax credit for employers extended for three years to the end of 2027 (employing apprentices with disabilities or First Nations status)
- Regional and distant location tax credits are amended to exclude animation productions from eligibility, effective June 1, 2024
- Shipbuilding and ship repair industry tax credit extended for two years to the end of 2026
Refer to the 2024 B.C. Budget here for further details.
This has been prepared by the Total Wealth Solutions Group of Raymond James Ltd., (RJL). Statistics and factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member - Canadian Investor Protection Fund.