BC Budget revealed by the new NDP government

The BC Government released their 2017 budget today.

Finance Minister Carole James says, “In Budget 2017 Update, you’ll see our choices to build a better BC for everyone. We’re putting people first by improving the services they need and making their lives more affordable while supporting a strong, sustainable economy that provides good jobs across our province.”

BCREA has provided the following summary on the measures related to their provincial public policy priorities.

Market Housing Affordability

Property Transfer Tax (PTT)

  • First-time buyer exemption – Confirmed the increase of the First Time Home Buyers’ Program threshold to $500,000 (from $475,000). The partial exemption continues and applies to home valued between $500,000 and $525,000.
  • Foreign buyers’ tax – The Finance Minister stated several times that the Foreign Buyers’ Tax seemed to work at the beginning but didn’t ultimately achieve its objective.
  • Revenue – Revenue from the PTT in 2016/17 was $2.026 billion. This is the highest revenue ever since the PTT was introduced. The revenue estimate for 2017/18 is $1.875 billion. The year to date revenue (to June 30) was $548 million.

Housing Investments

  • $208 million over four years to support construction of more than 1,700 new units of affordable rental housing.
  • $7 million in additional funding to the Residential Tenancy Branch to address backlogs (27 per cent increase).
  • 2,000 modular housing units to be built for homeless populations ($291 million to build / $172 million to operate over three years).
  • The government plans to build a comprehensive housing strategy. They believe increasing housing supply alone will not solve the “housing crisis,” implying that additional demand side policies are likely to be introduced in the new year. We expect changes to come in the February 2018 budget.

Home Owner Grant

  • Confirmed the increase of the phase-out threshold to $1.6 million.
  • The Home Owner Grant Act and Income Tax Act are amended to allow for information sharing between the two acts. The Income Tax Act is also amended to provide income tax administration with increased access to assessment data.

General Business

  • Reducing small business corporate tax rate to 2 per cent (from 2.5 per cent).
  • Increasing personal income tax rate to 16.8 per cent (from 14.7 per cent) on taxable income over $150,000.
  • Plan to phase out PST on electricity.
  • Increasing general corporate tax rate to 12 per cent.
  • On April 1, 2018, the carbon tax rate will increase by $5 per tonne of CO2 emissions, and the requirement for the carbon tax to be revenue neutral will be eliminated.

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