2023 Provincial Budget Highlights
On February 28, 2023, the BC Ministry of Finance released the province’s 2023 Provincial Budget. A summary of the BC Budget key highlights is provided below.
Income Tax Measures
There have been no proposed income tax rate changes. Income tax measures proposed in the Budget include the following:
- Effective July 1, 2023, the BC Family Benefit amounts are permanently increased based on the number of children under 18 in a family. The minimum and maximum annual benefits are as follows:
|Minimum Benefit||Maximum Benefit|
|$775 for the first child||$1,750 for the first child|
|$750 for the second child||$1,100 for the second child|
|$725 for each subsequent child||$900 for each subsequent child|
The maximum annual benefit is phased out for families with adjusted family net income over $27,354 and the benefit is fully phased out where adjusted family net income reaches $87,533.
- Effective July 1, 2023, as part of the BC Family Benefit, a maximum annual supplement of $500 will be provided to single-parent families.
- Effective July 1, 2023, the annual Climate Action Tax Credit will be increased from $193.50 to $447 for an adult, from $193.50 to $223.50 for a spouse or common-law partner, and from $56.50 to $111.50 per child.
- Effective January 1, 2023, a new refundable Renter’s Tax Credit is introduced for eligible households that rent and occupy living accommodations in BC for at least six months in a calendar year. The maximum amount of the credit is $400 per year and is gradually reduced for households where adjusted income exceeds $60,000, and is reduced to $nil when adjusted income is $80,000. The thresholds will be indexed to inflation each year.
- The farmers food donation tax credit is extended for three years to the end of 2026.
- The interactive digital media tax credit is extended for five years to August 31, 2028
Provincial Sales Tax (“PST”) Measures
PST-related measures announced in the Budget include the following:
- Effective July 1, 2023, the rules related to the collection obligations of online marketplace facilitators and the taxation of online marketplace services are amended. Specifically, online marketplace services are taxable when an online marketplace facilitator provides the service to facilitate the sale or provision of non-taxable services. The amendments do not impose new taxes on taxable goods, software, or taxable services obtained by consumers through online platforms.
- The budget confirms that PST does not apply to the federal luxury tax on purchases or leases.
- Effective March 1, 2023, automated external defibrillators (AEDs), kits containing AEDs, and parts and services for AEDs (including pads) are exempt from PST.
Other measures announced in the Budget include the following:
- Effective for transactions that occur on or after January 1, 2024, purchases of new purpose-built rental buildings will be exempt from the additional 2% property transfer tax that is applied to the fair market value of the residential component of a taxable transaction that exceeds $3 million. To qualify for the exemption, the residential portion of the building must be non-stratified with at least four apartments and held entirely for rental, on a monthly basis or longer, for at least 10 years.
- Effective April 1, 2023, carbon tax rates are increased by $15 per tonne of carbon dioxide equivalent emissions annually until reaching $170 per tonne in 2030.
If have any questions or would like further information on how the 2023 Provincial Budget might impact you, please contact your Smythe advisor.