BC Budget 2018

Chris

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Chris Eynon

Financial Advisor, Director

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BC Finance Minister Carole James has released the NDP’s first full budget. The Finance Minister said that the intent is to “include historic investments in child care and affordable housing that will be felt for generations”.

As such, a primary focus of this budget was to try to address the heated housing market. The previous government measures focused primarily on Metro Vancouver housing prices. The tax applies in the Metro Vancouver Regional District (excluding Bowen Island and Electoral Area A, except the part of the electoral area that is the UBC and University Endowment Lands), the Capital Regional District (excluding the Gulf Islands and Juan de Fuca), Kelowna-West Kelowna, Nanaimo-Lantzville (excluding Protection Island), Abbotsford, Chilliwack, and Mission. Most islands are excluded. The previous foreign buyer’s tax is being increased from 15% to 20%. Starting this year, there will also be a new speculation tax charged on homes whose owners do not pay taxes in British Columbia. The tax is to start at 0.5% and will rise to 2% in 2019. Property transfer tax will rise to 5% on properties worth more than $3 million. The BC NDP hope that these measures will lower the price of housing to make owning a home more realistic for many BC residents.

Child care costs have been a priority for the BC NDP. To address this, they are making a 1 billion dollar investment over three years towards child care. There will be a child care benefit up to $1,250 per month for an infant in a low income household. The intent is to make child care costs effectively free for a family that earns less than $45,000 per year. The benefit will be reduced based on the age of the infant and the net income of the family.

MSP premiums have been reduced by 50% for all British Columbians and are expected to be fully eliminated by January 1, 2020. This will be offset by a new BC payroll tax. This annual payroll tax will be collected on corporations with payrolls in excess of $500,000.

The Fair Pharmacare (prescription drug assistance) program will see some changes. Families with an annual net income below $30,000 will have their deductibles eliminated and families with net incomes of less than $45,000 will see a reduction in deductibles.

The high-end luxury car market in the Lower Mainland has been as hot as the housing market. If you purchase a car costing in excess of $125,000 after April 1st, you will see in increase in the PST charges. Vehicles with a purchase price between $125,000 and $149,000 will see an increase from 10% to 15% and with purchase prices above $150,000, the tax will jump to 20%.

Fares for ferry travel in BC will be frozen on all major routes. Some smaller routes will see a reduction in fares. Also, the much-loved seniors discount will be restored for trips taken between Mondays and Thursdays.