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Effective for registrations on and after February 19, 2014 the Property Transfer Tax exemption threshold under the First Time Home Buyers’ Program is increased to $475,000 from $425,000, with the partial exemption/phase out applying between $475,000 and $500,000.

 

Government information online has already been updated: www2.gov.bc.ca/gov/topic.page?id=BBD16E2D7C1841A7BBD420E3AC5380F1.

 

The government estimates that approximately 1,700 first-time buyers will benefit this year, saving an average of $4,000 at a cost to government estimated at $8 million. According to BCREA Chief Economist Cameron Muir, who was in the budget lockup today, Minister de Jong stated that this tax measure is a “start” and a “beginning” of relief to the PTT. PTT revenue is forecast to decline 10.6% in 2014/2015, before increasing at 1.2% in each of the following years.

 

Fiscal year

Forecast PTT revenue

2013/2014

$899 million

2014/2015

$804 million

2015/2016

$820 million

2016/2017

$834 million

 

Home Owner Grant

For the 2014 tax year, the Home Owner Grant threshold for phase out will be decreased from $1,295,000 to $1,100,000. For properties valued above the threshold, the grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold. The threshold captures at least 93.8% of homeowners as opposed to 95% previously. The measure is estimated to provide an additional $11 million in revenue.

 

And these are Cameron’s other observations on the budget:

 

The BC government’s “Balanced Budget 2014” is both fiscally conservative and surplus oriented. In addition to a conservative economic growth forecast (2% in 2014, 2.3% in 2015 and 2.5% in 2016), the projected surplus (see table below) is cushioned by a doubling of the forecast allowance, after falling to just $100 million in 2013/2014.

 

Fiscal year

Forecast surplus

2013/2014

$175 million

2014/2015

$184 million

2015/2016

$206 million

2016/2017

$451 million

 

The budget also incorporates expense contingencies of $300 million, $400 million and $575 million over the next three years. After climbing to 18.5% (Ontario=37.4%/Canada=33%), the ratio of debt-to-GDP in the province is forecast to decline to 17.8% over the three-year fiscal plan.

 

Other tax measures include:

  • Increasing tobacco tax by 32 cents per pack, raising an estimated $50 million (Note: Federal government raised tobacco taxes by 40 cents per pack at last budget).
  • New Early Childhood Tax Benefit of $55 per month per child under six years of age effective Apr. 1, 2015.
  • Extend BC mining flow-through share tax credit, Jan. 1, 2014.
  • Phase out corporate income tax preference for credit unions, Jan. 1, 2016.
  • Extend Distant Location Tax Credit to Capital Regional District, Feb. 19,v2014.
  • Extend Scientific Research and Experimental Development Tax Credit, Sep. 1, 2014.
  • Increase Medical Services Plan premiums and enhance premium assistance, Jan. 1, 2015.

Full budget information available online: www.bcbudget.gov.bc.ca/2014.

 

Till next time ...

 

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