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BCREA Delivers Overview Of New BC Budget

On February 21, BC Minister of Finance Kevin Falcon released the 2012-2013 provincial budget.

With a theme of fiscal discipline, this budget doesn’t offer a lot of new spending. In addition to some hikes in fees for MSP and ICBC, the government plans to raise more than $700 million in the next three years by selling government-owned properties that aren’t needed now or in the foreseeable future. Minister Falcon projects budget surpluses for 2013-2014 ($154 million) and 2014-2015 ($250 million)—government forecasts continue to be conservative, with growth forecasts coming in below the consensus of the independent economic forecast council, of which BCREA Chief Economist Cameron Muir is a member. Jobs, health and education were emphasized throughout the minister’s speech.

Here are the new pieces relevant to the real estate sector:

• Property Transfer Tax

o BC First-Time New Home Buyers’ bonus – Pending approval by the legislature, a temporary (Feb. 21, 2012-Mar. 31, 2013), refundable income tax credit of up to $10,000 will be available to first-time buyers of newly-built homes. 

o Fact sheet: 


o Web page:  www.sbr.gov.bc.ca/individuals/Income_Taxes/Personal_Income_Tax/tax_credits/fthb_bonus.htm 
This is a win for BCREA and member boards, and this measure should be considered with the HST relief measures announced on Feb. 17. While it’s difficult to determine the stimulus effect this bonus will have, and it remains to be seen whether financial institutions will create financing products that take the tax credit into account, this is an indication that the minister has heard organized real estate’s concerns.

o New General Refund Provision Introduced – Bill 21 (introduced on Feb. 21) proposes amending the Property Transfer Tax Act to provide the administrator with authority to refund an amount paid under the Act in circumstances where there was no legal obligation for the tax to be paid (in effect upon Royal Assent).

o Re-registration of Certain Life Estates Exempted – Bill 21 proposes amending the Property Transfer Tax Act to provide an exemption for the re-registration of a life estate following the registration of a mortgage. The exemption only applies if the re-registration of the life estate involves the same owner, the same life estate holder, the same property and the same terms as the initial life estate (in effect upon Royal Assent).

• Home Owner Grant Act

o Low-Income Veteran’s Supplement Introduced – Bill 21 proposes amendments to enact this measure, as announced on Nov. 10, 2011, effective for the 2012 and future tax years. This supplement is for qualifying low-income veterans under the age of 65 who have served in the Canadian Forces as officers or non-commissioned 
members. Tax Information Sheet:www.sbr.gov.bc.ca/documents_library/brochures/Info_Sheet_2012-01.pdf

o Home Owner Grant Extended for Individuals Moving into a Residential Facility – Effective for the 2012 and future tax years, the Act is amended to allow qualifying homeowners who have moved into a residential facility to apply for the Home Owner Grant for one additional year. The grant can only be claimed on the home that they continue to own and that qualified in the previous year. Tax Bulletin (see p. 7) :www.sbr.gov.bc.ca/documents_library/bulletins/hog_001.pdf

• BC Seniors’ Home Renovation Tax Credit – Pending approval by the legislature, effective for the 2012 and future tax years, the credit will be a new refundable personal income tax credit to assist with the cost of permanent home renovations that provide individuals age 65 and over with increased independence, allowing them the flexibility to remain in their own homes longer. The maximum credit will be $1,000 annually calculated as 10 per cent of eligible expenditures. The credit will be available to individuals who incur eligible expenditures on or after April 1, 2012. The credit can be claimed by seniors, whether they own their home or rent, and by individuals who share a home with a senior relative. Web page:

• Taxation (Rural Area) Act

o Exemption for Property Held in Trust for a First Nation Clarified – Effective for the 2012 and future tax years, Bill 21 proposes amendments to the Act to clarify that the exemption for property held in trust for a First Nation only applies with respect to property held by the Crown.

• Land Tax Deferment Act

o Fire Insurance Requirement Removed for Homeowners with Sufficient Equity – Homeowners must have a minimum amount of equity in their property to be eligible to defer their property taxes under the province’s property tax deferment program. Currently, homeowners must also have fire insurance on their home to be eligible for the program. Effective for the 2012 and future tax years, the Act is amended to remove the fire insurance requirement and to replace it with a more general requirement. In calculating whether the homeowner has a minimum amount of equity in the property, the calculation will now exclude uninsured improvements to the property.

o Eligibility of Leaseholders to Defer Tax Clarified – The property tax deferment program is intended to apply to property owners who have sufficient equity in their property to secure the deferred taxes. Some leaseholders on Crown or municipal land have qualified to defer taxes in the past. The Act is amended to clarify that beginning in 2012 no new leaseholders will be eligible to defer taxes. Any leaseholders who currently defer taxes will be grandparented and will not be affected by this change.

o About the Property Tax Deferment program: 

• The LiveSmart program was mentioned in the minister’s speech as a component of the Climate Action Plan that would continue to move forward, though details are lacking. The program supports homeowners making energy-efficient home renovations. Website:

Government budget documents are available online here: www.bcbudget.gov.bc.ca/2012.

Norma Miller
Policy Analyst
British Columbia Real Estate Association 
1420 – 701 Georgia Street West | PO Box 10123, Pacific Centre | Vancouver, BC  V7Y 1C6
604.742.2789 | 

Visit BCREA Online: www.bcrea.bc.ca | www.twitter.com/bcrea 

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