Finance Minister Mike de Jong presents the 2016-17 budget in the B.C. legislature Tuesday.

BC BUDGET HIGHLIGHTS: Real estate, MSP, disability benefits

Luxury tax on new homes over $2 million, children exempted from rising medical fees, prosperity fund without LNG revenues

Property transfer tax trimmed

Newly built homes worth up to $750,000 are exempt from B.C.’s property transfer tax under changes in the provincial budget that take effect immediately.

Finance Minister Mike de Jong expects to make up most of the lost revenue by increasing the tax rate from two to three per cent on the value of homes in excess of $2 million.

For resold homes, property purchase tax continues to apply at one per cent on the first $200,000 of value and two per cent on value between $200,000 and $2 million.

The tax has produced a windfall for the province and pushed home purchase costs even higher in the hot market for homes in some urban areas. The government expects to collect about $200 million more than it budgeted for the current year, due to soaring prices and a high number of sales.

De Jong said the break is aimed at new construction to stimulate new housing construction, adding to supply in response to demand that is driving prices up.

The exemption is only available to Canadian citizens and permanent residents, and the government is resuming tracking nationality of buyers, a practice stopped in 1998.

The upper limit to qualify for the homeowner grant is also increased from $1.1 million to $1.2 million for the 2016 property tax year.

Children exempted from MSP premiums

Medical Services Plan premiums are being charged only for adults starting in 2017, and the qualifying income for reduced premiums is going up from $30,000 to $42,000 for single people.

The new system creates a break for single parents, who will pay a single adult rate of $78 a month  instead of the current rate of $150 charged for a family of three. A single senior or single parent with one child and an income of $45,000 may also be eligible for reduced premiums.

The changes will reduce rates for an additional 335,000 people, and 45,000 more people will be exempted from paying as long as they are registered and qualify. But rates overall continue to rise. With a four per cent increase in personal rate this year and growing population, the government expects to collect more MSP each year of its three-year budget plan than with the current system.

B.C. is the only province that charges premiums for health services, and the NDP opposition has called for them to be eliminated as a regressive tax. De Jong argues that MSP covers only 14 per cent of a growing health care budget, and eliminating it would amount to hiding the cost in the general tax system.

Prosperity fund gets seed money

With liquefied natural gas export projects delayed, Premier Christy Clark’s promise of a “B.C. Prosperity Fund” has been launched with $100 million from the current budget surplus.

The fund was touted in the 2013 election as a way to pay off debt starting in 2017, and reduce or even eliminate B.C.’s sales tax with revenues from five LNG plants. But with a glut of oil and gas internationally, no major project is expected to be under construction by the 2017 election.

Including the fund in his 2016-17 budget, Finance Minister Mike de Jong said most people would agree with “the notion that we would take a modest amount of money out of our chequing account and put it in our savings account.”

The finance ministry expects a surplus of $377 million at the end of the current fiscal year and $264 million in the fiscal year that begins April 1.

The prosperity fund is restricted to a minimum 50 per cent to pay down debt, 25 per cent saved to earn interest and the rest available to spend on health care, transportation and other government functions.

Disability benefits up $77 for some

Income assistance payments for people with disabilities are to increase up to $77 per month effective Sept. 1, but transit passes will no longer be covered.

Bus passes have only been provided for some regions of the province, an unfair situation for those who can’t take advantage of transit, said Finance Minister Mike de Jong. The increase will be across the board and recipients can choose for themselves if they use it for transit or other needs.

The B.C. Liberal government has resisted calls for an increase in the general social assistance rate, but has ended the clawback of child support payments to single parents.

Since 2012 the government has moved to encourage income assistance recipients to work, allowing earnings up to $200 a month without losing benefits for those who file tax returns.

People on disability assistance can retain up to $800 a month, up from $500 in 2012.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

South Surrey boy, 11, hopes to raise $3,000 for Sources – and be Prime Minister

White Rock Coldest Night of the Year event to take place Feb. 22

Recharged Sharks aim for playoffs after ‘well-earned’ break

Bayside rugby club mixes youth with returning veterans in quest for men’s Div. 1 title

Pedestrian fatality in Surrey

Police are investigating at 183 Street and Highway 10

Spring is looming – what are you most looking forward to?

Spring is looming – what are you most looking forward to?… Continue reading

VIDEO: Minister reports ‘modest progress’ after blockade talks with First Nation

Wet’suwet’en hereditary chiefs say Coastal GasLink does not have authority to go through their lands

Henrique scores 2 as Ducks soar past Canucks 5-1

Vancouver tumbles out of top spot in Pacific Division

Trudeau cancels Caribbean trip amid pipeline protests across Canada

Protests against Coastal GasLink have disrupted rail service

B.C. VIEWS: Inaction on pipeline protests not a viable response

Columnist Frank Bucholtz on how the Coastal GasLink pipeline dispute got so bad

PHOTOS: Top 10 memories of the 2010 Olympics

Black Press Media’s Jenna Hauck, shares some of her most memorable images of 2010 Winter Games

#FoxForFiver: Support grows in B.C. to put Terry Fox on new $5 bill

Terry Fox’ Marathon of Hope raised money for cancer research

Registration opens soon for BC 55+ Games in Richmond

2020 55+ Games have been officially scheduled for Sept. 15 to 19

Trudeau confers with cabinet ministers as rail blockades continue

The Trudeau government has been criticized for not doing more to end the blockades

VIDEO: Vancouver Giants make it nine straight

Roman scores hat trick as team dominates Seattle

Most Read