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

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

Some of the hundreds of pounds of trash removed by divers last month from Abbotsford’s Walmsley Lake.(Henry Wang photo)
VIDEO: Divers remove 462 pounds of trash from Abbotsford lake

Walmsley Lake dive uncovers several tires, hundreds of drink containers and a tent

Comedian and ventriloquist Jeff Dunham is scheduled to bring his Seriously? tour to Abbotsford Centre on Nov. 4 after it was cancelled twice in 2020 due to the pandemic.
Jeff Dunham’s ‘Seriously?’ tour rescheduled for Abbotsford Centre

Show set for Nov. 4 after twice being cancelled due to COVID-19 pandemic

Excerpts from a conversation between Bria Fisher and the fake truLOCAL job. Fisher had signed a job agreement and was prepared to start work for what she thought was truLOCAL before she learned it was a scam. (Contributed)
Harrison woman warning others after losing $3,000 in job scam

Bria Fisher was hired by what she thought was a Canadian company, only to be out thousands

Once a star player with the University of the Fraser Valley women’s basketball team, Kayli Sartori is moving into a new role coaching the next generation of Cascades. (UFV photo)
Chilliwack’s Kayli Sartori goes from court to coach with UFV basketball Cascades

Sartori is taking a new path as part of the U-Sports female basketball apprentice coaching program

Once again Fraser East is among the health service delivery areas with the highest rate of COVID-19 transmission in the province. (Datawrapper)
Fraser East sees third highest rate of COVID-19 cases in B.C.

The region is seeing a sustained increase in new COVID-19 cases

(The Canadian Press)
‘Worse than Sept. 11, SARS and financial crisis combined’: Tourism industry in crisis

Travel services saw the biggest drop in active businesses with 31 per cent fewer firms operating

Montreal Canadiens right wing Paul Byron (41) fights for control of the puck with Vancouver Canucks defenceman Quinn Hughes (43) during first period NHL action in Vancouver, Monday, March 8, 2021. THE CANADIAN PRESS/Jonathan Hayward
Captain Clutch: Horvat nets shootout winner as Canucks edge Habs 2-1

Vancouver, Montreal tangle again on Wednesday

A special committee has been appointed to look at reforming B.C.’s police act and is inviting the public to make submissions until April 30, 2021. (Black Press media file)
Have thoughts on B.C.’s review of the provincial Police Act?

Submissions will be accepted until April 30

Cottonwoods Care Home in Kelowna. (Google Maps)
New COVID-19 outbreak at Kelowna care home includes fully vaccinated seniors: Henry

Two staff and 10 residents tested positive at Cottonwoods Care Centre

Trent Miner is returning to the Vancouver Giants, the team announced. He has been released by the Colorado Eagles of the AHL.(Rik Fedyck/Vancouver Giants)
Trent Miner returns to play goal for Vancouver Giants

Netminder was part of epic 11-game winning-streak by Langley-based team

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Provincial health officer Dr. Bonnie Henry and Health Minister Adrian Dix provide a regular update on the COVID-19 situation, B.C. legislature, March 2, 2020. (B.C. government)
B.C.’s COVID-19 cases: 545 Saturday, 532 Sunday, 385 Monday

Focus on Prince Rupert, Lower Mainland large workplaces

Rising accident rates and payout costs have contributed to billion-dollar deficits at ICBC. (Comox Valley Record)
B.C. appealing decision keeping ICBC injury cases in court

David Eby vows to ‘clip wings’ of personal injury lawyers

Most Read