Update: BC Mini Budget – Sep 05
The general corporate income tax rate is reduced to 12% from 13.5%, effective July 1, 2005. The general rate applies to investment income, income of public and non-Canadian controlled private corporations (CCPCs), income of CCPCs with paid-up capital exceeding $10 million, and active business income of CCPCs exceeding $400,000.
The Mini-Budget also provides an additional $242 million over three years to improve the lives of senior citizens. New measures include:
- Renewing the Seniors’ Supplement, to provide a monthly benefit for approximately 40,000 low income seniors
- Doubling annual funding for the Shelter Aid for Elderly Renters (SAFER) program, to improve subsidies for lower income seniors who rent, and expand coverage to those who own manufactured homes and pay monthly pad rentals; the changes open the program to an additional 7,200 senior citizens
NEW TAX CREDIT
Effective 2005, a new provincial credit is introduced worth up to $360 for low income residents. The credit phases out between net incomes of $16,000 and $26,000.
The provincial rules were changed to mirror the federal budget of March 2004.
SMALL BUSINESS TAX RATES
The province continues to stay one step ahead of the feds with the preferential tax rate for active small businesses. They started by increasing the limit to $300,000 a few years ago. The feds are just catching up to that effective December 2005. But now the province has raised the bar again, this time to $400,000. The increase is phased in and takes full effect in December 2005.
MSP PREMIUM ASSISTANCE
Single persons with net incomes of $20,000 or less will pay no BC MSP health premiums, and those earning up to $28,000 will pay lower premiums. Senior couples and families of four with net incomes of $29,000 or less will pay no premiums, and those with net incomes up to $37,000 will pay lower premiums.
HOME OWNER GRANT EXEMPTION
The home owner grant exemption limit has been increased from $585,000 to $685,000 and the phase out calculation is improved from 1% to .05% above the new limit.
PST ON PASSENGER VEHICLES
B.C. PST on passenger vehicles is charged at rates from the standard 7% through 10% for more expensive vehicles. All of the brackets have been increased by $2,000.