2025 BC Budget Highlights

On March 4, 2025, the B.C. government released its 2025 provincial budget, focusing on economic resilience, housing affordability, and healthcare. With a projected $10.9 billion deficit for 2025-26, the government has emphasized continued investments in public services while responding to economic pressures, including the effects of U.S. tariffs. No changes to corporate or personal tax rates were announced in this budget.

Below, we break down key tax measures, housing initiatives, business incentives, and infrastructure investments introduced in this year’s budget.

Tax measures

Speculation and Vacancy Tax (SVT) increase

Effective January 1, 2026, the SVT rates will increase:

• Foreign owners and untaxed worldwide earners: from 2% to 3%.
• Canadian citizens and permanent residents: from 0.5% to 1%.

The SVT credit for B.C. residents will also double from $2,000 to $4,000.

Employer Health Tax (EHT) exemption threshold increase

The EHT exemption threshold has been raised from $500,000 to $1 million, reducing tax obligations for small and mid-sized businesses. Businesses with payrolls under $1 million will no longer need to pay EHT starting January 1, 2026.

BC Home Flipping Tax implementation

Effective January 1, 2025, the new BC Home Flipping Tax now applies to the sale of residential properties within 12 months of purchase. The tax rate is 20% on any profits made, with exemptions for life events such as divorce, job relocation, or death. See our Property Playbook for more information on this and other residential real estate tax measures in BC.

Elimination of PST exemption on used zero-emission vehicles

The PST exemption on used zero-emission vehicles has been removed. Used electric vehicles will now be subject to standard PST rates, aligning taxation with that of new electric vehicles.

Personal and business tax credits

BC Family Benefit extension

Effective January 1, 2025, the BC Family Benefit will continue payments for six months following the death of a child, aligning with federal changes to the Canada Child Benefit.

Small Business Venture Capital Tax Credit increase

Effective for 2025 and subsequent taxation years, the annual credit limit that an individual can claim for investments made on or after March 4, 2025, has increased from $120,000 to $300,000.

BC Training Tax Credit extension and amendments

The B.C. Training Tax Credit, originally set to expire in 2024, has been extended to 2028. Effective April 1, 2025, eligible First Nations individuals or persons with a disability will continue to receive the enhanced credit even after the federal Apprenticeship Incentive Grant expires on March 31, 2025.

Film and Television Tax Credit adjustments

The basic Film Incentive BC Tax Credit will increase to 40% (from 35%), and the basic production services tax credit will increase to 36% (from 28%). These new rates apply to productions with principal photography beginning on or after January 1, 2025.

A new Major Production Tax Credit has been introduced for productions with B.C. production costs of at least $200 million. The credit is equal to 2% of a corporation’s accredited qualified B.C. labour expenditures for the major production and will be available upon completion of the project.

The Regional and Distant Location Tax Credits have been amended to allow animation productions with a brick-and-mortar presence in a regional or distant location to claim the supplemental credits. These changes apply to productions with principal photography starting on or after January 1, 2025.

Interactive Digital Media Tax Credit increase and permanence

The Interactive Digital Media Tax Credit will increase to 25% (from 17.5%) for eligible salaries and wages paid in B.C. on or after September 1, 2025. The credit, originally scheduled to end by September 1, 2028, has been made permanent.

Clean Buildings Tax Credit extension

The deadline for qualifying expenditures for the temporary Clean Buildings Tax Credit has been extended by one year to March 31, 2026, to support energy-efficient building upgrades.

Climate Action Tax Credit unchanged

Despite the annual increase to the carbon tax of $15/tonne, the Climate Action Tax Credit amounts remain unchanged at the 2024-2025 rates:

• $504 for an adult
• $252 for a spouse or common-law partner
• $126 per child

Business incentives and economic development

BC Manufacturing Jobs Fund expansion

The BC Manufacturing Jobs Fund will receive an additional $50 million, bringing total funding to $180 million over the next three years. This program helps local manufacturers modernize, expand, and increase production.

Industrial electrification incentives

The government is allocating $300 million to expand industrial electrification projects, supporting businesses transitioning away from fossil fuels and reducing greenhouse gas emissions.

Financial and affordability measures

Rental assistance increase

The Rental Assistance Program (RAP) and shelter aid for elderly renters (SAFER) program will see monthly supplement increases to better support lower-income families and seniors facing rising rental costs.

ICBC rebate and rate freeze

Drivers will receive a one-time ICBC rebate of $110, with rates frozen through 2026 to provide relief from rising insurance costs.

For a more detailed list of the tax measures and changes announced on March 4, visit the Government of BC website. Contact your DMCL advisor if you have any questions about how these changes might affect you or your business.