How the B.C. budget hits your family's pocketbook
Published Tuesday, February 21, 2012 5:30PM PST
First-time homeowners will now be eligible for a tax credit of up to $10,000, Finance Minister Kevin Falcon announced Tuesday as he rolled out a provincial budget that offered up goodies for home buyers, seniors and parents.
People buying a brand new or substantially renovated home will be allowed to claim a one-time refundable personal income tax credit worth up to $10,000.
Falcon said the measure should open up opportunities for new buyers to get into B.C.'s red-hot real estate market.
"We all recognize our children and grandchildren have a challenge trying to get into their first home," he told reporters in Victoria.
The credit is eligible to families that earn less than $250,000 a year and plan to live in the home. The amount of credit decreases based on net income. The bonus is equal to five per cent of the purchase price, to a maximum of $10,000. It only applies to newly built homes subject to the HST, and homes that have been more than 90 per cent renovated.
The home buyer bonus is effective from now until March 31, 2013.
The news builds on last week's announcement that the province would raise the HST threshold from $525,000 to $850,000 for new housing.
"Together, these measures serve the dual purpose of giving consumers a break, while supporting the new home and construction sectors," Falcon said.
Starting April 1, recreational homes and secondary properties will also be eligible for a homeowner grant.
The budget also provides relief for the home renovation industry, which has been hurting from the effects of the harmonized sales tax.
The BC Seniors' Home Renovation Tax Credit, effective this year, is a credit of up to $1,000 to help with the cost of permanent home renovations for people aged 65 and older.
Falcon says the measures are designed to offset the costs of structural changes like hand rails, wheelchair ramps or walk-in bathtubs. Family members who share their home with an elderly relative can also claim the renovation credit, provided that the money goes towards upgrades to help the senior, such as constructing a first-floor suite.
Art Kube of the Council of Senior Citizens' Organizations of B.C. says the tax credit is a "disappointment" because seniors would have to spend $10,000 on renovations to receive the full allowance.
"That means no furnace. No new refrigerator. Thousands of seniors don't have that kind of money," he told CTV's Steele on Your Side.
The province will exclude standard appliances from eligibility, as well as general home maintenance, including roof and window repairs, flooring and painting. Services like homecare and housekeeping are also excluded.
Also effective this year is a "modest" Children's Fitness Credit and Children's Arts Credit. The program mirrors a federal program that gives a tax credit to eligible arts and sports spending for children.
Families will now qualify for modest tax credits of up to $25 per child, per year for any eligible sports program, and another $25 for approved arts programs.
The non-refundable tax credit is 5.06 per cent for expenditures of up to $500 for each child.
Falcon said that combined with federal credits, which give 15 per cent for arts and sports expenditures, families with three children would find a cost savings of up to $300 a year.
However, critics noted that the federal program's credits greatly outweigh those of B.C.'s.
It wasn't all good news in the budget for consumers, with Falcon announcing an increase in health premiums for the fourth year in a row.
MSP premiums will rise an additional four per cent in 2013 – an increase of $60 a year for families with three or more people. That's on top of the six-per-cent hike that went into effect on Jan. 1.
ICBC also hiked its basic insurance rates by 11.2 per cent on Feb. 1 – an extra $68 a year. Those rate hikes were offset by a decrease in optional insurance coverage.
BC Hydro rates will also soon rise. The corporation has been granted an interim rate increase of seven per cent starting April 1.
Driving will be more expensive this year, too. On July 1, the provincial carbon tax will rise another one cent a litre. That's on top of the additional two cents a litre Metro Vancouver drivers will have to pay to help fund the new Evergreen rapid transit line.
Lynda Steele is live at the B.C. Legislature with how the budget will affect your pocketbook. Watch CTV News tonight at 5 and 6 for more…