On March 4, 2025, Minister of Finance Brenda Bailey presented British Columbia’s 2025 budget. Somewhat overshadowed by the latest developments in an escalating trade war between Canada and the United States, this year’s announcement included measures to strengthen the healthcare system, improve education, address the rising cost of living and housing affordability, foster community safety, and diversify the province’s economy.
Amidst the economic uncertainty created by the potential impact of U.S. tariffs and Canada’s retaliatory measures, the budget projects a startling deficit of $10.9 billion for 2025–26.
Several noteworthy tax measures are included in this year’s budget, as summarized below.
Speculation and Vacancy Tax Measures
The government announced increases to its speculation and vacancy tax (SVT) rates—one of only a few significant measures introduced to address the province’s ongoing housing crisis.
Effective January 1, 2026, the SVT rate for most Canadian citizens and permanent residents will rise from 0.5% to 1%, and the rate for foreign owners and untaxed worldwide earners will increase from 2% to 3%. The corresponding nonrefundable SVT credit available to eligible residents of the province will also be doubled to $4,000.
In addition, the Predator Ridge resort (in Vernon) will be excluded from the SVT specified area, retroactive to January 1, 2024, and the legislation will be amended to allow opinions from nurse practitioners to be accepted in support of health-related exemptions, retroactive to January 1, 2019.
Property Tax Measures
While no major property tax changes were included in this year’s budget, the government did announce exemptions for the following:
- Property transfer tax on transfers of legal ownership to a First Nation where the property is already beneficially owned by the First Nation, effective May 21, 2024
- Annual rural property tax and provincial school property tax on eligible properties used by First Nations for only cultural or community purposes (or assessed as having no present use), effective for 2026
- Annual rural property tax on lands and improvements in rural areas in treaty-designated foreshore areas owned or held by Modern Treaty First Nations or related public institutions, effective for 2026
Provincial Sales Tax Measures
Used Zero-Emission Vehicle Exemption Eliminated
The province will eliminate the existing provincial sales tax (PST) exemption for used zero-emission vehicles, effective May 1, 2025, rather than in 2027 as originally planned.
Clarification Regarding Vehicle Imports
The budget documents indicate that a technical amendment will be introduced to clarify that the PST payable on a vehicle brought into British Columbia and registered for use by a person is to be reduced by any PST previously paid by that person.
Carbon Tax Measure
Beginning April 1, 2025, the province’s carbon tax rates will increase by $15 per tonne to $95 per tonne of carbon dioxide equivalent emissions. This increase is consistent with federal carbon pricing requirements, and the government has committed to eliminating its provincial carbon tax once the federal government removes those obligations.
Corporate Income Tax Measures
Film and Television, Production Services, and Interactive Digital Media Tax Credits
The province will increase its basic film and television tax credit from 35% to 40% and its basic production services tax credit from 28% to 36%, effective for productions with principal photography starting on or after January 1, 2025.
In addition, the province’s interactive digital media tax credit will be made permanent and increased to 25% for eligible salaries and wages incurred in British Columbia on or after September 1, 2025.
Furthermore, amendments will be introduced to allow animation productions with a brick-and-mortar presence to claim supplemental regional and distant location tax credits, effective January 1, 2025, subject to certain conditions.
Major Production Tax Credit
The budget also includes the introduction of a new major production tax credit, which will be available upon production completion to existing production services tax credit claimants with eligible production costs in British Columbia exceeding $200 million, where principal photography for the production started on or after January 1, 2025.
Clean Buildings Tax Credit Extension
The province has extended the deadline for incurring qualifying expenditures under its clean buildings tax credit to March 31, 2026.
More Information
Further information on British Columbia's 2025 budget may be found on the province’s website.
To read key updates from all of Canada’s latest provincial budgets, please visit our Key Changes | 2025 Canadian Federal and Provincial Budgets page.
If you have any questions about how these proposed changes might impact your organization, please do not hesitate to contact Ryan TaxDirect® at taxdirect@ryan.com or 1.800.667.1600.