Since the February 2009 BC Budget, the severity of BC’s recession
has meant $1.2 billion less in personal, corporate and sales
tax revenues and $826 million more in expenses. The province
now estimates our deficit at a record $2.8 billion.
To help lead the province out of recession, the September
Budget Update, released on September 1, includes spending
cuts and new taxes.
Highlights for home buyers
How does the September Budget Update affect home buyers?
Home costs rise with the Harmonized Sales Tax (HST)
A home buyer planning to buy a new home priced at $600,000,
will pay $638,824 because the new HST (the 12 per cent
harmonized sales tax minus the $20,000 rebate and the two
per cent embedded PST that builders can claim as an input tax
credit).
The home buyer will pay the 12 per cent HST on a wide range
of goods and services from closing costs to real estate commissions
to renovations. (For information see The Open House,
August 14, 2009, which includes a feature on the HST).
Services decline
Cuts to capital projects, services and grants will affect the quality
of life in our communities in many ways, for example school
maintenance and equipment purchases may be deferred.
College or university tuitions will likely rise and students will
have reduced access to student aid, including fewer bursaries
and loans.
Healthcare costs rise
Residents will pay six per cent more for Medical Services Plan
premium, which amounts to $6 per month for their family, or
$72 per year for the next three years.
Programs gone or soon to be
Reconstruction loan program
As of now, the Reconstruction Loan Program, administered by
the Homeowner Protection Office for owners of leaky condo-
miniums built before July 1, 1999 has been discontinued. For
information, visit: www.hpo.bc.ca.
Your Window to REBGV Government Relations
The OPEN House
September 11, 2009 Volume 4 • Number 9
September Budget Update
Energy efficient rebates
Currently there are PST exemptions for ENERGY STAR® qual-
ified residential heating equipment, windows, doors and sky-
lights. These exemptions will disappear when the HST comes
into effect, July 1, 2010, since there are no similar federal rebate
programs.
The good news
Residential heating costs
Residents will not pay the provincial portion of the 12 per cent
HST on residential energy, including natural gas, heating oil,
electricity or other energy costs for heating, saving seven per
cent. Residents will pay the federal GST of five per cent. The
government is also eliminating the Clean Energy levy now
added to monthly energy bills.
Small business income tax threshold
The threshold will increase to $500,000 from $400,000 as of
January 1, 2010. This measure is estimated to save small business
in BC $20 million annually. The small business tax will be
eliminated by April 1, 2012.
Income tax
Effective January 1, 2010, the basic personal credit for provincial
income tax increase 17 per cent to $11,000 from $9,373.
Residents earning up to $118,000 will have the lowest personal
income tax in Canada.
Jobs
During the next three years, the government will build roads,
highways, bridges, healthcare facilities and other infrastructure
in a $14 billion program with the federal and local governments,
expected to create 88,000 much needed jobs. Since February
2009, 480 projects worth $3.4 billion have been announced,
creating 21,600 jobs.
Health care
If your client becomes ill with the H1N1 flu, there are resources.
The government will spend $80 million in 2009 alone for H1N1
flu preparation. It will also spend $641 million for the Medical
Services Plan to fund and retain new physicians and specialists
and lab services. And there will be Medical Service Plan
premium assistance for lower income individuals and families,
saving, for example, a low-income couple $460.80 per year.