B.C. Budget 2026: Key Tax Changes You Need to Know

The Province of British Columbia has officially released Budget 2026. While the focus remains on protecting healthcare and education, several tax adjustments have been introduced that will impact individuals and businesses across the province.

Here are the most significant updates:

1. Personal Income Tax Adjustments

• Income Tax Rate Increase: The tax rate for the first income tax bracket will increase from 5.06% to 5.60%. For the average taxpayer, this represents an increase of approximately $76 for the 2026 tax year.
• Tax Bracket Indexing Paused: To help manage the provincial deficit, the government will pause the indexing of tax brackets from 2027 until 2030.
• BC Tax Reduction Credit: Despite the rate increase, over 40% of taxpayers may see savings due to an increase in the B.C. tax reduction credit, which aims to support low-to-middle-income earners.

2. Real Estate & Property Taxes

• Speculation and Vacancy Tax (SVT): Starting in the 2027 tax year, the SVT rate for foreign owners and untaxed worldwide earners will rise to 4% (up from 3%).
• Additional School Tax: Rates for high-value properties are increasing for the 2027 tax year:

                0.3% for property values between $3 million and $4 million.

                0.6% for property values above $4 million.

3. Sales Tax (PST) Expansion

Beginning October 1, 2026, B.C. is expanding the PST base to include professional services that were previously exempt. This includes:

• Accounting, bookkeeping, and legal services.
• Architectural, engineering, and geoscientist services.
• Non-residential real estate services, including trading services, rental property management services and strata management services
• Security services, including private investigation services
• PST exemptions are also being removed for clothing repair materials, basic cable television services and land-line telephone services.

4. Business Incentives

Manufacturing Investment Credit: A new temporary 15% refundable tax credit has been introduced for businesses investing in buildings, machinery, and equipment used in manufacturing and processing.

• Shipbuilding Credit: The Shipbuilding and Ship Repair Industry Tax Credit has been extended until the end of 2027.

Final Thoughts These changes reflect the government's effort to balance a significant deficit while maintaining front-line services. If you are a business owner or a homeowner with high-value property, now is the time to review your financial planning for the coming years.