Building on B.C.’s COVID-19 Action Plan, the Province is making temporary changes to B.C.’s property tax framework to provide financial support for businesses and local governments.
“We know that B.C. communities and businesses are suffering from the economic impacts of COVID-19,” said Carole James, Minister of Finance. “That is why our B.C. COVID-19 Action Plan is focused on the health and safety of British Columbians, direct support for people and businesses and economic recovery for our province. We are providing further support by making additional temporary property tax changes to provide provincewide relief for business and local governments to help weather the pandemic, continue to deliver the services people count on and be part of our province’s economic recovery.”
Property tax measures for local governments:
- Local governments will have the ability to borrow, interest-free, from their capital reserve funds, freeing up billions in assets to cover temporary revenue shortfalls. They will have up to five years to build back the reserve funds.
- Municipalities will be able to access school tax revenue collected for the Province until the end of the year. If a local government chooses to hold onto the school property tax, it must first be used to pay other taxing authorities, including regional districts.
- Working closely with the Municipal Financing Authority (MFA), local governments will be able to extend their revenue anticipation borrowing for a second year past the current limit of one year. To minimize impacts on the MFA, the Province is asking local governments to first use the delayed school property tax payment and their own capital reserve funds before seeking short-term borrowing through the MFA.
- Municipalities will still be required to make all their required remittances to other taxing authorities. Additionally, municipalities will be required to make the full annual payment to TransLink and BC Assessment in August 2020, rather than August and December.
Property tax measures for B.C. businesses:
- further reducing the school property tax rate for commercial properties to achieve an average 25% reduction in the total property tax bill for most businesses, providing up to $700 million in relief. This enhances the 50% reduction to the provincial school property tax rate that was originally announced for classes 4, 5, and 6 as part of B.C.’s COVID-19 Action Plan.
- Postponing the date that late payment penalties apply for commercial properties in classes 4,5,6,7 and 8 to Oct. 1, 2020, to give businesses and landlords more time to pay their reduced property tax, without penalty.
Breakdown of tax relief for B.C. businesses:
- Major industry (property class 4)
- Budget 2020 mill rate: 3.72
- March 23 mill rate: 1.86
- April 16 mill rate: effectively zero
- Tax cut as a per cent of total tax bill: 4%
- Light industry (property class 5)
- Budget 2020 mill rate: 3.72
- March 23 mill rate: 1.86
- April 16 mill rate: 1.0561
- Tax cut as a per cent of total tax bill: 25%
- Business/other (property class 6)
- Budget 2020 mill rate: 3.72
- March 23 mill rate: 1.86
- April 16 mill rate: 1.1070
- Tax cut as a per cent of total tax bill: 25%
- Managed forest (property class 7)
- Budget 2020 mill rate: 1.87
- March 23 mill rate: 1.87
- April 16 mill rate: effectively zero
- Tax cut as a per cent of total tax bill: 20%
- Recreation and non-profit (property class 8)
- Budget 2020 mill rate: 2.29
- March 23 mill rate: 2.29
- April 16 mill rate: 0.7844
- Tax cut as a per cent of total tax bill: 25%
Changes to British Columbia’s property tax framework are in addition to measures announced as part of B.C.’s Action Plan to support businesses, including:
- Effective immediately, many provincial tax filing and payment deadlines are deferred to Sept. 30, 2020.
- Businesses with a payroll over $500,000 can defer their employer health tax payments until Sept. 30, 2020. Businesses with a payroll under this threshold are already exempt.
- Payments for provincial sales tax (PST), employer health tax, municipal and regional district tax on short-term accommodation, carbon tax, motor fuel tax and tobacco tax are also deferred.
- The scheduled increase to the carbon tax rate, and application of PST to e-commerce transactions and sweetened and carbonated drinks, will be delayed.
COVID-19 Support Service For B.C. Businesses
The province is also launching B.C. Business COVID-19 Support Service that will serve as a single point of contact for businesses throughout the province looking for information on resources available during the COVID-19 pandemic.
The B.C. Business COVID-19 Support Service will be operated by Small Business BC (SBBC).
Starting on Thursday, April 16, 2020, advisors are available Monday to Friday, from 8 a.m. to 6 p.m. (Pacific time) and Saturday from 10 a.m. to 4 p.m. at 1 833 254-4357. Inquiries can also be emailed to covid@smallbusinessbc.ca, or raised on the live-chat feature available on SBBC’s dedicated website.