BC Provincial Tax Rates: PST, Property Transfer, and Exemptions

British Columbia’s provincial tax rates run across several separate taxes: a progressive personal income tax from 5.60% up to 20.50%, a 7% provincial sales tax on most goods, property transfer tax scaling from 1% to 3% with surcharges on high-value and foreign purchases, an employer health tax that tops out at 1.95% of payroll, and a handful of targeted taxes and credits. The carbon tax was eliminated on April 1, 2025.

Personal Income Tax Rates for 2026

If you live in BC on December 31, you owe provincial income tax on your worldwide income for the year under BC’s Income Tax Act.¹ The system is progressive, so each dollar is taxed at the rate for the bracket it falls into, not at your top rate overall.

For 2026, brackets rose 2.2% over 2025 to reflect BC’s Consumer Price Index. The current rates:²

5.60% on the first $50,363
7.70% on $50,363.01 to $100,728
10.50% on $100,728.01 to $115,648
12.29% on $115,648.01 to $140,430
14.70% on $140,430.01 to $190,405
16.80% on $190,405.01 to $265,545
20.50% on income above $265,545

The bottom rate moved from 5.06% in 2025 to 5.60% for 2026, which is a real rate change rather than an inflation adjustment.²

Provincial Sales Tax

PST applies at 7% on most tangible goods, software, and certain services purchased or used in British Columbia.³ You also owe PST when you bring taxable goods into BC for your own use. Combined with the 5% federal GST, most retail purchases are taxed at 12%.

Rates Above the Standard 7%

Liquor with more than 1% alcohol content is taxed at 10% PST.⁴ Vehicles follow a tiered structure. A non-zero-emission passenger vehicle bought from a dealer is taxed at 7% under $55,000, then rises through 8%, 9%, and 10%, hits 15% between $125,000 and $149,999, and reaches 20% at $150,000 and above. Private-sale vehicles are taxed at a flat 12% under $125,000, and 15% or 20% above that.⁵ Zero-emission vehicles get slightly higher thresholds before the luxury rates apply, with the 7% rate extending up to $74,999 from a dealer.

Common Exemptions

Food for human consumption is exempt, covering fresh produce, meat, canned goods, snacks, and non-carbonated beverages. Soda beverages are taxed at 7%. Prescription drugs, vaccines, dental and optical appliances sold on prescription, and children’s clothing and footwear are exempt.⁴ Qualifying manufacturers and clean energy producers can claim exemptions on production machinery and equipment if they meet minimum sales or production cost thresholds.⁶

Property Transfer Tax

When a property changes hands and a new title is registered at a BC Land Title Office, the buyer owes property transfer tax on the fair market value:⁷

1% on the first $200,000
2% on $200,001 to $2,000,000
3% on the portion above $2,000,000

Residential properties valued above $3,000,000 face a further 2% on the amount above that threshold. On a mixed-use property, the further 2% applies only to the residential portion.⁷

First-Time Home Buyer Exemption

If it’s your first home and the fair market value is $835,000 or less, you pay no property transfer tax on the first $500,000 of the purchase price. A partial exemption applies between $835,000 and $860,000, and the exemption disappears at $860,000.⁸ These thresholds took effect April 1, 2024, up from $500,000 previously.

Foreign Buyer Surcharge

Foreign nationals, foreign corporations, and taxable trustees owe an additional 20% property transfer tax on the residential portion of any property purchased in designated regions: Metro Vancouver, the Fraser Valley, the Capital Regional District, the Regional District of Central Okanagan, and the Regional District of Nanaimo.⁹

Speculation and Vacancy Tax

Property owners in designated urban areas file an annual declaration for the speculation and vacancy tax, even when nothing has changed from the previous year. The declaration is due March 31, and the tax itself is due the first business day of July.¹⁰ Canadian citizens and permanent residents holding a property that isn’t their principal residence pay 0.5% of assessed value. Foreign owners and members of satellite families pay 2%.¹¹ Most owner-occupiers and long-term tenanted properties are exempt, but the declaration still has to be filed to confirm that.

Home Owner Grant

If your home is your principal residence, the home owner grant reduces your annual property tax bill. The basic grant is $570 in the Metro Vancouver, Capital, and Fraser Valley regional districts, and $770 elsewhere in the province.¹² Seniors, veterans, and people with disabilities qualify for a higher additional grant. The grant begins to shrink once assessed value exceeds $2,075,000, dropping by $5 for every $1,000 above that threshold, and the basic grant is fully gone at $2,189,000.

Employer Health Tax

BC funds part of its healthcare system through a payroll tax on employers:¹³

$1,000,000 or less in total BC remuneration: no tax owed
$1,000,001 to $1,500,000: a reduced rate calculated as 5.85% of the amount above $1,000,000
Over $1,500,000: 1.95% on the employer’s entire BC payroll

Corporate Income Tax

Corporations operating in BC pay both federal and provincial income tax. The combined federal-provincial rate for general active business income is 27%. Canadian-controlled private corporations earning active business income within the small business limit of $500,000 pay a combined rate of approximately 11%. The small business limit is shared among associated corporations and may be reduced based on the corporation’s taxable capital or passive investment income.

Carbon Tax Eliminated in 2025

BC introduced its carbon tax in 2008, and it eventually reached $80 per tonne of carbon dioxide equivalent, adding cost to gasoline, diesel, and natural gas. The tax was eliminated effective April 1, 2025.¹⁴ Older guides still quoting BC carbon tax rates no longer apply. The separate motor fuel tax on gasoline and diesel remains in effect.

Climate Action Tax Credit

Lower- and moderate-income residents receive the BC climate action tax credit as quarterly payments through the federal benefit system. For the July 2024 to June 2025 benefit year, the maximum annual credit was $504 for an individual, $252 for a spouse or common-law partner, and $126 per child. It phases out at 2% of adjusted family net income above $41,071 for individuals or $57,288 for families.¹⁵ Filing your income tax return automatically triggers the calculation; no separate application is required.

Filing Deadlines and Penalties

Personal Income Tax

Your personal return is due April 30 each year. If you or your spouse is self-employed, the filing deadline extends to June 15, but any balance owing is still due April 30.¹⁶ You file a single return with the CRA that covers both federal and BC provincial tax. If you owe money and file late, the penalty is 5% of the unpaid balance plus 1% for each full month the return is late, up to 12 months. Repeat late filers who received a demand to file face 10% plus 2% per month for up to 20 months.¹⁷

Business Taxes

PST, employer health tax, and other provincial business taxes are filed and paid through eTaxBC, the province’s online portal.¹⁸ Filing frequency depends on tax volume: monthly, quarterly, or annually. PST late-filing penalties follow the same formula as income tax: 5% of the unpaid amount plus 1% per month for up to 12 months, or 10% plus 2% per month for repeat offenders. Separate penalties apply where the province finds you knowingly failed to collect or remit: 10% for negligent errors, 25% for fraud or gross negligence, and up to 100% if you collected tax from customers and deliberately kept it.¹⁹

1
King’s Printer. British Columbia Code – Income Tax Act
2
Government of British Columbia. Personal Income Tax Rates
3
British Columbia Laws. British Columbia Code SBC 2012 Chapter 35 – Provincial Sales Tax Act
4
Government of British Columbia. PST 206 – Grocery and Drug Stores
5
ICBC. PST on Vehicles
6
Government of British Columbia. Production Machinery and Equipment Exemption
7
Province of British Columbia. Property Transfer Tax
8
Province of British Columbia. First Time Home Buyers Program
9
Province of British Columbia. Additional Property Transfer Tax for Foreign Entities and Taxable Trustees
10
Province of British Columbia. Speculation and Vacancy Tax
11
BC Laws. Speculation and Vacancy Tax Act
12
Province of British Columbia. Home Owner Grant
13
Province of British Columbia. Employer Health Tax Overview
14
Province of British Columbia. Motor Fuel Tax and Carbon Tax
15
Province of British Columbia. Climate Action Tax Credit
16
Canada.ca. Get Ready to File a Tax Return – Personal Income Tax
17
Canada.ca. Interest and Penalties on Late Taxes – Personal Income Tax
18
Province of British Columbia. eTaxBC Online Services
19
Government of British Columbia. CTB 005 – Penalties and Interest