BC’s Additional School Tax on Homes Over $3 Million (Assessed)

If you own (or are considering) a higher-value home in British Columbia, you’ve likely heard about the Additional School Tax. It’s a progressive provincial levy that applies only to the portion of a residential property’s assessed value above $3 million. Here’s a clear breakdown of what it is, how much it costs, who pays it, and why it exists—written for homeowners, buyers, and anyone navigating BC’s real estate market.

What It Is

The Additional School Tax is an extra layer of provincial school tax applied to most high-valued residential properties. It is not a municipal tax and sits on top of the regular school tax (and other property taxes) that every property owner pays.

It only applies to the portion of assessed value above $3 million. The first $3 million is exempt from this extra rate.

Current rates (2026 tax year and earlier):

• 0.2% on the residential portion between $3 million and $4 million
• 0.4% on the residential portion over $4 million

New rates effective January 1, 2027 (2027 tax year onward):

• 0.3% on the portion between $3 million and $4 million
• 0.6% on the portion over $4 million

This is a 50% increase announced in the 2026 provincial budget.

How Much It Costs Homeowners

The tax is straightforward to calculate once you know the assessed value from BC Assessment.

Examples under current (pre-2027) rates:

• Home assessed at $3.5 million → tax on $500,000 = $1,000/year
• Home assessed at $5 million → $2,000 (on the $1M between $3–4M) + $4,000 (on the $1M over $4M) = $6,000/year
• Home assessed at $7 million → $2,000 + $12,000 = $14,000/year

Under the new 2027 rates the same homes would pay:

• $3.5M home → $1,500
• $5M home → $9,000
• $7M home → $21,000

These amounts are in addition to the regular school tax and municipal/regional taxes. The province estimates roughly 2.3% of homes are affected.

When It Came Into Effect and the Political Context

The tax was introduced in the 2018 provincial budget by the NDP government under Premier John Horgan and Finance Minister Carole James. It first applied for the 2019 taxation year.

The stated rationale at the time was that soaring house prices had created large paper gains for many owners, and it was fair to ask those who had benefited most to contribute more. Revenue was framed as supporting education and broader public services.

The 50% rate increase was announced in Budget 2026 by the NDP government under Premier David Eby (Finance Minister Brenda Bailey). It takes effect for the 2027 tax year. There is no legislated end date; like most tax measures, it continues until a future government changes or repeals it.

Which Properties Are Subject—and Where

It applies province-wide to most residential properties whose assessed value exceeds $3 million, including:

• Detached homes
• Stratified condominiums and townhouses
• Most residential-class vacant land

Exceptions:

• Non-stratified rental buildings with four or more units (e.g., traditional apartment buildings) are generally exempt.
• On mixed-use properties, only the residential portion above $3 million is taxed.

BC Assessment determines whether a property qualifies. The vast majority of affected properties have historically been in Metro Vancouver (around 84% in earlier data), particularly:

• West Vancouver
• Vancouver’s west side (Point Grey, Kerrisdale, Dunbar, etc.)
• North Shore communities
• Higher-value pockets of Burnaby, Richmond, White Rock, and parts of Surrey/Langley
• Also present in areas such as Greater Victoria, Whistler, and select parts of the Okanagan and other desirable regions

It is not limited to any single neighbourhood—it follows assessed value, not municipal boundaries.

How It Gets Paid

The Additional School Tax appears as a line item on your annual property tax notice. Your municipality (or the Surveyor of Taxes in rural areas) collects it along with other taxes and remits the provincial portion to the Province.

Eligible homeowners can still apply for the regular Home Owner Grant and, in many cases, property tax deferment (a low-interest loan program available to seniors and certain other groups). Deferment can cover the additional school tax as well.

How The "School Tax" Helps Schools & Public Services

Officially called “school tax,” the revenue goes into the Province’s consolidated revenue fund rather than being earmarked for individual school districts. From there it helps fund core government services, including K–12 education, post-secondary education, health care, and other provincial priorities.

Supporters argue it is a progressive way to capture some of the wealth created by rising land values—especially in a province where housing affordability and school funding pressures are ongoing concerns. Teachers, support staff, seismic upgrades, and classroom resources all benefit indirectly from a stronger provincial revenue base.

Critics note that the money is not ring-fenced for local schools and that the tax can hit long-time owners whose incomes have not risen with their assessments.

Assessed Value vs. Purchase Price (and Market Value)

This is one of the most important practical points for buyers and sellers:

• The tax is based on BC Assessment’s assessed value, not what you paid for the property or its current market listing price.
• Assessments reflect estimated market value as of July 1 of the previous year.
• In a rising market, assessments can lag actual sale prices; in a falling market they can overstate current value.
• A home bought years ago for under $3 million can cross the threshold purely through market appreciation and assessment updates.
• Conversely, a recent purchase above $3 million may temporarily have a lower assessment if the July 1 valuation date predates the sale.

Buyers should always review the most recent assessment notice (and any pending appeals) when calculating carrying costs. Sellers in high-value areas should be prepared to discuss the tax implications with potential buyers.

Other Useful Notes for Real Estate Professionals and Clients

• Vacant land and development sites: Most residential-class vacant land is subject until construction (excavation) begins.
• Appeals: If you believe the classification or valuation is wrong, contact BC Assessment promptly.
• Revenue scale: The tax has raised hundreds of millions of dollars province-wide in recent years (Vancouver alone has collected tens of millions annually on behalf of the Province).
• Future outlook: With the 2027 rate increase already legislated, further changes will depend on future budgets and political priorities. Thresholds have remained fixed at $3M/$4M since introduction, so ongoing assessment growth gradually pulls more properties into the net.

For homeowners and buyers in the upper end of the market, the Additional School Tax is now a permanent feature of the ownership cost equation in British Columbia. Understanding the rates, the assessed-value basis, and the payment mechanics helps avoid surprises and supports better long-term planning.

If you’re evaluating Okanagan Valley property over the $3 million threshold—or wondering how assessment changes might affect your current home—reach out to our team. We’re happy to walk through the numbers with current BC Assessment data and help you model total carrying costs.