Moving from the US to British Columbia: What Changes on Your Taxes

Vancouver pulls in a steady stream of Americans working for Amazon, Microsoft, Apple, Electronic Arts, and the film and VFX studios that shoot here on BC’s production tax credits, alongside Victoria’s government and growing tech sector. Most of them arrive from Washington, California, or Oregon, and most underestimate what BC’s tax system, health system, and property rules do to a first-year move. The federal Canadian side (permanent residence, becoming a tax resident, the treaty) works the same as any other province. This page covers what’s specific to landing in BC, and what stays on your plate with the IRS after you leave.

What actually changes when you move from the US to BC?

Three things change at once: which government taxes your income, which health system covers you, and what you owe in property tax if you buy. None of it touches your US filing obligation if you’re a citizen or green card holder.

• BC assesses provincial income tax on top of federal Canadian tax, using its own bracket structure.
• MSP replaces your US employer health plan (or COBRA), but enrollment isn’t automatic.
• If you buy property, BC’s transfer tax and, in some areas, an additional foreign-buyer tax and a speculation tax layer on top of the purchase price.

What does BC’s income tax cost compared to your home state?

BC’s 2025 provincial brackets run from 5.06% to 20.5%, and the top rate applies well below where California’s top rate kicks in, which surprises people moving from a state they assumed was the expensive one.

Location	Top marginal rate	Where it applies	Sales/consumption tax
British Columbia	20.5% provincial (plus federal, combined top around 53.5%)	Above $252,752	12% (5% GST + 7% PST)
Washington	0% income tax; 7% capital gains excise tax	Long-term gains above $262,000	~10% combined state/local sales tax
California	13.3% (plus 1% mental health surcharge above $1M)	Above $1,000,000	~9-10% combined sales tax
Oregon	9.9%	Above $125,000 (single)	0% sales tax

BC’s full 2025 bracket table: 5.06% to $47,937, 7.7% to $95,875, 10.5% to $110,076, 12.29% to $133,664, 14.7% to $181,232, 16.8% to $252,752, then 20.5% above that. A Washington software engineer with no state tax at all is the biggest jump; a California resident already paying close to BC’s rates at high income feels it less.

Do you still have to file US taxes after the move?

Yes, permanently, if you’re a US citizen or green card holder. Citizenship-based taxation means the IRS taxes your worldwide income no matter where you live, so a BC paycheck, BC bank interest, and eventually a Canadian pension all show up on your 1040.

• You file a Canadian T1 as a BC resident and a US 1040 reporting the same income, then use the foreign tax credit on Form 1116 to offset the US tax with what you paid Canada
• Because BC’s rates generally exceed US rates, most filers end up with excess credits rather than owing net US tax, but the filing itself doesn’t go away
• You’ll also pick up FBAR reporting (FinCEN 114) on any Canadian account over $10,000 USD in aggregate, and FATCA reporting (Form 8938) at higher thresholds
• Canadian banks report your accounts to the CRA, which passes them to the IRS under the FATCA intergovernmental agreement, so there’s no version of this where the accounts stay invisible
• See the full checklist for Americans moving to Canada for the first-year sequence, and do US citizens really pay tax twice for how the credit mechanics actually net out

What happens to your 401(k), IRA, and Roth IRA in BC?

Your 401(k) and traditional IRA keep working roughly the way an RRSP does for a Canadian resident: the treaty lets the growth stay deferred and Canada generally respects that, so you’re not paying annual Canadian tax on unrealized gains inside the account. The Roth IRA is the one that needs paperwork.

• 401(k) and traditional IRA. Growth stays deferred under the treaty. When you eventually withdraw, both the IRS and CRA tax the distribution, with the foreign tax credit coordinating the two. See what happens to a 401(k) when you move to Canada for withholding and withdrawal mechanics.
• Roth IRA. Without any action, Canada’s default position is to tax the income accruing inside the Roth every year, because a Roth doesn’t automatically get the same deferral as a registered plan. Filing the one-time Article XVIII(7) election on your first Canadian return defers that, and a later qualified distribution stays exempt under Article XVIII(1). Skip the election and the Roth’s tax-free US status stops meaning much in Canada. Full mechanics: does the Roth IRA stay tax-free in Canada.
• New contributions. You can generally keep contributing to an IRA on US-source earned income, but contributing as a Canadian resident has its own rules worth checking before you assume it works the same as it did at home.
• Some people convert traditional balances to Roth before the move, while they’re still taxed at US rates only; see Roth conversion before moving to Canada if that’s on the table.

How does BC’s sales tax compare to what you’re used to?

BC charges 5% GST plus 7% PST, for a combined 12% on most retail purchases, which is a different structure from what most US arrivals are used to. Groceries, prescription drugs, and children’s clothing are largely exempt from both; liquor carries a higher 10% PST rate, and vehicle PST scales up with the purchase price on luxury models.

• For a Washington arrival, there’s no direct comparison since Washington has no state income tax but does charge roughly 10% combined sales tax in most areas, so the consumption-tax gap is smaller than the income-tax gap
• For an Oregon arrival, BC’s 12% is a genuine new cost, since Oregon charges no sales tax at all

What about BC’s health coverage?

MSP (the Medical Services Plan) has been premium-free since January 2020, but “free” doesn’t mean automatic. You still have to actively enroll, and coverage doesn’t start the day you land.

New BC residents face a waiting period of up to three months from the date residency is established before MSP coverage begins. Apply through Health Insurance BC as soon as you have your permanent address and immigration documents, and bridge the gap with private travel or health insurance, since your US employer coverage or COBRA continuation typically ends when you leave the country.

What will buying property in BC actually cost you?

BC’s Property Transfer Tax is graduated: 1% on the first $200,000, 2% from $200,000 to $2,000,000, 3% above $2,000,000, plus an extra 2% on the residential portion of a purchase price above $3,000,000. On top of that, foreign nationals buying in designated regions face a separate 20% Additional Property Transfer Tax.

• The 20% additional tax applies in Metro Vancouver, the Capital Regional District (Victoria), the Fraser Valley, the Central Okanagan, and Nanaimo Regional District, and it hits foreign nationals, foreign corporations, and taxable trustees. If you haven’t yet landed as a permanent resident when you close, budget for it; some BC PNP entrepreneur-stream applicants qualify for an exemption.
• BC’s speculation and vacancy tax applies annually in the same designated regions: 2% of assessed value for foreign owners and satellite families, 0.5% for Canadian citizens or permanent residents who leave a property vacant. Making the home your genuine principal residence generally exempts it, but a second property or a home you don’t occupy enough can trigger the tax.
• General guidance on the purchase itself is in American buying property in Canada.

What should I do next?

Before you move, model both the last US-only year and the first BC year so you know the FTC position and aren’t surprised by a bigger provincial bill than expected. Enroll in MSP the day you have a BC address, and if you’re buying property, confirm your immigration status before closing so you know whether the foreign buyer’s tax applies.

• Americans moving to Canada: first-year tax checklist
• US citizen moving to Canada tax checklist
• Pre-move tax planning before moving between Canada and the US
• Do US citizens really pay tax twice living in Canada
• What happens to a 401(k) when you move to Canada
• Does the Roth IRA stay tax-free in Canada
• FBAR filing requirements
• FATCA explained
• Moving from BC to Washington State, the reverse of this corridor
• Moving from BC to California, the reverse comparison
• Moving from the US to Ontario, the sister reverse-corridor article

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.