Purtzki, Johansen + Associates

Blog

The Federal Budget 2022 in a Nutshell

2020 Tax Planning

 

  • Dental Care for Canadians – Coverage will be provided beginning 2022 for those under 12 years old. In 2023 coverage will extend to those under 18 including seniors and disabled persons. Full implementation of the plan by 2025 and restricted to families with incomes under $90,000.
  • Personal and corporate tax – No rate increase.
  • Capital gains inclusion rate – Remains at 50%.
  • Wealth tax – Not introduced as some had speculated.
  • Principal Residence Exemption – You can still sell your principal residence tax-free.
  • Surplus stripping and intergenerational business transfers – No changes at this time however new drafted legislation expected in the fall.
  • Flipping of residential properties – A new rule will make the sale of any residential property, including rentals, fully taxable and not eligible for capital gains treatment nor the principal residence exemption. The tax will apply to any property bought and sold within 12 months with some exceptions such as death, separation, addition to the family (e.g. birth of child; elderly parent moves in) etc. The proposed measured would apply to sales occurring on January 1, 2023 or later.
  • Ban on foreign property ownership – Foreign commercial enterprises and people who are not Canadian Citizens or permanent residents will be banned from buying non-recreational property in Canada for two years (the effective date was not announced).
  • New minimum tax for high earners coming – The budget announced that in the fall there would be new legislation drafted (no current details released).
  • Tax-Free First Home Savings Account – Beginning in 2023 a new registered savings account allowing first time home buyers the ability to save up to $40,000 (limited to $8,000 per year without carry forward room). Contributions are tax-deductible. Withdrawals from this plan to purchase the first home will be tax-free. Any investment income earned in the Savings Account will not be taxable.
  • The Home Buyer Tax Credit – The 15% tax credit to be increased from $5,000 to $10,000 effective for first time home purchases occurring on or after January 1, 2022.
  • Multigeneration Home Renovation Tax Credit – Beginning in 2023 a 15% tax credit for expenses up to $50,000 to create a secondary dwelling for seniors or disabled persons to reside with a relative.
  • Home Accessibility Tax Credit increase – The 15% tax credit is being doubled in 2022 from $10,000 to $20,000 for an eligible home renovation for disabled persons.
Linked In
twitter

© 2021 Purtzki, Johansen + Associates
All Rights Reserved.

Back to Top