The federal budget for 2022 was tabled on April 7, 2022. Below is an overview of certain measures that may impact a tax payer. We will discuss these in detail in future blogs.

Home Affordability
Prices of homes in Canada have sky rocketed and this may be considered a significant challenge for a tax payer to afford a home.

New Tax-Free First Home Savings Account (FHSA) whereby contributions of up to $8,000 annually for five years (or $40,000 in total) can be made into the account. This account is a hybrid of an RRSP and a TFSA where the contributions would be deductible and income in the account and withdrawals to make purchase for a first home would not be taxable.

Home buyer’s tax credit has been doubled from $5,000 to $10,000. This will result in an increase of the tax credit from $750 to $1,500 for eligible tax payers

Home accessibility tax credit has also doubled to $20,000.

New Multigenerational home renovation tax credit is a refundable tax credit for up to $50,000 of eligible expenditures on renovations to build a qualifying secondary suite for an eligible relation (65+ or eligible for disability tax credit).

Two-year prohibition rule for foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring a non-recreational residential property in Canada.

New residential property flipping rule that all gains arising from disposition of a residential property (including rental property) that was owned for less than 12 months to be business income. Principal residence exemption will not apply and entire capital gain (not 50%) will be subject to marginal tax rates of the tax payer. The exceptions are life events like death, relationship break-down, birth or new addition to family or disability.

Stay tuned for more updates…