The federal government has introduced several changes to taxation and tax benefits for this year — and experts tell CBC News the tax changes related to housing are the ones to watch.
The FHSA allows certain homebuyers to save up to $40,000 toward a home purchase, with a maximum annual contribution of $8,000 over five years. Contributions to the FHSA are tax-deductible and withdrawals to purchase a home are tax-free.
Hugh Woolley, a Vancouver-based chartered professional accountant, said it’s important to note that the FHSA isn’t just for first-time homebuyers. Those looking to buy a home who haven’t owned one for four years or more are also eligible.
“So this can also be for people who are re-entering the housing market, who’ve been out of the housing market for a number of years,” Woolley said.
Another new tax benefit related to housing is the Multigenerational Home Renovation Tax Credit.
The refundable tax credit will provide up to $7,500 “in support for constructing a secondary suite for a senior or an adult with a disability to live with family members,” Finance Canada said in an email.
Eligible families can claim 15 per cent of a maximum $50,000 in home renovation and construction costs to build a secondary housing suite.
New taxes on home-flipping, vacant housing
The government brought in a new rule in Budget 2022 which has effectively increased taxes on home-flipping.
The change means the government will assume anyone who sells a home after possessing it for less than 12 months will be considered to be flipping the property. Profits from the sale would be considered business income, not a capital gain.
Dan Rogozynski, co-director of the University of Waterloo’s masters of accounting program, said the government hopes the measures will help slow rising housing prices in Canada.
“They don’t like this flipping, because what happens is it creates demand, it inflates prices,” Rogozynski said.
But the change comes with a number of exceptions, such as selling a home because of a death or divorce.
Woolley said home-flippers will likely look for ways to get around paying the tax.
“I think there’s going to be a lot of people who do sell within a year [and] are still going to be able to come up with some reason as to why these rules don’t apply to them,” he said.
The government is also introducing an Underused Housing Tax (UHT).
“The UHT is a national, annual one per cent tax on the value of vacant and underused residential property in Canada owned directly or indirectly by non-resident, non-Canadians,” Finance Canada said in an email.
Any non-resident or non-Canadian who owns an underused or vacant residential property in Canada as of December 31, 2022 will have to file a UHT return for the property by April 30, 2023.
There are a number of exceptions to the UHT. They include exceptions for seasonal properties and properties made inaccessible by a hazard.
New taxes on home-flipping and vacant property are meant to increase the number of available housing units. (Richard Buchan/The Canadian Press)
Woolley said the range of exemptions to the UHT is notable.
“I think that one of the dangers in these rules is the more exemptions you provide, the more the tax planners and the clever, crafty people are going to say, ‘Well, this is the way you get around these rules,'” Woolley said.
Rogozynski said it’s likely the tax will increase in the next few years.
“I can’t see why over time that rate wouldn’t go up from 1 per cent, to 2 per cent, to 3 per cent, because they’re nameless, faceless foreigners. They don’t vote,” he said.
Other changes
The federal government indexes personal income tax brackets and many tax benefits to inflation. They’ll increase by 6.3 per cent this year, says the Canada Revenue Agency.
Rogozynski said it’s a far higher jump than usual.
“This is triple what you would normally see across the last 40 years,” he said.
“So pretty well everybody who is in Canada working now probably has never seen such an indexation factor going on.”
The Basic Personal Amount, the amount of income exempt from tax, has increased to $15,000 this year, up from 14,398 in 2022.
Rogozynski said that, overall, tax changes this year are modest.
“There may be a recession [in 2023]. That’s not the time to introduce a bunch of big new increases,” he said.
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
