2022/2023 New Personal Tax Measures

The Federal government has rolled out some new tax benefits for Canadians!

I am going to keep this short and have highlighted the main points here. Click through to read more and as always, contact us should have any questions.

A quick note: Refundable vs. Non-refundable tax credit. The latter means that the credit can only be applied against your taxes otherwise payable. A Refundable credit means that if you have any left over after paying your tax bill, that you will get a refund of cash back.

If these apply to you, DO let us know when we are preparing your personal tax filing!

Changes in Effect for 2022

First-Time Home Buyer's Tax Credit (link)

- for homes purchased on or after January 1, 2022

- increase in non-refundable tax credit to $10,000 (x 15% = $1,500 credit) from $5,000

Home Accessibility Tax Credit (link)

- applies for 2022 and future tax years

- non-refundable tax credit for eligible home renovation expenses

- for persons eligible for the disability tax credit or 65 and over

- expense limit increased to $20,000 (x 15% = $3,000) from $10,000

Labour Mobility Deduction (link)

- applies to 2022 and future tax years

- for certain travel and relocation expenses for workers in construction industry

- eligible temporary relocation for employment in construction in Canada

- away for at least 36 hours, 150km closer to worksite

- deduction up to $4,000 in eligible expenses for the year, to a maximum of 50% of related

employment income

Medical Expense Tax Credit (expansion for surrogate or donor) (link)

- effective for 2022 and future tax years

- broader definition of a “patient” where relying on a surrogate or donor

- eligible medical expenses can be claimed in respect to a surrogate mother or donor

- includes fees paid to fertility clinics or donor banks

- incurred in Canada according to the Assisted Human Reproduction Act

Canada Dental Benefit (link)

- tax-free, up-front payment

- for child that does not have access to private dental insurance

- for child under 12 as of:

(a) Dec.1, 2022, for dental care performed between Oct.1/22 and June 30/23, and

(b) Jul.1/23, for dental care performed between Jul.1/23 to June 30/24

- eligible families earning less than $90,000 per year receive a tax-free payment for each eligible child based on adjusted net income:

o $650 per child for families under $70,000

o $390 per child for between $70-$79,999

o $260 per child for between $80-$89,999

- maximum two payments per child with the two benefit payments available

- if you received CCB (partial or full), then you may apply to receive this benefit

- 2021 tax return must have been filed

Canada Housing Benefit (link)

- one-time tax-free payment of $500 to lower-income renters with adjusted net income of $20,000 (single) or $35,000 (family), who pay at least 30% towards rent

- application opened Dec.12, 2022

- must have filed a 2021 tax return

- apply through My Service Canada account or phone 1-800-282-8079

Changes in Effect for 2023

Multigenerational Home Renovation Tax Credit (link)

- applies for work performed or paid on or after January 1, 2023

- refundable tax credit for eligible expenses for a qualifying renovation

- for a self-contained secondary unit for an eligible person (senior or disabled person)

- maximum $50,000 in eligible expenses (x 15% = $7,500 credit)

- need building permits, final inspection

- more guidance from CRA to come

Tax-Free First Home Savings Account ("FHSA") (link)

- new registered account, applies for 2023

- contributions are deductible to a maximum of $8,000; lifetime maximum $40,000

- qualifying withdrawals non-taxable

- cannot use Home Buyer's Plan and FHSA together

GST/HST on Assignment Sales by Individuals (link)

- applies for any assignment on or after the day that is one month after April 7, 2022

- currently, an assignment sale of newly constructed/substantially renovated residential housing may be exempt if the property is to occupy the home

- all assignments now taxable for GST/HST

Residential Property Flipping (link)

- applies for properties sold on or after January 1, 2023

- profits from sales of real estate, including rental, owned less than 12 months are now

fully taxed as business income (not capital gains) – loss treatment does not apply

- no principal residence exemption, no capital loss on Personal Use Property

- exceptions apply (eg. death, disability, illness, marital status, employment, etc.)

- more guidance from CRA to come