Policies and You

Signed in as:

filler@godaddy.com

Account

2024 Cdn Federal Budget: what it means for you

The Canadian government has released the 2024 Federal Budget. This year’s Budget targeted housing, affordability, and economic growth. Here are highlights from the Budget that may affect you:

MORE AFFORDABLE HOMES:

Increase Home Buyers' Plan (HBP) withdrawal limit to $60,000, allowing first-time buyers to save $25,000 more for down payment. Effective April 16, 2024.
Extend grace period for HBP withdrawals by three years for those withdrawing between Jan 1, 2022, and Dec 31, 2025. Repayment starts in fifth year after withdrawal.
Allow 30-year mortgage amortizations for first-time buyers of new homes, starting Aug 1, 2024.

CARE FOR STUDENTS, RENTERS, WORKERS WITH DISABILITIES:

Extend full-time Canada Student Grants to $4,200 and interest-free Canada Student Loans to $300 per week for 2024-2025.
Permit renters to report rent payments to credit bureaus, improving credit scores.
Increase Canada Workers Benefit Disability Supplement by up to $821 per year.

LOWERING EVERYDAY COSTS:

Enable flexibility in renewing or switching home internet, home phone, and cell phone plans.
Cap NSF fees at $10 per instance to aid struggling Canadians.

TAXES AND REBATES:

Increase capital gains inclusion rate above $250,000 annually from one-half to two-thirds, effective June 25, 2024.
Return fuel charge proceeds from 2019-20 through 2023-24 to businesses with 499 or fewer employees through a refundable tax credit, totaling over $2.5 billion.

For case studies on how this new capital gain change affect ordinary folks, and how insurance could help offset this increase, click here.

This is an excerpt from an article by Sun Life. Original post can be found in the link below: Click here For more detailed information, especially on the tax front, please click here

Insurance Kit and those associated with the information on this website are not professional accountants, unless specified otherwise. Please always seek the advice of a professional accountant prior to making any tax related decisions.

BC's New Anti-flipping Tax and how it works

WHO DOES IT APPLY TO?

The proposed BC home flipping tax applies to income you realize from the sale of properties in British Columbia if you have owned them for less than 2 years.

The BC home flipping tax will apply to income from B.C. properties sold on or after January 1, 2025. Income from property purchased before the tax’s effective date may be subject to the new tax if sold on or after January 1, 2025 if the property is sold within 2 years, unless an exemption applies.

As previously announced in British Columbia’s Homes For People plan, the intention of the tax is to discourage the short-term holding of property for profit.

NOTE:
Some things remain unclear regarding this policy:
- It is still subject to legislative approval
- Doesn't define when the "purchase" is for presales. Ex: Is it at the time of writing the contract or when the title is transferred to the buyer? My gut feeling is that it'll be based on the time of writing the contract. If that's the case then buying a presale in Jan 2024, you'll still be able to assign by Feb 2026. So choosing projects with longer than a 2 year completion timeline is a minimum under such consideration.

Details on how the tax and the exemptions can be found in the link below:
Click here

*Information provided here is a re-post of our Realty well-being partner Michael Lee. For more real estate tips, please subscribe to his newsletter directly. Insurance Kit and those associated with the information on this website are not professional accountants, unless specified otherwise. Please always seek the advice of a professional accountant prior to making any tax related decisions.

New Dental Benefits for the Sweet tooth!

If you have children, you know the dental bill could be more painful that the extraction!

Apply for the new Canada Dental Benefit

You can apply for the Canada Dental Benefit (CDB) if:

You have child(ren) who are under 12 years old on December 1, 2022 and they do not have access to a private dental insurance plan (including employer provided).
You have, or will have, out of pocket expenses not fully reimbursed by a federal, provincial, or territorial program or plan for dental care for your child(ren), incurred between October 1, 2022 and June 30, 2023.
Your adjusted family net income (AFNI) was under $90,000 for the 2021 tax year. helphelp
You are currently receiving the Canada Child Benefit (CCB).

For more information on eligibility, go to Canada Dental Benefit open_in_new.

Note: We will need to access your tax information in order to process your application.

Insurance Kit could help with tax-saving strategies through insurance products. To understand how insurance products could help your tax-planning in this regard, contact us now!

You might be owing tax penalties alongside the foreign owners

In order to cool down overheated housing markets in certain cities, various governments have added new taxes to homes that are not occupied, rented out or fully utilized. Many think that these measures only affect those who own investment properties, or are foreign buyers. This misunderstanding could mean a hefty fine for some who own only their primary residence as well.

Vacant properties are those that have been unoccupied for more than six months during the tax year (Jan 1 – Dec 31). Most importantly, failure to make a property status declaration will result in a property being deemed vacant and therefore subject to the Empty Homes Tax. Even if the property is your primary residence, you still have to declare it. We hate to be the bearer of the bad news: unfortunately, your declaration period has passed for 2022.

For Vancouver homeowners, properties deemed or declared empty in 2022 will be subject to a tax of 3%; for in 2023, it will increase to 5%. Late and unpaid Empty/Vacant Homes Taxes are subject to the same penalties for non-payment as property taxes, including:

A late payment penalty of 5%
Daily interest on arrears
The tax sale process

Moreover, the BC provincial government also has a Speculation and Vacancy Tax (SVT), for which the requirement for declaration will start in 2024. Areas being subjected to this new tax include:

Capital Regional District (CRD)

Metro Vancouver Regional District

District of Lantzville

For Toronto homeowners, the tax rate is 1%; there is also a later declaration or false declaration penalty of $250 to $10,000. Interest on any overdue Vacant Home Tax is 1.25 per cent on the first day of default and each month thereafter, until the amount owed is paid.

It does not stop there: Starting last year in 2022, the Federal government's Underused Home Tax (UHT) was added at an annual 1% tax on the ownership of vacant or underused housing in Canada.

The good new is that there is an "excluded owners" category that most Canadians fall into: citizens, permanent residents, listed corporations, REITs and charities, who own primary residences or a vacation home located in an eligible area etc. do not have to file a UHT return.

What if I own the properties through a trust, a private corporation or a partnership?

Even if you owe no taxes under these structures, you still must file a UHT return. The penalties for filing after the April 30 deadline (May 1, 2023, for the 2022 tax year) are much stiffer than the municipal governments': Minimum $5,000 for individuals, and $10,000 for corporations, for each residential property. The penalties would be higher with no cap on the maximum!

The most commonly seen small-business corporations are "numbered companies" owned by multiple property owners, and the many farms in Canada that are held in corporate or partnership structures. For example, each farm that has a house on it will have to file the UHT return or they could potentially owe a $10,000 penalty. There are many other exceptions and stipulations that one should consult their accountant for more details.