What the new(-ish) government means for your taxes
The results are in, and Canada has voted: The Liberals will govern the country for four more years with a minority government. Minority governments work a little differently than majority governments, in that minority governments have to work harder to get bills passed and make changes. So, until the November budget is announced, campaign-pledged tax changes are tentative. We’ll be sure to share how it will affect your taxes, but until then, you probably want to know what was promised this election, right?! We’re here to break it down for you.
New homeowners will have some new tax breaks.
The Liberals have already increased the RRSP Home Buyers Plan maximum withdrawal from $25,000 to $30,000 in their last budget, but now they will also provide homeowners with interest-free loans of up to $40,000 to make energy-efficient renovations to their homes. They’re also going to help people buy newly built homes that are certified zero-emissions by giving them a grant of up to $5,000. In the last budget, Liberals introduced the First-Time Homebuyer Incentive – a shared equity mortgage program with the CMHC. Going forward, they will increase the qualifying value to $800,000 in places where houses cost more (e.g. Toronto, Vancouver and Victoria).
Parents are going to see some new support, too.
The Liberals have pledged to increase the Canada Child Benefit payments by 15 per cent for children under the age of one, an additional $1,000 per year. They also pledged to double the Child Disability Benefit component of the CCB to add an additional $2,800 per year. A third promise is the creation of 250,000 before and after-school spaces for children under 10 and to cut their fees by 10 per cent. Now that sounds like a lot of macaroni necklaces!
The aging senior population is also getting a tax boost.
Under the liberal government, seniors over 75 will see an increase in Old Age Security benefits by 10 per cent. They will also increase the Canada Pension Plan survivor benefit by 25 per cent.
Tax rates are also changing.
The Liberals have vowed to increase the basic personal amount of income tax rates to $15,000, but only for people with taxable income less than $147,667. Taxpayers making more than $210,371 will not benefit from the increase. They are also introducing a 10 per cent luxury tax on cars, boats and personal aircrafts that cost more than $100,000, so those who want to drive their sexy sports car to their airplane and fly to their yacht might be on the hook for a bit more than the ticket price.
Of course, nothing is guaranteed until the government releases a budgetary update in November, but for now, these are the types of things to prepare and keep note of for the 2020 tax season. When tax time rolls around, an experienced Tax Expert is your best chance at making sure you get everything you can in your refund. Tax laws change every year, so don’t leave anything on the table! Visit an H&R Block nearest you for all your tax needs.