Personal Tax Brackets
Taxable income above which the 20.5% bracket begins $53,359
Taxable income above which the 26% bracket begins$106,717
Taxable income above which the 29% bracket begins $165,430
Taxable income above which the 33% bracket begins$235,675
Basic Personal Amount
Basic personal amount for individuals whose net income for the year is greater than or equal to the amount at which the 33% tax bracket begins $13,521
Basic personal amount for individuals whose net income for the year is less than or equal to the amount at which the 29% tax bracket begins $15,000
First Time Home Buyer’s Savings Account (FHSA)
In Budget 2022, the government proposed the introduction of the Tax-Free First Home Savings Account (FHSA). This new registered plan would give prospective first-time home buyers the ability to save $40,000 on a tax-free basis. Like a Registered Retirement Savings Plan (RRSP), contributions would be tax-deductible, and withdrawals to purchase a first home—including from investment income—would be non-taxable, like a Tax-Free Savings Account (TFSA).
Budget 2022 announced the key design features of the FHSA, including an $8,000 annual contribution limit in addition to a $40,000 lifetime contribution limit. Today, the Department of Finance is releasing for public comment draft legislative proposals that provide additional details on the design of the FHSA. This backgrounder offers a summary of these details.
Maximum RRSP Limit
Maximum RRSP Limit for 2023 is $30,780
TFSA Limit
TFSA Limit for 2023 is $6,500
Property Flippers
Property flipping—buying a house and selling it for much more than what was paid for it just a short time prior—can unfairly lead to higher housing prices, and some people who engage in property flipping may be improperly reporting their profits to pay less tax.
To ensure profits from flipping properties are taxed fully and fairly, Budget 2022 proposes to introduce new rules so that any person who sells a property they have held for less than 12 months would be subject to full taxation on their profits as business income, applying to residential properties sold on or after January 1, 2023. Exemptions would apply for Canadians who sell their home due to certain life circumstances, such as a death, disability, the birth of a child, a new job, or a divorce.
Multigenerational Home Renovation Tax Credit
Many Canadians have traditions of living together in multigenerational homes, with grandparents, parents, and children under one roof—which can be an important way for them to care for each other.
To support these families, Budget 2022 proposes to introduce a Multigenerational Home Renovation Tax Credit, which would provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability, starting in 2023.
Courtesy of Canada Revenue Agency
This information is for general knowledge only and should not be interpreted as tax advice or recommendations. Every individual’s situation is unique and should be reviewed by his or her own personal legal and tax consultants.
