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2021 Federal Election tax round-up. Thumbnail

2021 Federal Election tax round-up.

The September 20, 2021 re-election resulting in the Liberal Party of Canada securing a second minority government provides an opportunity to look at the campaign promises made.

In this article by Manulife’s Jon Hreljec (Tax, Retirement & Estate Planning) we review how some of these promised tax measures may impact taxpayers.

RHSP (Registered Home Savings account Program): This new first time home buyers program allows up to $40,000 to be saved and withdrawn tax free.

Multigenerational Home Renovation Tax Credit: This new program allows a tax credit of 15% for up to $50,000 of renovation expenses related to modifying their home for an immediate or extended family member.

Increase First-Time Homebuyers Tax Credit: An increase from $5,000 to $10,000, resulting in a tax credit of 15%, driving $1,500 of tax savings.

Alternative Minimum Tax (AMT): Changes designed to limit the current benefits of all AMT credits and have a greater impact and be more punitive than the existing system for those caught by the new rules.

Home Office Expenses Expansion: extended through 2022 and increase to $500 from $400.

And don’t forget that Budget 2021 already passed changes to

  • New tax on luxury goods: vehicles and aircraft over $100,000 and boats over $250,000
  • Increasing OAS for Canadians over 75: an increase of 10%
  • Enhancing the Canada Workers Benefit (CWB), a non-refundable tax credit that will be enhanced.

Don’t forget: The NDP platform called for an INCREASE to the capital gains exclusion rate. Who knows what may happen if the form part of minority government legislative support.