As a new year begins, here are some of the tax rules and changes to keep in mind.
First-Time Home Savings Account (FHSA)
The FHSA is a new tax-free savings vehicle for first-time home buyers to save up to $40,000 tax-free towards the purchase of a first home in Canada. Contributions to the FHSA are tax deductible (like an RRSP). Withdrawals from the FHSA to put towards a first-time home purchase will be non-taxable (like a TFSA).
Vacant Home Tax (UPDATED)
Toronto homeowners now have until the end of February 2023 (previously February 2, 2023) to submit a declaration of their property’s 2022 occupancy status. Failure to submit the declaration will result in a late penalty fine of at least $250. Should you fail to make a declaration, the city will assume your property is vacant and your property will be subject to the tax.
The RRSP contribution limit for 2023 is $30,780, up from $29,210 in 2022.
The TFSA contribution limit for 2023 is $6,500, up from $6,000 in years 2019-2022.
Basic Personal Amount
The federal basic personal amount for the 2023 taxation year is $15,000, up from $14,398 for the 2022 taxation year.
Income Tax Brackets
All federal tax brackets for 2023 are indexed to inflation at 6.3%. This is up from 2.4% in 2022.
The 2023 mileage rates are: $0.68 per km for the first 5,000 km driven (up $0.07 from 2022). After 5,000 km, the rate is $0.62 for each additional kilometre driven.
Multi-Generational Home Renovation Tax Credit
New for 2023, the Multi-generational Home Renovation Tax Credit allows eligible families to add a secondary suite for a senior or disabled family member. Families can claim up to $7,500 for the renovation and construction of a secondary suite.
Should you have any questions as to how this may affect you, please contact us to learn more.