Budget 2022
The Budget includes plans to create a new Tax-Free First Home Savings Account (TFFHSA) to help Canadians get into the housing market save for a down payment. Taxpayers can contribute $8,000 per year to a maximum of $40,000 per person towards the purchase of a first home. Each individual can save in their own TFFHSA.
Similar to the Current TFSA, withdrawals from a TFFHSA would be non-taxable, including any income earned within the account. Contributions are also tax-deductible, similar to registered retirement savings plan (RRSP'S) .
“Tax-free in, tax-free out,”
The TFFHSA is expected to roll out in 2023.
The budget also proposes doubling the First-Time Home Buyers’ Tax Credit to $10,000, retroactive to any homes purchased from January 1, 2022.
The budget plans to setup a Home Buyers’ Bill of Rights. The bill would plan to end “blind bidding” practices nationally, and ensure a legal right to a home inspection before buying.
There are new rules for tax property flippers. Anyone who sells a property which is held for less than 12 months would be considered a "Flipper" under the new rules and would be subject to tax on their profits as business income and not eligible for Principal Residence Exemption. Any Gains on Flipping Houses would be Taxed Fully at the taxpayers marginal rates.
Finally, the government also announced plans to explore a two-year ban on foreign ownership in the budget.
The government intends to propose restrictions that would prohibit foreigners who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada for a period of two years. Refugees and international students would be subjected to the proposed law.
Posted on 04 April 2022