Continued from Page 2…
MarkMark Gallant asks:
Hey Trent long time no see!! It's great to see a fellow UPEI'er doing so well.
I had not read the details of the budget other what I saw on the news last night. I am sure I can read up on it but thoutgh I'd ask. A question I had was regarding home renovations and the parameters around that. Is it only for hiring tradesman or is it do it yourself? 15% up to $1500 benefit.
Also do the new tax cuts make much difference to single income families.? Would more (or the same) benefits still accrue if it was 2 people together earning $50K vs 1 person/1 stay at home. At $100K? Is it more of a low income break?
Trent Henry: The maximum credit is $1,350 because it's for expenditures in excess of $1,000 (up to $10,000). If you're doing it yourself, it would only be the materials, fixtures, equipment rentals and permits that would apply as there is no cost of labour. It remains to be seen what evidence you're going to have to provide to prove these items were used for home renovation.
Two people earning $50K save about $331 as a result of this budget. Whereas one person earning $100K saves about $317.
STW asks: Can you tell us where we can obtain more information on what home reno's qualify? Is there a web site you or the government host that could add clarity, such as would a new roof qualify?
Trent Henry: Additional information on the home renovation tax credit will soon be available on Canada Revenue Agency's website at www.cra.gc.ca.
In addition, information is also available at www.fin.gc.ca, the Department of Finance's website.
Cathryn Motherwell: Thanks very much for your time. Are there any other elements in the budget that will affect individual finances?
Trent Henry: There were a couple of additional personal tax measures targeted at the housing sector. These include a first-time home buyer's tax credi (a new, non-refundable credit based on amounts of to $5,000 and available to first-time home buyers. This will generate a one-time $750 tax savings).
In addition, the dollar limit for withdrawals from RRSPs under the Home Buyers' Plan is increased to $25,000 from $20,000.
There is a definition of " new home buyer" - people who have owned a home in the past five years will not qualify. However, if you have to acquire a home that's more suitable for an individual with a physical disability, then the five-year restriction does not apply.
This budget was all about spending. Accordingly, there is very little with respect to either personal or corporate tax changes.
As we commented earlier, we expect the government will deal with tax changes in upcoming technical packages.
The approach the government has taken was to spread any tax benefits among all Canadians. Many people may be disapointed with the lack of personal tax savings as a result of this budget.
From the corporate perspective, the government has continued to bring down corporate tax rates and further enhance the incentives for small business corporations.