The Minister of Finance, Eric Girard, announced Thursday measures aimed at harmonizing his tax system with new federal provisions aimed in particular at facilitating access to property.
The tax credit for the purchase of a first home could double. The amount received, the maximum of which is currently $750, could go up to $1,500 as of 2022. This measure should benefit the 70,000 Quebecers who buy their first home each year.
Quebec is also implementing provisions that will facilitate the use of savings with the tax-free savings account for the purchase of a first property (CELIAPP), a new vehicle announced by Ottawa in its last budget.
Contributions to the CELIAPP will also be deductible in Quebec, just as the income earned in this account will not be subject to tax. Withdrawals made from the account to buy a first home will also be tax-free. This measure will come into force in 2023.
During a press conference, Mr. Girard affirmed that Quebec deemed it reasonable to harmonize its independent tax system with the CELIAPP.
“It really takes a major disagreement not to harmonize on this kind of measure, he said. The natural thing to do is to harmonize. »
Mr. Girard stressed that this harmonization will support the entire market by facilitating access to property for first-time buyers.
“We had a market that was in total turmoil and we have a market that is slowing down, so it is a time that is more appropriate to introduce such a measure,” he agreed.
Taxing flips
Quebec will follow in Ottawa’s footsteps on real estate flips by taxing income from hasty resales of residential properties. The Minister expects this measure to moderate the market in Quebec, even if it is not here that this practice is the most widespread.
“The federal government’s motivation is primarily for the Vancouver and Toronto market, but we see behavior like that in Quebec,” said Mr. Girard. The effect, in terms of income, is really marginal, but it will temper the market. »
As of January 1, 2023, profits from the resale of residential properties, within 12 months of their acquisition, will henceforth be taxable, except in certain specific cases.
In the process, Mr. Girard announced that Quebec will expand eligibility for the deduction granted for small businesses by raising the reduction ceiling to $50 million instead of the current $15 million. About 1,100 companies will be able to take advantage of this measure.
To counter the labor shortage, the criterion of 5,000 paid hours will be removed from the eligibility conditions of two refundable tax credits to promote job retention for experienced workers and for people with severe limitations to work.
With this measure, which should benefit 13,000 businesses, the Quebec government wants to promote the integration or job retention of 28,000 workers.
Inflation
Mr. Girard signaled Thursday that he expects an upward revision to the average inflation rate expected this year. He foresees an increase in the cost of living of around 6%.
“We planned 4.7%, it’s too low, I can tell you, today. The number is going to be higher than that, ”he said, referring to the publication of figures to come in June.
Mr. Girard did not advance on the form that could take new aid to the population to fight against inflation, recently announced by Prime Minister François Legault.
According to the Minister of Finance, it will be possible to have a clearer picture of what would be proposed once the next economic update is tabled, at the end of next fall, after the general election.
“There will be an election in October, and the new government, the new Minister of Finance will have to table a budget update,” said Mr. Girard. Normally, a tax gesture comes with the update in the fall. »
In the last budget, the government announced $500 in assistance for all individuals earning less than $100,000 a year.