Buying and Selling a Home: Budget 2022 Proposals
CRA Programs - Buying and Selling a Home

Buying and Selling a Home: Budget 2022 Proposals

The 2022 Federal Budget included several proposals that would significantly change the taxation environment when buying and selling a home. Broadly, the government proposed various incentives for first-time buyers and extended family units in addition to bright-line tests/restrictions for those purchasing homes for profit (e.g. home flippers). Taxpayers should consider how the changes will affect their intended purchases and sales. In some cases, it may be beneficial to expedite a purchase or sale, while in others, it may…

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Enhancing the Value of Owner-Managed Business: Starting the Transition Early

Many owner-managers are shocked at both the difficulties in finding a buyer for their business and the low prices an owner-managed business often commands. A recent Intelligent Work article (How Does 10x-ing Value Work in an Owner-Managed Business?, John Mill) discussed guidance provided to Harvard MBA students regarding investing in owner-managed businesses. That guidance included the reality that these businesses with earnings between $750,000 and $2 million tend to be priced at 3x to 5x…

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Canada Emergency Response Benefit (CERB): Repayments

Self-employed individuals whose net self-employment income was less than $5,000 will not be required to repay CERB, as long as their gross self-employment income was at least $5,000 (in 2019 or the previous 12 months preceding the application) and they met all other eligibility criteria. On May 12, 2021, a remission order that would allow this relief was released. For the debt to be remitted, individuals will need to file their 2019 and 2020 tax…

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Covid-19 Medical Expenses: Tax Treatment

Medical expenses eligible for a personal tax credit are limited to those specifically provided for by the Income Tax Act. While an expense may clearly relate to an individual’s health, it may still not be an eligible medical expense. CRA recently provided comments on a number of medical expenses related to COVID-19. Face masks In a February 25, 2021 Technical Interpretation, CRA opined that the costs of a non-medical mask, that is mostly used to protect others from…

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Travel Allowances: Limited Distance Covered

In a March 5, 2021 French Technical Interpretation, CRA commented on whether a travel allowance paid to employees on a per kilometre basis, but only up to a limited number of kilometres, could be a non-taxable allowance. For the allowance to be non-taxable, it must be a reasonable allowance for the use of a motor vehicle when travelling in the performance of employment duties. Further, measurement of the use of the vehicle must be based…

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CRA Collections: Potential Impact on Business

Photo by cottonbro from Pexels As some businesses struggle with cash flow, they may be motivated to prioritize suppliers and other creditors ahead of CRA. A recent court case demonstrates CRA’s power to collect tax arrears and the impact of CRA exercising this power on a business. In a June 11, 2021 Court of Queen’s Bench of Alberta case, the taxpayer had fallen into arrears in respect of both GST/HST and payroll remittances. Payment arrangements were entered into…

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Canada Emergency Rent Subsidy (CERS): More Clarification

CERS provides support to businesses by covering a portion of rent and property ownership costs of qualifying property. The government has recently extended access to this program until October 23, 2021. The CERS program has the following two components: The base CERS subsidizes eligible expenses based on the applicant’s revenue decline compared to pre-pandemic earnings; and, The lockdown support component, which provides an additional subsidy for eligible applicants subject to a lockdown under a public…

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Immediate Capital Asset Write-Off: Budget 2021

The 2021 Federal Budget proposed to allow immediate expensing of certain property acquired by a Canadian-controlled private corporation (CCPC) on or after April 19, 2021 (Budget Day) and before 2024. Up to $1.5 million per taxation year is available (shared among associated CCPCs, and prorated for short taxation years), with no carry-forward of excess capacity. Property eligible for this immediate write-off is quite broad. It includes all depreciable capital property, other than certain assets with…

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Employees Working From Home During COVID-19: Personal Tax Deductions

Due to the COVID-19 pandemic, many employees worked from home during a portion of 2020. On December 15, 2020, CRA released guidance on two new options available for employees claiming expenses related to working from home on their personal tax return.  While this will clearly impact an employee’s personal tax filing, it should also be considered by employers. A key question employers need to answer is whether they should provide an employer certification in respect…

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Canada Emergency Rent Subsidy: More COVID-19 Support

The Canada Emergency Rent Subsidy (CERS) provides a federal subsidization of expenses associated with both commercial rental payments and property ownership. The program commenced on September 27, 2020 and is scheduled to continue until June 2021. The CERS program parallels the Canada Emergency Wage Subsidy (CEWS) program in that it is largely based on the same revenue decline calculations and related elections. Also, the periods covered by each CERS application are four-weeks in length, and…

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