2023 Tax Highlights for Individual and Business
2023 tax updates
Publish at: 2023-11-14
As we bid farewell to the year 2023 and welcome the arrival of 2024, it’s an opportune moment to catch up on some key highlights and changes before we pave the way for the coming year. In this update, we will look at some tax updates for individuals and corporations.
Underused Housing Tax (UHT)
The Minister of National Revenue announced that the deadline for filing the 2022 UHT return will be extended again to April 30, 2024, without being charged penalties or interest. This extension allows those “affected owners” who missed the initial filing deadline of October 31, 2023 to get back on track and avoid the fail-to-filing penalty of $5,000 for individuals and $10,000 for corporations.
CRA has an online self-assessment tool to help you identify whether you are an affected owner. You can easily determine by answering the questions.
If you are an affected owner of a residential property in Canada, you must file the 2022 and 2023 UHT return before April 30, 2024 for each residential property you owned in 2022 and 2023.
Home accessibility tax credit (HATC)
This is a non-refundable tax credit for eligible individuals or qualifying individuals to claim when they make home renovations that enhance access to their dwelling. Starting in 2022, the annual expenditure limit has been increased to $20,000, which allows taxpayers to claim a tax credit of up to $3000.
** Qualifying individuals – eligible for disability tax credit (DTC) individuals or seniors over 65 years old
** Eligible individuals – directly related persons or indirectly related persons, who have claimed the amount for an eligible dependant, or Canada caregiver amount of qualifying individual.
Deadline for Contribution of First Home Saving Account (FHSA)
Unlike RRSPs, the last day for contributing to an FHSA is December 31. There is NO first 60 days of the year rule applied to FHSA contribution. The annual contribution limit for FHSA is capped at a maximum of $8000, with a lifetime limit of $40,000. It is important to note that only the account holder of the FHSA can make a contribution and claim their contribution as a tax deduction on their income tax return. If you are planning to contribute to your FHSA and wish to claim the deduction on your 2023 income tax return, please ensure to find your financial institution before the deadline of December 31, 2023.
Enhanced Ontario Rebate for Builder (Updates)
After the announcement regarding the Federal GST rebate for builders, the government of Ontario decided to align with the federal government to increase the PST paid on qualifying units from 75% to 100%. This implementation granted the builder to entirely eliminate the 13% HST on qualifying units. For example, if a qualifying unit is valued at $500,000, the combined effect of the enhanced Ontario PST rebate and enhanced Federal GST rebate results in a substantial total rebate of $65,000.
The criteria for qualifying units are the same as Enhanced Federal GST rebate, please see our previous post “Enhanced GST Rental Rebate for Builder” for more details.
Designated Immediate Expensing Property
DIEP refers to a measurement of a new depreciable property where corporations can claim the full cost of the property in the year purchased instead of depreciating over its useful life. Canadian Controlled Private Corporation (CCPC) has until December 31, 2023 to acquire eligible property for immediate expensing measures. This measure allows corporations to claim up to $1.5 million in tax depreciation for eligible property acquired or available for use before January 1, 2024. It’s important to note that any eligible property acquired or made available for use after December 31, 2023 will no longer qualify for this expensing measure. However, sole proprietors and individuals can benefit from this measure until December 31, 2024.
As we step into 2024, understanding and leveraging these changes can have an impact on financial planning and tax optimization.