- Tax Free Savings Account (TFSA) limit has increased to $6,500 as a result of rising inflation. The cumulative TFSA limit is now $88,000 for someone who has never contributed to a TFSA, over the age of 18yr since 2009 and a Canadian resident.
- RSP maximum dollar limit has increased to $30,780 up from $29,210 in 2022, with a contribution deadline date of March 1 2023 to claim against income earned in 2022. Your personal limit is still 18% of the previous years earned income less any pension adjustment.
- Old Age Security repayment threshold has increased to $86,012 up from $81,761 in 2022. This means if your net income is less than $86,012 in 2023, you will not have recovery tax to pay.
- Canada Pension Plan (CPP) the maximum pensionable earnings for CPP contributions will increase to $66,600 ($64,900 in 2022), the basic exemption amount stays the same at $3,500 and contribution rates for employees and employers will increase to 5.95% (5.70% in 2022) or $3,754.54.
- First Home Savings Accounts (FHSA) is approved, BUT the date still pending for actual account openings. This account will help first time home buyers save for their first home. It has a lifetime contribution limit of $40,000 with annual contributions capped at $8,000 per annum. Contributions are tax deductible and withdrawals to purchase a home, are tax free.
- First-Time Home Buyers Tax Credit (HBTC) has doubled to $10,000 saving first time home buyers up to $1,500 in tax.
- Multigenerational Home Renovation Tax Credit is in effect Jan 1 2023. This tax credit is available to families wishing to add a secondary unit to their home for the purposes of allowing an immediate or extended family member to live with them. Families may qualify for a tax savings up to $7,500 (15% of eligible renovation costs of up to $50,000).
- Tax on home flipping if you sell your home after possessing it for less than 12 months, any profit may be taxed as business income and the principal residence exemption will not apply. Some exceptions apply such as death or divorce.
- Basic Personal Amount (BPA) will increase to $15,000 ($14,398 in 2022) This non-refundable tax credit is worth $2,250 in tax savings.
- Federal Tax brackets increased to match the inflation adjustment factor of 6.3%. This means you can earn more without bumping up to into the next tax bracket. All five federal tax brackets have been increased by 6.3% and so too have many other benefits.