Five ways the federal economic and fiscal update affects you
Wednesday, January 12, 2022
At a glance (read time: 1 minute)
- There are new taxes and tax credits that may affect home owners and small businesses.
- The government plans to spend billions to build new affordable housing and fund COVID releif.
Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled an Economic and Fiscal Update on December 14, 2021.
The update includes information and projections, both new and previously announced in Budget 2021.
Here’s a summary of initiatives related to property buying and selling and to the business of real estate.
- COVID funding: $1.7 billion to continue to keep Canadians safe through vaccines, boosters, rapid tests, therapeutics, and more to 2027.
- Affordable housing: $70 billion for the National Housing Strategy to build 125,000 affordable homes. There will be partnerships with provinces/territories and municipalities. Details will be forthcoming in Budget 2022.
- Underused Housing Tax: as of January 1, 2022, non-resident, non-Canadian owned vacant or underused residential real estate will be taxed annually at one per cent. There will be an exemption for qualifying vacation and recreational properties.
- Small Businesses Air Quality Improvement Tax Credit: a 25% refundable tax credit for small businesses improving air quality through new or updated ventilation and air filtration systems to a maximum of $10,000 per building. Where there are multiple locations, the maximum is $50,000. Expenditures must be made from September 1, 2021 to December 31, 2022.
- Home office expense deduction: introduced in 2020, this deduction is extended for 2021 and 2022 and increases to $500 annually.
Read the Economic and Fiscal Update (opens 96-page pdf).
Watch the Hon. Chrystia Freeland deliver the update (2 hours 21 minutes recording on YouTube).
The next federal budget, expected in the spring of 2022, will provide more detail on the government’s programs and finances.
