DID YOU KNOW?

ANTI-FLIPPING RULES ON RESIDENTIAL REAL ESTATE

Starting on January 1, 2023, new anti-flipping rules apply to dispositions of residential property that are held for less than a year. Under these rules, a taxpayer is deemed to carry on a business in respect of the sale of such a property and the sale is deemed to be on account of income and not capital. This means that taxpayers who sell residential property after owning the property for less than a year will not be eligible to claim the principal residence exemption on that sale, and they will have to report the sale of such properties as business income and not as disposition of capital property. Further, any loss in respect of a flipped property is deemed to be nil.

The new anti-flipping rules do not apply if the sale of the property occurred as a result of one or more of the following events:

1. The death of the taxpayer or a person related to the taxpayer;
2. One or more persons related to the taxpayer becoming a member of the taxpayer’s household or the taxpayer becoming a member of the household of a related person;
3. The breakdown of the marriage or common-law partnership of the taxpayer if the taxpayer has been living separate and apart from their spouse or common-law partner for at least 90 days prior to the disposition;
4. A threat to the personal safety of the taxpayer or a related person;
5. The taxpayer or a related person suffering from a serious illness or disability;
6. An eligible relocation of the taxpayer or the taxpayer’s spouse or common-law partner;
7. An involuntary termination of the employment of the taxpayer or the taxpayer’s spouse or common-law partner;
8. The insolvency of the taxpayer; or
9. The destruction or expropriation of the property.

CANADA DENTAL BENEFIT

Seeing a dental care professional is important not only for oral health, but for overall health. In Canada, a third of people do not have dental insurance, leaving many unable to visit an oral health professional to get the dental care they need.

On December 1, the Government of Canada announced that applications for the new interim Canada Dental Benefit are now open. The Canada Dental Benefit will give eligible families up-front, direct payments of up to $650 a year per eligible child under 12 for two years (up to $1,300) to support the costs of dental care services.

In order to ensure potential applicants are aware of the new benefit, the CRA will be issuing over 800,000 emails to prospective recipients who have signed up for e-mail notifications providing an overview of the benefit and advising on how they can apply. Unlike most e-mails from the CRA, clients will not be required to access MyAccount to read an additional message.

About the Canada Dental Benefit

Depending on the adjusted family net income, a tax-free payment of $260, $390, or $650 is available for each eligible child. This interim dental benefit is only available for 2 periods. Recipients can get a maximum of 2 payments for each eligible child. Benefit payments are administered by the Canada Revenue Agency. 

The first benefit period is for children under 12 years old as of December 1, 2022 who receive dental care between October 1, 2022 and June 30, 2023.

In order to access the benefit, applicants must meet all of the following criteria:

• Have a child or children under 12 as of December 1, 2022 and are currently receiving the Canada Child Benefit (CCB) for that child;
• Have an adjusted family net income of less than $90,000;
• Child does not have access to private dental insurance;
• Have filed their 2021 tax return; and
• Have had or will have out of pocket expenses for their child’s dental care services incurred between October 1, 2022 and June 30, 2023, for which the costs are not fully covered or reimbursed by another dental program provided by any level of government.

More information on the Canada Dental Benefit can be found here: Canada Dental Benefit - Canada.ca

STAYCATION TAX CREDIT

Ontario's staycation tax credit comes into effect on Jan. 1 and will last for the duration of 2022.The program was announced as part of the Doug Ford government's Fall Economic Statement, which was tabled in November. Ontarians will get a 20 per cent personal income tax credit on eligible accommodation, between Jan. 1 and Dec. 31, up to a maximum of $1,000 for an individual and $2,000 for a family, for a maximum credit of $200 or $400 respectively. Ontario residents could apply for this refundable credit when they file their 2022 personal tax returns and benefit even if they do not owe any tax.

MINIMUM WAGE INCREASE 

The Ontario government announced earlier this year the provincial minimum wage will increase to $15 per hour on Jan. 1.   The minimum wage will then continue to rise by the rate of inflation following that date, the government said.   The bump will also apply to liquor servers in the province, who currently make $12.55 per hour.   

DIGITAL ID PROGRAM 

After a delay due to the rollout of vaccine certificate system, Ontario’s digital ID program will launch sometime in 2022, though the government hasn't given a specific date.  When the digital ID program launches, Ontarians will be able to have an electronic version of their government ID – like driver's licenses and health cards – stored in their digital wallet app.  The digital ID program will allow people and businesses to prove who they are both online and in person without using a physical card.  According to the government, the digital ID will offer more privacy to users than a physical ID.   Ontarians are not required to participate in the digital ID program.

WORK-LIFE BALANCE RULES 

In late November, the Ontario government passed new laws it says will help employees disconnect from the office and create a better work-life balance.  The "Working for Workers Act" requires Ontario businesses with 25 employees or more to have a written policy about employees' rights when it comes to disconnecting from their job at the end of the day. These workplace policies could include, for example, expectations about response time for emails and encouraging employees to turn on out-of-office notifications when they aren’t working, the government says.  According to the act, between Jan. 1 and March 1 of each year an employer must ensure it has a written policy in place for all employees with respect to disconnecting from work.

NON-COMPETE RULES BANNED 

As part of the "Working for Workers Act" was ending the practice of non-compete clauses in Ontario.   Non-compete clauses usually prevent people from exploring other work opportunities and higher salaries at other jobs.  According to the government, Ontario is the first jurisdiction in Canada, and one of the first in North America, to ban non-compete agreements in employment.