Location: carl sagan's universe
Posted on: 28-01-09 00:04:38
Both existing and aspiring homeowners get a nice tax break. First-time buyers will be allowed to claim a 15-per cent tax credit on up to $5,000 in start-up costs like legal fees, which could add up to $750 in savings.
As well, anyone looking to tap into the federal Home Buyers' Plan, which allows those buying a first home to a make tax-free withdrawal from their RRSPs, will now have more to work with as the new withdrawal limit is now $25,000, up from $20,000.
But it's the new Home Renovation Tax Credit that will likely have the broadest appeal. Home and cottage owners can get busy on that new kitchen, thanks to a 15-per-cent credit on up to $10,000 in renovations. The maximum credit will work out to $1,350 since the first $1,000 in repairs won't really count.
To qualify, the work has to be done before February 1, 2010 and includes fixing up bathrooms or basements, putting on additions or decks, installing a new furnace, or resurfacing the driveway. Furniture or appliances won't count, however, and it's not really clear how 'sweat equity' is going to be valued for those that like to do things themselves.
On the personal tax front, the budget boosts the amount you can earn tax-free from $9,600 in 2008 to $10,320 for the 2009 tax year. At the same time, you can now earn a bit more before jumping up to the next tax bracket.
For example, the breakpoint for the first federal tax bracket moves from $37,885 in 2008 to $40,726 in 2009. The upper limit of the second tax bracket jumps to $81,452. While no changes were introduced to the other brackets, higher-income earners do still benefit from changes to the two bottom rates. Essentially, this means a few thousand dollars of your income gets taxed at the 15 per cent rate instead of at the 22 per cent or 26 per cent rate.
Budget estimates suggest that a two-parent/two kid family earning $80,000 would get roughly $200 in relief while the same family, if it earned only $20,000, would see close to three times that amount. Since these thresholds would have jumped a bit anyway since they're automatically indexed to inflation, these numbers seem a tad generous. At any rate, most families will end up with a few hundred dollars more in their pocket.
Seniors aged 65 or more get some tax relief with a $1,000 increase to the Age Credit, which rises from $5,408 to $6,408 for 2009. On a net basis, this means an extra tax savings of up to $150. However, this credit is tied to your income level and starts to fade away once you pass the $32,000 income, disappearing totally at around $75,000.
But who are Ashok and Asha?
-----------------------------------------------------------------
"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by investpro
Both existing and aspiring homeowners get a nice tax break. First-time buyers will be allowed to claim a 15-per cent tax credit on up to $5,000 in start-up costs like legal fees, which could add up to $750 in savings.
As well, anyone looking to tap into the federal Home Buyers' Plan, which allows those buying a first home to a make tax-free withdrawal from their RRSPs, will now have more to work with as the new withdrawal limit is now $25,000, up from $20,000.
But it's the new Home Renovation Tax Credit that will likely have the broadest appeal. Home and cottage owners can get busy on that new kitchen, thanks to a 15-per-cent credit on up to $10,000 in renovations. The maximum credit will work out to $1,350 since the first $1,000 in repairs won't really count.
To qualify, the work has to be done before February 1, 2010 and includes fixing up bathrooms or basements, putting on additions or decks, installing a new furnace, or resurfacing the driveway. Furniture or appliances won't count, however, and it's not really clear how 'sweat equity' is going to be valued for those that like to do things themselves.
On the personal tax front, the budget boosts the amount you can earn tax-free from $9,600 in 2008 to $10,320 for the 2009 tax year. At the same time, you can now earn a bit more before jumping up to the next tax bracket.
For example, the breakpoint for the first federal tax bracket moves from $37,885 in 2008 to $40,726 in 2009. The upper limit of the second tax bracket jumps to $81,452. While no changes were introduced to the other brackets, higher-income earners do still benefit from changes to the two bottom rates. Essentially, this means a few thousand dollars of your income gets taxed at the 15 per cent rate instead of at the 22 per cent or 26 per cent rate.
Budget estimates suggest that a two-parent/two kid family earning $80,000 would get roughly $200 in relief while the same family, if it earned only $20,000, would see close to three times that amount. Since these thresholds would have jumped a bit anyway since they're automatically indexed to inflation, these numbers seem a tad generous. At any rate, most families will end up with a few hundred dollars more in their pocket.
Seniors aged 65 or more get some tax relief with a $1,000 increase to the Age Credit, which rises from $5,408 to $6,408 for 2009. On a net basis, this means an extra tax savings of up to $150. However, this credit is tied to your income level and starts to fade away once you pass the $32,000 income, disappearing totally at around $75,000.
Do not understand how a Tax saving of $200 p.a. or only $8.25 biweekly (As per Investpro) effective from year 2009 will encourage canadians to spend more and save economy from recession as per Canadian govt.!
Good luck and God bless everyone!
Quote:Because there is nothing else you can do with the money.
Originally posted by kalia
Do not understand how a Tax saving of $200 p.a. or only $8.25 biweekly (As per Investpro) effective from year 2009 will encourage canadians to spend more and save economy from recession!
You can invest it in the stock market and lose all of it
Or you can put it in a "high interest" savings account making 2%
So the most likely option is to spend it.
-----------------------------------------------------------------
"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
lol
-----------------------------------------------------------------
Pooja
Location: carl sagan's universe
Posted on: 28-01-09 16:20:53
Quote:
Originally posted by pratickm
But who are Ashok and Asha?
Old time Mumbai college equivalent of John and Jane
common person/Tom, Dick and Harry/Haresh, Suresh and Ramesh- in other words, as most care about the micro scene and not the macro scene like $12b for infrastructure etc.- though it might trickle down to them.
There is more in the budget that directly affects Ashok and Asha- needs to be analyzed.
