2023 Fall Economic Statement Update
On November 21st, Deputy Prime Minister and Finance Minister Chrystia Freeland presented the Federal Government’s 2023 Fall Economic Update in Ottawa. We’ve outlined key points below to assist you in navigating the latest updates and changes in business and personal tax matters:
Short-Term Rentals
The Federal Government has announced stringent measures targeting short-term rentals, including properties listed on platforms like Airbnb and Vrbo, in response to the housing crisis. Starting January 1, 2024, income tax deductions for expenses related to earning short-term rental income, including interest expenses, will be disallowed in provinces and municipalities that have prohibited such rentals.
Underused Housing Tax (UHT)
Introduced on June 9, 2022, the UHT affects certain residential property owners as of December 31, 2022. The 2023 Fall Economic Statement proposes to eliminate the filing requirement for specific owners in 2023 to alleviate the compliance burden. “Excluded owners” for UHT purposes include specified Canadian corporations, partners of specified Canadian partnerships, and trustees of specified Canadian trusts. Technical changes will be made, such as eliminating the filing requirement for condominiumized apartment buildings. Additionally, the minimum penalties will be reduced to $1,000 for individuals (from $5,000) and $2,000 for corporations (from $10,000), effective for 2022 and subsequent years.
Removing GST/HST from Psychotherapists’ and Counselling Therapists’ Service
The 2023 Fall Economic Statement proposes exempting psychotherapists and counselling therapists from the GST/HST on their professional services to individuals, aligning them with other health care practitioners.
Joint Venture Election Rules
Proposed changes to the Joint Venture Election Rules for GST purposes are outlined in the 2023 Fall Economic Statement. The Government will initiate a consultation process on these proposed rules.
Input Tax Credits
The 2023 Fall Economic Statement introduces the Clean Hydrogen Investment Tax Credit as a new input tax credit to support investments in the hydrogen industry. Additionally, changes are proposed to the previously announced Clear Electricity Investment Tax Credit.
It is crucial for businesses and individuals to stay informed about these updates and consult with tax professionals to ensure compliance and understand the implications for their specific situations.
For further details and comprehensive information, we recommend reviewing the official documentation or consulting with a qualified tax advisor.
If you have any questions or require assistance in navigating these changes, please feel free to reach out to our team.