Question Period Note: 2022-2023 SUPPLEMENTARY ESTIMATES (C) – MAKING HOUSING MORE AFFORDABLE

Why is the Canada Revenue Agency seeking funding in the Supplementary Estimates (C) for the administration of tax measures related to making housing more affordable?

• The Canada Revenue Agency (CRA) is a client-focused agency which exists to serve Canadians.
• The CRA is seeking $41.8M in funding to implement and administer the Tax-Free First Home Savings Account, which aims to help Canadians save for the purchase of their first home.
• The CRA is working with financial institutions to have the infrastructure in place for individuals to be able to open a Tax Free First Home Savings Account and start contributing in 2023.
• The CRA is also asking $1.7M which will be used to implement and administer the Multigenerational Home Renovation Tax Credit, a refundable tax credit for renovations on homes that allow seniors or disabled individuals to live with a family member.

Through the 2022-2023 Supplementary Estimates (C), the Canada Revenue Agency (CRA) is seeking $43.5M for the administration of tax measures related to making housing more affordable.

Tax-Free First Home Savings Account ($41.8M): The Tax-Free First Home Savings Account (FHSA) will allow qualifying individuals to save to buy their first home, subject to an annual contribution limit of $8,000 and a lifetime contribution limit of $40,000. Current estimates suggest there will be one million FHSA holders by 2028, with 100,000 individuals making tax-free withdrawals annually thereafter.

The FHSA is designed based on aspects of the existing Tax-Free Savings Account and Registered Retirement Savings Plan / Home Buyers’ Plan processing models. The FHSA will be handled similarly in that registration, processing, accounting, and output processes will need to be developed. Investments in the CRA’s systems are required to enable the CRA to administer the FHSA program on an ongoing basis, irrespective of ultimate take-up.

Multigenerational Home Renovation Tax Credit ($1.7M): Beginning in 2023, the Multigenerational Home Renovation Tax Credit will allow qualifying individuals to claim 15% of up to $50,000 in qualifying expenditures (for a maximum credit of $7,500) with respect to a qualifying renovation associated with building a secondary unit. It is estimated that approximately 10,000 households would benefit from this new tax credit.

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