Conservative tax platform
Continuing with their recent practice of select, focused tax cuts, the Conservative government has announced a number of tax measures aimed at delivering a bit of tax relief to nearly every demographic.
HERE'S A QUICK REVIEW OF THE TORIES' TAX CAMPAIGN:
Homebuyer's tax credit Firsttime homebuyers would be eligible for a new tax credit of up to $5,000 of the closing costs toward the purchase of a new home. The credit would be phased in over four years. Eligible closing costs include home inspection fees, land transfer tax, legal fees, mortgage loan insurance premiums, title insurance and land surveys.
Closing costs can typically add from 1.5% to 4% to the purchase price of a home At the current non-refundable credit rate of 15%, this new credit could be worth up to $750 per person.
Income-splitting Last year the Tories introduced a limited form of income-splitting for pension income which has the potential to save senior couples thousands of dollars of income tax and, in many cases, restore clawed-back Old Age Security benefits.
A re-elected Tory government would permit families in which one partner is not working full time in order to care for a family member -child or adult with a disability -- to split their income with their partner for tax purposes.
REGISTERED DISABILITY SAVINGS PLAN (RDSP) IMPROVEMENTS
The RDSP, which is expected to be available by December, 2008, is a new registered savings plan that permits individuals to save up to $200,000 on a tax-deferred basis for someone with a disability. It also comes with generous government incentives in the form of the new Canada Disability Savings Grant and the Canada Disability Savings Bond, which can provide up to $90,000 in free government money based on only $30,000 of personal contributions.
The Tories would introduce a new rule to permit the proceeds of a deceased parent's RRSP or RRIF to be rolled over tax-free into the RDSP of a financially dependent disabled child or grandchild, provided the rollover was within the remaining $200,000 of RDSP contribution room. Senior age credit The senior age credit amount, available to the approximately 4.5 million Canadians aged 65 or older (subject to an eligibility phaseout based on income), is now $5,177. The Tories promised to increase this by an additional $1,000, which, on top of already announced increases, will bring it to about $6,750 within four years. Again, this is a non-refundable credit and, therefore, is worth 15% of the amount, less any phase-out beginning at an income level of approximately $32,000. Universal child care benefit (UCCB) Currently, parents with kids under six receive $100 a month in the form of the UCCB. This amount has not been increased since its introduction in July, 2006. The Tories would fully index the UCCB to inflation as well as make the amount completely tax-free for single-income parents.
TAX BREAKS FOR SMALL BUSINESS
Currently, private corporations that earn "active income" can take advantage of the small business tax rate on the first $400,000 of annual earnings. The Tories would increase the small business limit to $500,000.
Capital-gains exemption The Conservatives increased the lifetime capital-gains exemption on the sale of qualified farm and fishing property or qualified small business corporation shares to $750,000 from $500,000 in last year's federal budget. A new Tory government would index the $750,000 amount to inflation.