Quebec’s 2018 provincial budget dropped Tuesday and offered new tax credits, but no personal tax cuts. Here are three highlights your clients need to know:

> A tax credit for first-time homebuyers
The government has chosen to promote home ownership by offering tax relief to people who acquire their first principal residence or who, because of a severe disability, have to purchase an accessible home.

The maximum value of the tax credit is $750, much like the federal first-time homebuyer’s credit.

An individual Quebec resident who has acquired a qualifying residence may deduct $5,000 from his income. That $5,000 will be multiplied by 15%, which is the rate for Quebec’s lowest tax bracket.

Note that the unused portion of the homebuyer tax credit is not transferable to a spouse under the spousal transfer mechanism.

The qualifying home must have been acquired after Dec. 31, 2017. Note that the acquisition of a share of the capital stock of a housing cooperative may be eligible.

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> Extension of the RénoVert credit
The RénoVert tax credit, worth up to $10,000 per qualifying home, covers 20% of the portion of eligible expenditures over $2,500 paid by an individual for eco-friendly renovations to a principal residence or cottage.

Homeowners now have until March 31, 2019 to enter into an agreement with a qualified contractor and until Dec. 31, 2019 to pay the renovation expenses. The program has been extended by one year.

According to the Quebec Economic Plan, extending the RénoVert tax credit will provide tax assistance of nearly $172 million to individuals who will carry out eco-friendly renovation work after March 31. The credit is expected to cost the government $521 million over the three years of its existence.

> Enhanced tax credit for experienced workers
Workers aged 61 and older will now receive a credit to eliminate the taxes payable on eligible work income beyond the first $5,000. Previously, this credit was only available to workers aged 62 and older.

For those aged 61 or 62, the tax credit covers $3,000 in eligible work income above the $5,000 threshold. For those aged 63, the amount rises to $7,000 above the threshold, and for those aged 64, the amount is $9,000. The maximum amount, which is for workers aged 65 and older, is $11,000 above the threshold.

This credit is meant to encourage more experienced workers to stay in or return to the labour market, according to the Quebec Economic Plan of March 2018. It also defines eligible working income for a particular year as:

  • remuneration included in the computation of income for the year from employment;
  • income from any enterprise a person operates alone or as a partner (the person must actively participates in the enterprise’s losses); and/or
  • grants received in the year to undertake research or similar work.

For full coverage of the Quebec budget from Finance et Investissement, go here (in French).