The new tax-free first home savings account (FHSA) is one step closer to reality.<\/p>\n
Deputy Prime Minister and Finance Minister Chrystia Freeland tabled Bill C-32<\/a> Friday to implement proposals from the government’s fall economic statement as well as several outstanding tax and estate-planning proposals from the 2022 federal budget, including the FHSA.<\/p>\n The bill includes a new FHSA provision: it states that any holder carrying on a business in the FHSA will be liable for the associated taxes. Wording in the bill states that the holder is \u201cjointly and severally, or solidarily, liable with the trust to pay\u201d tax attributable to carrying on a business. The issuer’s tax liability would be limited to the property held in the FHSA only. (Editor’s note, Nov. 23<\/em>: Bill C-32 also stated that the FHSA will come into force on April 1, 2023, and that a homebuyer can use both the FHSA and the Home Buyers’ Plan for the same home purchase<\/a>.)<\/p>\n The bill also delays the implementation of enhanced reporting requirements for trusts<\/a> that were first proposed in the 2018 federal budget. The effective date has been pushed to taxation years that end after Dec. 30, 2023, instead of Dec. 30, 2022. This is the second time that the date has been changed since the proposal was introduced.<\/p>\n “This is good news, since it allows time for taxpayers to obtain the required information and for government to provide clarification of the proposed rules,\u201d said Dino Infanti, national leader, Enterprise Tax, with KPMG, in an email.<\/p>\n For example, the rules currently apply to bare trusts, and tax practitioners have expressed concern that clients may have bare trusts without realizing it.<\/a><\/p>\n Among other proposals, Bill C-32 also implements the revised anti-flipping rule<\/a> announced in Thursday’s fall economic statement, as well as:<\/p>\n\n