Changes to the budget of the Minister of Finance.
Labour funds: RSP FTQ, Fondaction, will be impacted as of 2024.
Quebec is changing the tax credit for the purchase of shares of the Solidarity Fund QFL and Fondaction by excluding wealthier workers and extending the minimum holding period to five years. These changes are intended to make the tax benefit accessible to a greater number of people and to rebalance investment opportunities for less fortunate workers.
Among the recent adjustments, Quebec has increased the holding period for shares of a labour-sponsored fund to five years from the previous two.
(Quebec) The tax credit associated with the acquisition of shares of the Solidarity Fund QFL and Fondaction will no longer be systematically granted to wealthy individuals. The Quebec government now conditions this credit to a ceiling based on the annual income of individuals and extends the minimum holding period of the shares to five years.
More specifically, employees with income over $112,655 in 2022 – an amount that will be indexed annually – will no longer be able to benefit from the tax advantage offered by labour-sponsored funds, whose objective is to invest in the Quebec economy. The changes announced Tuesday in Finance Minister Eric Girard’s budget will take effect for the 2024 tax year.
Excluding the most affluent workers, about 60,000 new savers should benefit from this measure, according to the Legault government’s estimates.
“The goal is to make this available to more people,” Girard said at a press conference. “Employees in the higher [salary] categories were electing the maximum [contributions] and the amount was lower in the lower categories.”
As subscription periods shorten for labour-sponsored funds due to sustained demand, Quebec believes a rebalancing was necessary to give less affluent workers more time to save for stock purchases.
An individual investing in a labour-sponsored fund receives a tax credit equal to 15% of the amount of the transaction – capped at $5,000. The tax benefit cannot exceed $750. The federal government also offers a 15% tax credit
This change could impact your tax return.
For a first time homebuyer, it is important to understand the options related to the Home Buyers’ Plan (HBP) or the new TFSAPP.
