First buyers | False start for the CELIAPP

April Fool’s Day awaits the first buyers who intend to bet on the CELIAPP, one of the key measures of the last federal budget. You circled the date of 1^is April to take advantage of this new tax tool? The countdown will be longer than expected, found The Press.

Posted at 5:00 a.m.

“As soon as possible”, “in the spring”, “as soon as the summer” and “for the 2023 tax year”… These are the answers of the main financial institutions when asked if they will be ready to offer the tax-free savings account for the purchase of a first home (TFSAP), next month.

Sanctioned by Ottawa last December, this tax product, intended for first-time buyers and which combines the advantages of RRSPs and TFSAs, should, in principle, come into effect on 1^is april. The tool aims to give first-time buyers a boost as property prices become increasingly unaffordable. However, the Trudeau government and the financial sector do not seem to have finished tying all the strings.

According to our information, banks and other financial groups are still waiting for documents from the federal authorities, in particular to be able to properly align themselves with the rules of the Canada Revenue Agency.

Professor at the University of Sherbrooke Luc Godbout is of the same opinion.

What I understand is that there is an issue for financial institutions. Computer systems must be prepared to know how to issue statements. If the CELIAPP had been attached at the time of the budget [fédéral de 2022]we would have saved some time.

Luc Godbout, professor at the University of Sherbrooke

The main thing, for Mr. Godbout, is to make sure that everything is in order before the end of the year in order to avoid losing a year of contributions. We can pay $8,000 annually into a TFSA to accumulate the down payment for the purchase of a first property. Contributions are fully tax deductible, like those paid into an RRSP. In addition, no tax will be charged on the return, like the TFSA. Contributions cannot exceed a maximum of $40,000.

It was not possible to obtain a status report from Ottawa regarding the implementation of the CELIAPP and the target of the 1^is avril.

” The account […] is one of the important measures that will help Canadians save to buy their first home,” said Adrienne Vaupshas, ​​spokesperson for Finance Minister Chrystia Freeland, in an email.

Complex lashing

Desjardins Group provided the most details regarding the challenges to be overcome. The financial cooperative group says it is doing “everything” to offer the product “from the summer”.

“This requires significant computer development, but also coordination with the Canada Revenue Agency to have an approved membership contract that will confirm the individual’s eligibility, but also the possibility for Desjardins to file the annual declaration of transactions at the Agency which allows the issuance of tax slips, for example,” explained its spokesperson, Jean-Benoît Turcotti.

The largest financial institution in the country, the Royal Bank of Canada plans to launch the CELIAPP in the spring, but has “no other information to communicate”, underlines a spokesperson, Jessica Assaf. On the side of the Bank of Montreal, for example, we are content to mention “the 2023 tax year”. At the National Bank, there is no specific timeline, but its senior vice-president of communications, Debbie Cordeiro, says that the deployment will be done “very quickly” following the 1^is avril.

“It’s going to happen this year, I can confirm that to you,” she said.

All the banks are in the process of preparing in a concerted way. We discuss a lot on the subject. But it is indeed in the cards for this year.

Debby Cordeiro, Senior Vice-President, Communications, National Bank

Since its members will have to wait a few more months before being able to benefit from the TFSA, Desjardins is proposing a transitional measure: a non-registered term savings account at the “promotional” rate of 4.65%. The amount can then be paid into the CELIAPP. The interest which will be accumulated in the interval will however be taxable.

No effect on the market

The slower-than-expected deployment of this new tax measure should not upset the forecasts for the real estate market.

“It is above all the interest rates that are of concern at the moment, underlines Paul Cardinal, director of the economic service at the Association of construction and housing professionals of Quebec. Savers haven’t put any money into the TFSA yet, so it doesn’t make a difference in the short term. »

Desjardins economist Hélène Bégin agrees. It is only in “two or three years” that the effect of the CELIAPP is likely to have an influence. According to her, “CELIAPP or not, the rates are too high for young households to be able to buy”.

With the collaboration of Martin Vallières, The Press

Learn more

• 15 ans

  Deadline to buy a property following the opening of the CELIAPP

  Source: Government of Canada

  18 ans

  Minimum age to open a TFSA

  Source: Government of Canada