Personal Income Tax
The government is proposing to cut the lowest tax rate by one percentage point, from 6.05 per cent to 5.05 per cent, effective January 1, 2010. As a result, Ontarians would benefit from the lowest provincial tax rate in Canada on the first $36,848 of taxable income, based on legislation currently in place in other provinces.
Support for Ontarians 65plus
Doubling Senior Homeowners’ Property Tax Grant in 2010
As announced in the 2008 Ontario Budget, the Ontario Senior Homeowners’ Property Tax Grant is providing up to $250 to help low- to middle-income senior homeowners pay their 2009 property taxes. Starting in 2010, the maximum grant amount will be increased to $500. Over the next five years, the grant will provide about $1 billion in property tax relief to over 600,000 seniors.
Homeowners aged 65 or more can apply for the grant when filing their income tax returns. In 2010, over 575,000 Ontarians 65 plus will be able to benefit from this grant.
Eligible single seniors with $500 or more in property taxes and income of up to $35,000 a year will receive the maximum $500 grant in 2010. Eligible single seniors with income between $35,000 and $50,000 will receive a proportionately smaller grant. Eligible senior couples with $500 or more in property taxes and income of up to $45,000 a year will receive the maximum grant. Eligible senior couples with income between $45,000 and $60,000 will receive a proportionately smaller grant.
Enhancing Ontario Property and Sales Tax Credits for Senior Couples
Since 2003, the government has made several improvements to Ontario Property and Sales Tax Credits to ensure they better reflect circumstances facing low-income seniors. The Ontario Property and Sales Tax Credits for seniors were established in 1992 to assist seniors with modest incomes. In 2004, the government enhanced these refundable credits by increasing the underlying property tax credit amount by 25 per cent, from $500 to $625. In each of the last four budgets, the government also increased the income threshold at which senior couples’ benefits begin to be reduced.
The 2009 minimum level of income guaranteed by the Ontario and federal governments for eligible senior couples is rising because of increases to Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). As a result of these increased amounts, the minimum level of income guaranteed by governments, including Ontario’s Guaranteed Annual Income System (GAINS), for qualifying Ontario senior couples is rising above $24,300 in 2009.
To ensure that seniors who receive the guaranteed minimum level of income to get the full benefit of the Ontario Property and Sales Tax Credits, this Budget proposes to increase the income threshold for senior couples in 2009. The new level would be determined when the federal government finalizes OAS and GIS amounts for 2009. this would benefit about 695,000 recipients this year.
Starting in 2010, the Ontario Property and Sales Tax Credits would be replaced with a new Ontario Sales Tax Credit and a new Ontario Property Tax Credit.