The country has always been a popular immigration destination for its career opportunities, quality schooling and healthcare while the high standards of infrastructure has been attractive enough - regardless of tax benefits. But this new tax break will certainly be a new carrot on the stick for would be migrants.
This law then applies to migrants too and while migrants are struggling to settle into their new country after just having incurred expenses associated with their visas and relocation a tax break is certainly an attractive feature.
It is to be noted that the new tax rules will mainly benefit the low- and mid-income earners reports Canada Immigration and Citizenship
For those earning between $45,282- $90,563, the tax rate on taxable income will be reduced from 22% to 20.5%. while Individuals earning over $200,000 will be taxed 33%.
The changes will go into effect on 1 January, 2016.
Changes to TFSA
What will be interesting for the new immigrant is the changes regarding the tax - free savings account (TFSA) that will go into effect on the same date.
The maximum amount that can be deposit per year onto this account has been set back at $5,500.
The TFSA is an interesting saving option for immigrants, as it does not require previous income in Canada. This is in contrast with the Registered Retirement Saving Plan (RRSP), where a built up of previous income is required in order to create contribution room.
Further, TFSA is a tax-sheltered saving option in the sense that withdrawals are tax-free and do not impact any other benefits and tax credits. However, contributions to TFSAs are not tax-deductible, whereas contributions to the RRSP are.
The changes made are in line with the promises of the newly elected liberal government.
If you are considering or planning a move to New Zealand and wondering how the new law will impact on your bank account seek advice from one of the friendly professionally qualified immigration practitioners at New World Immigration.