Important information for 2015 income tax returns - New assistance program for seniors
This situation can occur in rural municipalities, among other places, where some sectors have experienced significant variances in property value growth, such as cottage areas with residences located near bodies of water. As a result, the tax burden of some residences has skyrocketed relative to that of other dwellings in the same municipality.
For low- and medium-income retirees who have been living in this type of residence for many years, a large municipal tax hike can be a real issue. To help seniors facing property tax increases, the Quebec government has introduced a grant program starting in 2016.
Seniors can obtain a grant for a given year with respect to an entirely residential assessment unit consisting of only one dwelling (i.e. a covered residence) if they meet the following conditions.
- On December 31 of the previous year, they:
- were resident in Quebec;
- were 65 or over;
- had owned the covered residence for at least 15 consecutive years (note that this period can include a period during which the applicant’s spouse owned the residence before transferring ownership to the applicant).
- They received a municipal tax bill in their name for the covered residence for 2016 (if they co-owned the residence, the municipal tax bill may have been issued in another co-owner’s name).
- The covered residence serves as their principal residence.
- Their family income for the previous taxation year (the amount on line 275 of the tax return plus, if they had a spouse on December 31, 2015, the amount on line 275 of their spouse’s tax return) was $50,000 or less.
- The increase in value of the covered residence resulting from the new assessment roll exceeds the average increase for single dwelling residences in the municipality by at least 7.5%.
The government assistance will consist of a grant allocated during the processing of 2015 income tax returns and will be based on various conditions. Seniors will therefore have to apply for the grant when filing their 2015 tax return with Revenu Québec.
Eligible taxpayers can apply for the grant by:
- completing form TP.1029.TM-V, Grant for Seniors to Offset a Municipal Tax Increase (note that seniors must first know the potential amount of the grant as shown on their municipal tax bill for the current year or on the document issued by the municipality);
- entering the result from line 43 of form TP-1029.TM-V on line 462 of their income tax return for the 2015 taxation year;
- filing form TP.1029.TM-V, duly completed, along with their return.
To simplify calculating the amount of the grant seniors may be entitled to for a given year, municipalities must provide the potential amount of the grant that is due to the increase in their residence’s property value for a given fiscal year if, as a result of the coming into force of the assessment roll for the fiscal year, this increase is 7.5% above average. This amount must be shown on the municipal tax bill sent for that same year.
If it is not indicated directly on the municipal tax bill, this information can also be provided on form FM-210.1-V, Amount of the Potential Grant to Offset a Municipal Tax Increase.
To receive a grant for a given year, seniors will not be required to include a copy of their municipal tax bill with their tax return. However, they must keep it for at least six years in case they are audited by Revenu Québec.
Seniors who co-owned a property on December 31, 2015 can share the amount of the grant with the other co-owners, including their spouse. In this case, each co-owner must complete a separate form TP-1029.TM-V.
Sale at the start of 2016
Seniors who dispose of their residence after December 31, 2015, but before the invoice date shown on the 2016 municipal tax bill are no longer eligible for the grant, even if the municipality issues a tax bill in their name for 2016.
Francis Belzile, M. Fisc., FCPA, FCA
Université du Québec à Rimouski, Lévis Campus