How shifting tax rates and fees will affect Quebecers' bottom line in 2016
Daycare fees and property taxes up in new year, but middle class gets tax cut
Quebecers will see the price of several services go up in 2016, ranging from daycare to transit passes.
But there will also be tax relief for some residents thanks to changes by the federal government.
- New tax rates and tax-free rule changes for Canadians to watch for in 2016
- TFSA limits lower in 2016, but past contribution room remains
Here's a rundown of what to expect, with the good news first.
Cuts for the middle class
The federal Liberal government's federal tax cut for the middle class goes into effect on Jan. 1. The income tax rate will drop to 20.5 per cent, down from 22 per cent, for taxable earnings between $45,282 and $90,563. The rate on all income earned beyond $200,000 will rise from 29 per cent to 33 per cent.
SAAQ insurance rates chopped
Vehicle insurance rates are going down substantially. For a driver who owns a passenger vehicle, this means $65 in savings — the annual licence fee will go from $64 to $55, and car registration will go from $120 to $64.
The rate of $7.30 a day per child remained in effect through the end of 2015, but when families prepare their annual income tax declarations this year, those who make more money will have to pay extra. Starting January 1st, families with a total income of less than $55,000 will pay only the base amount of $7.55 a day per child. Additional fees will climb as high as $20.70 per day per child for families whose total annual income is more than $150,000.
The STM, Montreal's public transit authority, announced earlier this year it will freeze fares for at least the first half of 2016. The AMT, Laval and Longueuil transit rates, however, will all see increases.
Montreal municipal tax rates
Montreal residential property owners will see an average increase of 1.9 per cent on their property taxes as part of the 2016 budget, but the specific rates vary widely by borough. For the average single family home – valued at $431,044 –that means an increase of $75 in property taxes next year. Go here for a breakdown of the rates by borough.
Stricter limit for TFSA
The annual contribution limit for tax-free savings accounts will be $5,500, instead of the $10,000 the previous federal government had implemented for 2015. Check out an analysis of the changes here.