FEDERAL BUDGET SUMMARY – 2019
CHANGE IN USE RULES FOR MULTI-UNIT RESIDENTIAL PROPERTIES
To improve the consistency of tax treatment of owners of multi-unit residential
properties in comparison to owners of single-unit residential properties, Budget
2019 proposes to allow a taxpayer to elect the deemed disposition that normally
arises on a change in use of part of a property not apply.
This measure will apply to changes in use of property that occur on or after March
ADDITIONAL TYPES OF ANNUITIES UNDER REGISTERED PLANS
To provide Canadians with greater flexibility in managing their retirement savings,
Budget 2019 proposes to permit two new types of annuities under the tax rules
for certain registered plans:
• Advanced life deferred annuities (ALDA)
• Variable payment life annuities (VPLA)
The rules currently require an annuity purchased with registered funds to
commence by the end of the year in which the annuitant attains 71 years of age.
An ALDA will be a life annuity, the commencement of which may be deferred until
the end of the year in which the annuitant attains 85 years of age.
An ALDA will be a qualifying annuity purchase under a registered retirement
savings plan (RRSP), registered retirement income fund (RRIF), deferred profit
sharing plan (DPSP), pooled registered pension plan (PRPP) and defined
contribution registered pension plan (RPP); an ALDA will also be a qualified
investment for a trust governed by an RRSP or RRIF.
An ALDA will be subject to limits, including a comprehensive lifetime ALDA dollar
limit of $150,000 from all qualifying plans and certain specified annuity
Budget 2019 also proposes amendments to permit PRPPs and defined
contribution RPPs to provide a VPLA directly from the plan. A VPLA will provide
payments that vary based on the investment performance of the underlying
annuities fund and on the mortality experience of the VPLA annuitants.
As with the ALDA, a VPLA will be subject to certain rules and specified annuity
These measures will apply to the 2020 and subsequent taxation years.