Canada Revenue Agency: Did You Get the Extra $443 GST/HST Credit?

How to create a recurring revenue stream by investing in dividend stocks?

| More on:

The Canada Revenue Agency (CRA) issued an additional GST/HST credit payment in April to people already receiving this benefit. The one-time additional payment was calculated based on your 2018 tax return and aimed at helping residents during COVID-19.

What is the GST/HST credit?

According to the Canada Revenue Agency, the GST/HST credit is a non-taxable amount paid four times a year to individuals and families with low and modest incomes. This repayment helps to offset a part of the taxes they pay while purchasing goods and services.

You are eligible for the GST/HST credit if you’re a single person with a net annual income of below $47,527. In case you are a single parent or married with two children your net family income should not exceed $56,547.

The maximum one-time additional GST/HST payment will be $443 for single individuals. This figure will rise to $580 if you are married. Further, you would have received an additional $153 for each child under the age of 19. For the first eligible child of a single parent, the one-time credit is $290.

If you’re a married couple with one child, you would have received an extra $1,313 during the GST/HST payout in July.

Generate $450 per year without paying taxes to the CRA

The Canada Revenue Agency has disbursed billions of dollars in federal benefits to Canadians amid the pandemic. While the GST/HST extra credit is welcome, it will just provide temporary relief to residents. However, there is another way to generate $450 per year in tax-free income.

You can hold dividend stocks in your Tax-Free Savings Account (TFSA) and generate income that the CRA can’t tax. The TFSA contribution room for 2020 is $6,000; if you invest this amount in the Automotive Properties REIT (TSX:APR.UN), your annual dividend income will be $450, given the stock’s forward yield of a tasty 7.5%.

The REIT acquires automotive dealership properties in urban areas zoned for the use of automotive retail. It is a defensive asset class and automotive sales are an integral part of Canada’s total retail sales.

Automotive Properties sales rose 7.4% in Q3

Despite the ongoing pandemic, Automotive Properties has managed to grow sales at a stellar rate. In Q3, its rental revenue rose 7.4% to $18.6 million while sales were up 13.3% in the first nine months of 2020 at $56 million.

The REIT has a portfolio of 64 income-producing properties and one development property with a gross leasable area of 2.5 million square feet. It enters into long-term triple-net lease agreements with tenants, largely insulating the company from weak economic cycles.

The Canadian automotive dealership industry has grown at a steady pace. Retail sales have increased from $70 billion in 1999 to $165 billion in 2019, indicating an annual growth rate of 4.4%. However Canadian auto sales might fall by 30% in 2020, compared to last year due to COVID-19.

In order to tide over the current uncertainty, Automotive Properties is looking at preserving capital in the short-term instead of expanding its property portfolio.

Automotive Properties is just an example of a quality stock for your TFSA. You can identify similar dividend-paying companies to invest your money and benefit from consistent payouts.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool owns shares of and recommends AUTOMOTIVE PROPERTIES REIT. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

2 Utility Stocks That Are Smart Buys for Canadians in November

Are you looking for some of the smart buys to consider in November? These utility stocks offer growth and a…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is Power Corporation of Canada Stock a Buy for its 5% Dividend Yield?

Is Power Corporation of Canada (TSX:POW) stock's 5% dividend yield worth it? Discover why this resilient stock could be a…

Read more »

hand stacks coins
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These three dividend stocks are ideal for strengthening your portfolio and earning a stable passive income.

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer REIT Stocks to Buy Right Now for Less Than $200

REITs have long been touted as some of the best dividend stocks out there if you want recurring, strong income.…

Read more »