The Budget confirms that the so-called first-time donor’s super credit will expire at the end of 2017.
The super credit was introduced in the 2013 federal budget, and provides for an additional 25% tax credit for the first $1000 donated to a registered charity by a donor who has not claimed a charitable donation tax credit since 2007. The measure was always intended to be temporary, available only for gifts made after 2012 and prior to 2018. The Budget confirmed that due to low take-up, small average amounts donated, and “the overall generosity of existing tax assistance for charitable donations”, the super credit will be allowed to expire.
Charities might question whether the existing charitable donations tax credit system is overly generous so as to justify removing this donation incentive. Furthermore, if take-up was in fact low, the fiscal cost of the measure should not be excessive. That said, the expiry of this super credit is unlikely to have significant negative consequences on the sector.
Donors who have not claimed a charitable donation tax credit since 2007 should consider making a gift before the end of 2017 to take advantage of the super credit before it expires.