On April 16, 2024, the Minister of Finance tabled the 2024 Federal Budget.
While no changes were made to the federal personal or corporate tax rates, there are some key changes to be aware of:
- Effective June 25, 2024, the inclusion rate on any capital gains in a corporation or trust will increase from 1/2 to 2/3.
- Effective June 25, 2024, the inclusion rate on any capital gains for individuals will remain at 1/2 for any capital gains under $250,000. However, the inclusion rate on any capital gains over $250,000 will increase to 2/3.
- Effective June 25, 2024, the Lifetime Capital Gains Exemption (LCGE) on the sale of qualified small business or farm and fishing properties will increase to $1.25 Million, from $1,016,836. The $1.25M limit will remain until January 1, 2026, at which time the LCGE will continue to be indexed to inflation.
Finally the Budget introduces the “Canadian Entrepreneurs’ Incentive”, which will allow an individual to use a 1/3 capital gain inclusion rate on the sale of a qualifying share, to a maximum of $2 million in capital gains, to be phased in over the next 10 years. This incentive is applicable for the sale of shares after January 1, 2025.
For those looking to purchase their first home, effective today, you can withdraw up to $60,000 from your RRSP as part of the Home Buyers Plan, up from $35,000. Additionally, for withdrawals between now and the end of the year, you have up to 5 years post withdrawal to begin your repayment.
If you have any questions please reach out to your HGA Advisor! We’re here to help.
