New Details from Budget 2024
Capital gains taxes are going up for individual Canadians who dispose of high value assets in a single year. (IE. Real estate investors), and for Corporations and Trusts, generally.
Below are the key takeaways from today’s budget release:
Capital Gains Inclusion Rate Going up: This is the big one, we’ll include the exact quote because there is a significant “all” in here:
Budget 2024 announces the government’s intention to increase the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and trusts from one-half to two-thirds, by amending the Income Tax Act, effective June 25, 2024.
Increased LCGE: The lifetime capital gains tax-free limit will be increased to $1.25 million, effective June 25, 2024, and will continue to be indexed to inflation thereafter.
Principal Residence Exemption: The government will maintain the exemption for capital gains from the sale of a principal residence to ensure Canadians do not pay capital gains taxes when selling their home.
A new Canadian Entrepreneurs’ Incentive which will reduce the inclusion rate to 33.3 per cent on a lifetime maximum of $2 million in eligible capital gains. Combined with the enhanced lifetime capital gains exemption, when this incentive is fully rolled out, entrepreneurs will have a combined exemption of at least $3.25 million when selling all or part of a business.
