2024 Federal Budget Significant Change: How the New Rate Affects What Investors Will Pay on Capital Gains

On  April 16th, 2024, the Canadian government unveiled its 2024 Federal Budget, introducing several significant changes that will impact investors and homebuyers.


Major Changes

 

1.Increase in Capital Gains Inclusion Rate

 

The 50% original capital gains inclusion rate is being raised to two-thirds (that is, 66 2/3%), although for individuals it is only on gains above $250,000. More specifically:


    1. Individuals – the inclusion rate increases to 66 2/3% on capital gains over $250,000 in a year
    1. Corporations and trusts – the inclusion rate increases to 66 2/3%, for all capital gains realized

    The new higher rate applies to gains realized on or after June 25th, 2024. Please note: The change in the inclusion rate should not impact our class structure, as it distributes capital gains, not taxable capital gains. The inclusion rate applies at the investor level.


    See how this new rate affects what investors will pay on capital gains in the below table. (these assume the highest marginal tax rate of 53.53% in ONT):




    2. Increase in the Home Buyers’ Plan Withdrawal Limit

     

    The $35,000 original withdrawal limit for the Home Buyers Plan is being raised to $60,000.





    AimStar Capital Group Inc. is an independent full-service investment dealer with the Investment Industry Regulatory Organization of Canada (IIROC), specializing in providing Investment advisory and tailored wealth management services to individual investors, family trusts, and institutional investors. If you have any inquiries regarding personal financial services, investment portfolio adjustments, or private wealth management, please email us at info@aimstar.ca. We are committed to assisting you and ensuring the security of your privacy. Additionally, the AimStar expert team is available to provide one-on-one financial advisory services. We look forward to navigating your financial future together.

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