Highlights of the federal budget for individuals
For more details on the highlights of the federal budget, including concrete examples, see the full summary at the bottom of our article.
Home Buyers’ Plan (HBP)
The Home Buyers' Plan ceiling has been raised from $35,000 to $60,000. This measure will be available for first-time home buyers for withdrawals made after April 16, 2024
Registered Education Savings Plan (RESP)
Budget 2024 announces the government’s intention to amend the Canada Education Savings Act to introduce automatic enrolment in the Canada Learning Bond for eligible children who do not have a RESP opened for them by the time the child turns four.
Capping Non-Sufficient Funds Fees
To help Canadians who are struggling to make payments to improve their financial situation, the government is announcing its intent to cap the NSF fees charged by banks to $10 per instance.
The government will release draft NSF fees regulations in the coming months.
Capital Gains Inclusion Rate
The federal 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. The inclusion rate for capital gains realized annually up to $250,000 by individuals will continue to be one-half. These changes will apply to capital gains realized on or after June 25, 2024.
Enhanced Lifetime Capital Gains Exemption
Budget 2024 proposes to increase the LCGE to apply to up to $1.25 million of eligible capital gains. This measure would apply to dispositions that occur on or after June 25, 2024, and indexed to inflation after 2025.
Canadian Entrepreneurs’ Incentive
Budget 2024 proposes to introduce the Canadian Entrepreneurs’ Incentive. This incentive would reduce the tax rate on capital gains on the disposition of qualifying shares by an eligible individual.
Specifically, this incentive would provide for a capital gains inclusion rate that is one half the prevailing inclusion rate, i.e. 33,3% (Budget 2024 proposes to increase the capital gains inclusion rate to two-thirds), on up to $2 million in capital gains per individual over their lifetime. This measure would apply in addition to any available capital gains exemption.
Alternative Minimum Tax (AMT)
Budget 2023 announced amendments to the Income Tax Act that would change the AMT calculation. Budget 2024 proposes to make further changes to the AMT proposals, including :
- The tax treatment of charitable donations will be revised to allow individuals to claim 80 per cent (instead of the previously proposed 50 per cent) of the Charitable Donation Tax Credit when calculating AMT;
- Fully allow deductions for the Guaranteed Income Supplement, social assistance, and workers’ compensation payments.
Enhancement Free and Affordable Bank Accounts
To ensure affordable banking options meet the needs of Canadians, the government directed the Financial Consumer Agency of Canada (FCAC) to secure new agreements from financial institutions for enhanced free and affordable banking accounts.
Highlights of the federal budget for businesses
Capital Gains Inclusion Rate
Budget 2024 proposes to increase the capital gains inclusion rate from one half (50%) to two thirds (66,67%) for corporations and trusts and such, for capital gains realized on or after June 25, 2024.
Accelerated Capital Cost Allowance – Purpose-Built Rental Housing
Currently, purpose-built rental buildings are eligible for a CCA rate of four per cent under Class 1. Budget 2024 proposes to provide an accelerated CCA of ten per cent for new eligible purpose-built rental projects that begin construction on or after Budget Day and before January 1, 2031, and are available for use before January 1, 2036.
Want to learn more? Check out the different analyses from our specialists on what this means for both individuals and businesses.
