The 2024 Federal Budget was released on April 16. we have provided a commentary of the budget to help show how it will impact you and your business.

2024 FEDERAL BUDGET COMMENTARY

Overview

Capital gain inclusion rate

• The inclusion rate for corporations, individuals and trusts will increase from one half to two thirds of the actual capital gain; however, individuals will still retain the one-half inclusion rate on the first $250,000 of capital gains annually. The increase is proposed to be effective for capital gains realized on or after June 25, 2024.

Several business sale incentives

• A new Canadian entrepreneurs’ incentive would be introduced to reduce the capital gain inclusion rate on certain business sales. The lifetime maximum capital gains exemption is proposed to increase to $1.25 million. Details on the proposal to exempt up to $10 million in capital gains from the sale to an employee ownership trust were provided.

Canada carbon rebate for small businesses

• An automatic payment to Canadian-controlled private corporations was proposed. These payments would return a portion of the Federal carbon tax collected (AB, SK, MB, ON, NB, NS, PEI and NL only).

Accelerated CCA

• Purpose-built residential rental properties and certain productivity-enhancing assets, including computers, would be eligible for assets acquired and placed into use after April 16, 2024.

Canada disability benefit

• Payments to eligible Canadians (those 18 to 64 years of age eligible for the disability tax credit) would begin in July 2025, pending the successful completion of the regulatory process and consultations with persons with disabilities.

Various housing measures

• Such proposals included increasing the withdrawal limit from the home buyers’ plan from $35,000 to $60,000 and allowing first-time home buyers to obtain CMHC-insured mortgages with a 30-year amortization period.