Article - Loi 25 - Contenu
In its 2024 budget, the federal government introduced significant changes related to capital gains that could have a major impact on corporate and individual finances. We have prepared for you a summary of these new measures, which came into effect on June 25, 2024.
Taxation before the 2024 budget: a reminder of previous rules
- Taxation was calculated on 50% of the gain on the sale of an asset. This meant that you only paid tax on half the net gain;
- Gains on the sale of your principal residence were taxexempt;
- The lifetime capital gains exemption limit on qualified small business shares and agricultural goods was approximately $1,000,000.00.
Taxation since the adoption of the 2024 budget on June 25, 2024
- Taxation is calculated on 66.67% of the gain on the sale of an asset. This means you now have a 33.33% exemption;
- However, individuals are entitled to an exemption for the first $250,000 of gain;
- The principal residence exemption is maintained: gains on the sale of your principal residence are exempt;
- An incentive will be introduced for Canadian entrepreneurs, under certain conditions, resulting in taxation at half of the inclusion rate for a cumulative lifetime gain of $2,000,000.00. The ceiling will be increased gradually, reaching $2,000,000 in 2034;
- The lifetime capital gains exemption limit on qualified small business corporation shares and agricultural goods is increased to $1,250,000.00 in 2024 and will be phased in starting in 2026.
The Quebec government has followed in the footsteps of the federal government. This was confirmed by the Minister of Finance, Éric Girard, on April 18, 2024.
For further details, please do not hesitate to contact us. Our accounting team will be happy to assist you at any time!