The 2025 federal budget has landed, and it's packed with changes that will directly impact Canadian wallets from coast to coast. While governments often talk in billions, this budget contains specific measures that could mean thousands of dollars difference in your household finances.
Capital Gains Tax: The Big Change
The most significant shift comes to capital gains taxation. Starting June 25, 2025, the inclusion rate on capital gains over $250,000 annually will increase from 50% to 67%. For corporations and trusts, this higher rate applies to all capital gains.
What this means for you: If you're planning to sell investment properties, stocks, or other assets with substantial gains, the tax bill could be noticeably higher. This change particularly affects investors, small business owners, and anyone with significant non-registered investments.
Housing Measures: More Supply Promised
The budget doubles down on addressing Canada's housing crisis with several key initiatives:
- Accelerated construction of rental apartments through new funding programs
- Extended the deadline for the GST rental rebate to 2036
- Additional support for first-time home buyers through various programs
While these measures aim to increase supply over time, immediate relief for homebuyers facing high prices and interest rates remains limited.
Retirement and Savings Adjustments
Several changes target retirement planning and savings:
- CDIC coverage expands to include foreign currency deposits
- Registered Education Savings Plans (RESPs) see increased flexibility for beneficiaries
- Ongoing adjustments to retirement benefit calculations affecting future payments
What Isn't Changing (Yet)
Despite speculation, the budget left several areas untouched:
- No changes to principal residence exemption
- No increases to GST/HST rates
- No reduction in RRSP contribution limits
- No new carbon tax increases beyond previously scheduled amounts
Strategic Financial Planning Now Essential
With these changes coming into effect, proactive financial planning becomes more important than ever. The capital gains adjustment alone means investors may want to review their portfolios and consider timing of asset sales.
Homeowners considering selling investment properties might accelerate their timelines, while prospective buyers should monitor how housing measures actually translate to increased supply in their local markets.
The 2025 budget represents a significant shift in Canada's tax landscape, particularly for wealthier Canadians and investors. Understanding these changes now can help you make informed decisions to protect and grow your wealth in the new fiscal environment.
