New Capital Gains Tax Rules in Budget 2024
Major Changes Proposed for 0.13% of Canadians
Inclusion Rate to Increase, Annual Exemptions Adjusted
In its 2024 budget, the federal government has introduced significant changes to capital gains tax rules that will impact approximately 0.13% of Canadians. The proposed changes include:
- Increasing the capital gains inclusion rate from 12% to 23%, effective June 25, 2024.
- Maintaining the 12% inclusion rate for individuals with annual gains up to $250,000.
- Imposing a 50% tax on tax-avoidance planning activities, resulting in a minimum tax of $100,000 plus any additional entitlements.
These changes aim to make Canada's tax system more fair and equitable, according to Finance Minister Chrystia Freeland. The government believes that the wealthy should pay a larger share of taxes to support essential public services.
The new rules are expected to generate an additional $2.6 billion in tax revenue over the next five years. This money will be used to fund investments in healthcare, education, and other key priorities.
Tax experts have mixed reactions to the proposed changes. Some support the move towards a more progressive tax system, while others express concerns about the impact on investment and economic growth.
The government is currently consulting with stakeholders on the proposed changes. Final details will be released in the coming months.
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