Recents changes – Investments

• Since June 25, 2024, the 50-per-cent inclusion rate was increased to two thirds on the portion of capital gains realized by an individual in a year that exceeded $250,000. This threshold may not be carried over and is fully available in 2024 (i.e., it would not be prorated) despite this rule taking effect during the year.
• Since June 25, 2024, the capital gains exemption limit increased to $1,250,000 for all eligible property (i.e., shares of a qualified small business corporation in addition to eligible farming or fishing property).
• As of 2025, the Canadian Entrepreneurs’ Incentive will be gradually phased in and the limit will increase by $400,000 each year until it reaches $2 million in 2029. This incentive applies to the disposition of certain qualified shares and would reduce by one half the regular inclusion rate on a capital gain (1/3 instead of 2/3) and also apply in addition to the capital gains deduction. Once the incentive is fully implemented, entrepreneurs will benefit from at least $3.25 million in total and partial lifetime capital gains exemptions on their eligible capital gains.
• Since 2024, expenses incurred to earn income from short-term rentals, including interest rates, are not deductible in jurisdictions where such rentals are banned and where operators do not comply with permit requirements.
• Since 2024, the AMT calculation will be modified to better target high-income taxpayers. The rate will be raised and the taxable income base used to calculate the AMT will be broadened. The exemption rate will be increased from $40,000 to an amount equivalent to the lower threshold of the fourth federal tax bracket ($173,206 for 2024) and $175,000 in Quebec.

FEDERAL

• The eligibility period for the Mineral Exploration Tax Credit has been extended for flow-through share agreements concluded prior to April 1, 2025.

QUEBEC

• The minimum holding period for FSFTQ and Fondaction shares will be gradually increased from two to five years for share redemption that will take place between June 2027 and June 2031. Furthermore, the rule aimed at limiting the eligibility of the credit for the purchase of such shares by individuals whose income was taxable at the highest rate in the personal income tax table, which was to come into effect in 2024, will be postponed to 2027.