Hot topic of the week, the announcement of the new federal budget is sparking discussions! We won’t be an exception and will address in this newsletter the aspects of the budget that would closely impact real estate.

Firstly, if the budget is adopted, the effective date of the new tax measures would be June 25, 2024.

Among these announcements, let’s highlight what would have a favorable or less favorable impact on your real estate investment projects:

• Capital gains tax would still exclude the primary residence and gains realized in accounts invested in a tax shelter.
• The first tranche of capital gains of $250,000 would remain at the current rate of 50%.
• The tax rate would increase from 50% to 66.67% on any capital gain exceeding $250,000 in the tax year.
• The Home Buyers’ Plan (HBP) ceiling would be raised from $35,000 to $60,000.
• An extended 30-year amortization period would be possible for buyers of new homes.

The actual fiscal impact deserves careful calculation if you are about to sell your secondary residence. There could be significant advantages to selling before these new measures take effect if you estimate a substantial gain. The government seems to indicate that capital gains exceeding $250,000 would generally be uncommon. As evidence, the government highlights that these new measures would target fewer than 40,000 taxpayers nationwide. However, we are aware that many owners of luxury homes in the Eastern Townships could be affected by more substantial gains. It is important to remember that there are measures to know for the designation of the primary residence. On this subject, your accountant and/or tax specialist will be a valuable ally.

If you would like to know the market value of your secondary residence or income property to estimate the impacts of the announced tax measures, feel free to contact our real estate brokers, they will put their experience and professionalism to good use in order to enlighten you.

An article from Century 21 Estrie

*Source: Federal Government website https://budget.canada.ca/2024/home-accueil-fr.html