The Tax Blog for Smart Canadians

Capital Gains Inclusion rate

When you make a gain on a sale of a property, such as land, buildings, shares, bonds, fund and trust units, 50% of the gain is added as income to your tax return (commonly called the inclusion rate).

The federal government had announced a change to this inclusion rate if you have capital gains of over $250,000. As per this change, 2/3 of every dollar gained above $250,000 must be added to your taxable income instead of 50% for dispositions made after June 24, 2024.

However, the Federal government recently announced that they are deferring the capital gains inclusion rate increase to January 1, 2026.

Home Buyer’s Plan (HBP)

The Home Buyer’s Plan is a program offered by the Federal government that allows you to borrow  from your registered retirement savings plans (RRSPs) for a down payment on the purchase of your first home. You must start paying back your RRSP account the second year after the withdrawal over the next 15 years by making contributions to your RRSP over that span of 1/15 of the original withdrawal amount.

The withdrawal limit has been increased from $35,000 to $60,000 starting in 2024. For withdrawals made between January 1, 2022, and December 31, 2025, the federal government is allowing a deferral of the start of the 15-year repayment period by an additional three years. This means that the first payment would be required the fifth year after withdrawal.

Charitable donations

Donations made from January 1st to February 28, 2025, can be claimed in the 2024 or 2025 tax return.

Volunteer Firefighters and Search and Rescue Volunteers Tax Credits

The Volunteer Firefighters and Search and Rescue Volunteers tax credits are non-refundable tax credits given to both types of emergency services volunteers which exclude a certain amount of income they receive from being taxed. Both credits will be doubled from $3,000 to $6,000 for 2024.

Short-term rentals

Claiming expenses related to a short-term rental (such as AirBnB and Vrbo), will be disallowed against your rental income if either:

• Short-term rentals are not permitted in your province or municipality
• Short-term rentals ARE permitted in your province or municipality, but you do not have the proper licence, permit, or registration to offer the rentals

Because you can no longer deduct your expenses against your rental income if you’re in one of the situations above, your tax will increase since you will be declaring more income on your tax return.

We wrote extensively about this change in a previous blog post.

Disability supports deduction

If you have an impairment in physical or mental functions, the disability supports deduction lets you deduct certain expenses that allow you to work, go to school, or do research under a grant. The federal government will now permit more expenses to be eligible for this deduction, such as:

• the cost of an ergonomic work chair
• the cost of a bed positioning device
• the cost of purchasing a mobile computer cart
• the cost of purchasing an alternative input device
• the cost of purchasing a digital pen device
• the cost of purchasing a navigation device for low vision
• the cost of purchasing memory or organizational aids.
• Expenses for service animals

Quebec

Cryptoassets return

Starting in 2024, if you acquired, held or used cryptoassets (such as Bitcoin, Ethereum or other assets like NFTs and tokens) in 2024, you must complete a Cryptoasset Return (Form TP-21.4.39-V ) and file it with your income tax return. You must also tick “Yes” for the box on line 24 of the TP-1.

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