The federal budget for 2024 has prioritized housing, introducing $52.9 billion in new spending to tackle affordability challenges for young Canadians, particularly concerning homeownership. The budget projects a deficit of $39.8 billion this fiscal year, with a gradual decline to $20 billion by 2028-29. One significant change is the increase in the capital gains inclusion rate for secondary home sales, from 50% to 66.7% starting June 25, 2024. This affects gains above $250,000 for individuals and all gains for corporations and trusts. Sales of principal residences will remain exempt from capital gains tax.
To illustrate, if you sell a vacation home for a $300,000 profit, previously you would have paid taxes on $150,000 of your gain, but under the new rules, you’ll pay taxes on $200,100. Around 11% of Canadians own at least two homes, according to 2023 research from Royal LePage.
Other housing initiatives include longer amortization periods for first-time buyers, increased withdrawal limits from RRSPs for home purchases, and measures to protect renters. The budget also plans to build nearly 4 million new homes by 2031 and support programs that aim to train and recruit skilled trades workers for housing construction.
In addition, the government plans to enhance data collection and crack down on mortgage and real estate fraud by consulting with the mortgage industry to develop income verification tools through the Canada Revenue Agency.
Published by Steve Huebl