Notes on the Federal Budget

Mortgage Plan • April 19, 2024

Sherry Cooper has done a great analysis of the upcoming Federal Budget.  You can see it here: Sherry Cooper Federal Budget 2024


One of the key themes of the budget is to tax the wealthy namely through increase taxes on capital gains.


Currently, 50% of capital gains are taxed.  Under new proposal, 50% capital gains tax will still apply for the first $250,000 but will rise to 66.6% on income above $250,000.


Implications to real estate investors:

- the tax is targeted to the wealthiest Canadians BUT there will be impact to the middle class real estate investors and can lead to higher taxes for middle class Canadians.

- disincentive for Canadians to buy investment properties

- disincentive for Canadians to buy under a corporation as corporations and trusts are taxed for entire capital gains at 66% rather than just the gains over $250,000 for individuals.


With these changes, it is important to work with a team of professionals (mortgage broker, realtor, financial advisor and accountant) that can properly advise and help you navigate the intricacies of buying and selling investment properties.  Be sure to consult with a great team of knowledgeable professionals when looking to buy and sell real estate.


The other changes:

- increase amortization to 30 years for new builds

Likely minimal effect on affordability as it likely will increase demand


- increase in RRSP withdrawal limit to $60,000 from $35,000

In my career, I rarely see a first time buyer with over $25,000 in RRSPs so likely a very minimal impact on actual first time buyers


Reach out to me if you have any comments or questions.

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