What's new for your 2024 taxes?

There were a lot of changes in 2024! We’re helping you to make sense of them.

What’s new for 2024?

• Therapy exemption – Qualifying psychotherapy and counselling therapy services are GST/HST exempt starting June 20, 2024. Visit TherapyTaxes.ca for more.

• RRSP Home Buyers’ Plan – The withdrawal limit was increased from $35,000 to $60,000 per person for withdrawals after April 16, 2024. Plus, repayments don’t need to start for 5 years – up from 2 years – for withdrawals made from 2022 to 2025.

  • Example: Sarah withdrew $25,000 from her RRSP in 2022. Instead of starting repayments in 2024, she now has until 2027 to start.

• Capital gains increases – For asset sales on or after June 25, 2024, 2/3 of the gain is now included in your income, up from 1/2. Individuals will still include the same 50% portion for gains up to $250,000, though. This provision hasn’t been made law yet, but it’s expected to pass with a June 25, 2024 effective date.

  • Example: Ashley invests through her professional corporation for her retirement savings. She sells $40,000 worth of investments, which she had purchased for $25,000 – that means she has a $15,000 capital gain. Under the old rules, her corporation would have been taxed on half of the gain, or $7,500, and the other $7,500 would have been tax-free. Under the new rules, 2/3 of the gain, or $10,000 is taxed, and the other $5,000 is tax-free.

  • Example: Emily bought a rental property a decade ago for $200,000 and sells it for $500,000 – that means she has a $300,000 capital gain. Under the old rules, she would have been taxed on half of the gain, or $150,000, and the other $150,000 would have been tax-free. Under the new rules, she’ll be taxed on $158,333 of the gain, and the other $141,667 is tax-free.

• CPP increases – Starting January 1, 2024, you’ll pay an additional amount towards CPP, known as CPP2. If your income was above $68,500 in 2024, you’ll pay more into CPP, but you’ll also get more once you start receiving CPP. The maximum additional amount works out to an additional $376 in 2024 and an additional $792 in 2025.

• Bare trusts exemptions – Similar to last year, most bare trusts are exempt from filing a trust tax return for 2024. Bare trusts can often arise in situations like having your parent co-sign your mortgage or being added to someone else’s investment account.

• Canadian Dental Care Plan – This program rolled out to eligible seniors, people with disabilities and children in 2024. Eligible adults will be able to apply starting in 2025 (date TBD). Find out more here.

• Canada Carbon Rebate for Small Businesses – Eligible corporations started receiving their (retroactive) 2019-23 benefits in December 2024. This tax-free benefit is meant to distribute the proceeds from the carbon tax program. There’s no need to apply; the CRA automatically calculated and distributed the benefit earlier this year.

Upcoming changes for 2025

• Canada Disability Benefit – Eligible recipients will receive up to $2,400 per year starting in July 2025. No application is necessary for those who already qualify for the Disability Tax Credit.