DFK Tax Digest
2025 Issue One
February 13, 2025
In this DFK Tax Digest – 2025 Issue One:
- Summary of the new Canadian Entrepreneur Incentive rules coming into place for eligible capital gains starting January 1, 2025 – As proposed in Budget 2024 (further revised August 12, 2024), Section 110.63 of the Income Tax Act introduced the Canadian Entrepreneur Incentive (“CEI”), which would reduce the inclusion rate on eligible capital gains to 1/3. The lifetime limit of capital gains that can be utilized under the CEI is $2,000,000 for individuals who are resident in Canada; but is phased in over 5 years at $400,000/year starting in 2025 (fully phased in by 2029). In order for a capital gain to be eligible under the CEI, it must meet the definition of Qualifying Canadian Entrepreneur Incentive Property (“QCEIP”), which is summarized…
- Residential Property Flipping Rules – Property flipping is when an investor purchases a property with the intention of selling for a profit in a short period of time. The residential property flipping rules were first announced in the 2022 Budget. Along with other measures, this rule was introduced with the objective to make housing more affordable across Canada. The residential property flipping rules were also brought forward to address the concern that profits from the sale of flipped properties were being reported as capital gains, as opposed to business income, and, in some cases…
- Interest Rate Cuts and Construction Growth – The recent reduction in interest rates by the Bank of Canada presents an opportunity for construction companies in Canada to capitalize on more favorable financing conditions. Until recently, high borrowing costs and stringent loan conditions posed significant challenges. With the easing of interest rates, companies can now pursue growth opportunities more aggressively. Continue reading to learn how construction firms can adapt their strategies to take advantage of these changes…