As we begin 2025, it is a good time to review the key dates and contribution limits for registered accounts. Understanding these important deadlines will help ensure that your financial plans remain on track throughout the year. Below, we have outlined the key registered account deadlines and contribution limits for 2025 to keep you informed and prepared.

Capital Gains Tax Update

In 2024, the Canadian government proposed increasing the capital gains inclusion rate from 50% to 66.67% for corporations and trusts, as well as for individuals on capital gains exceeding $25,00 annually, earned after June 25, 2024.

As of January 2025, Parliament has not passed the legislation to formalize this increase. However, the Canada Revenue Agency (CRA) has announced that it will begin collecting the higher capital gains tax based on the proposed two-tier structure. This is because the increase was introduced as part of a Notice of Ways and Means Motion, which allows proposed measures to take effect retroactively from the date the motion is tabled, even if the bill has not yet been passed.

Following Justin Trudeau’s resignation as leader of the Liberal Party, Parliament has been suspended, making it unlikely that the proposed legislation will be enacted in the near future. Whether the bill progresses will likely depend on the political party elected in the next federal election. If the incoming government decides not to proceed with the legislation, the CRA will be required to refund the higher tax amounts collected.

For now, the CRA will continue to collect the increased capital gains tax until there is a definitive decision regarding the bill's future.

Update as of January 31st, 2025

Deferral of Inclusion Rate Increase:

• The increase in the capital gains inclusion rate from 50% to 67% will now take effect on January 1, 2026, instead of June 25, 2024.

• This applies to capital gains above $250,000 for individuals and all capital gains for corporations and most trusts.

Key Exemptions and Incentives:

• Principal Residence Exemption: Capital gains on the sale of a primary residence remain tax-free. 

• Increased Lifetime Capital Gains Exemption: The exemption for small business shares, farming, and fishing property will increase to $1.25 million, effective June 25, 2024.

• Canadian Entrepreneurs’ Incentive: A reduced one-third inclusion rate on a lifetime maximum of $2 million in eligible capital gains, starting in the 2025 tax year, with the limit increasing annually until 2029.

RRSP

March 3, 2025 is the deadline for contributing to an RRSP for the 2024 tax year.

 The RRSP contribution limit for the 2024 taxation year is 18% of the earned income reported on your previous year’s tax return, up to a maximum of $31,560.

TFSA

The annual TFSA dollar limit for 2024 is $7,000.

If you are contributing in 2024 for the first time, you are eligible to deposit $102,000 in total contributions, provided you have been over 18 years of age since 2009 and have a valid social insurance number.

RESP

2024 RESP Contribution: There is no annual RESP contribution limit. However, to maximize your potential annual CESG grant of $500, it is recommended that you contribute up to $2,500 to your RESP per beneficiary per year. Keep in mind that the lifetime contribution limit for any one beneficiary is $50,000.

Tax Filing Deadline For Individuals

The deadline to file your 2024 personal income tax return is April 30, 2025, unless you are self employed. The deadline to file your 2024 taxes is June 16, 2025 if you are self‑employed. You can start filing your 2024 return online on February 24, 2025.

RRSP Home Buyers’ Plan

The current withdrawal limit for the RRSP Home Buyers’ Plan is $60,000. The higher withdrawal limit applies to withdrawals made after April 16, 2024. To qualify as an eligible withdrawal, the qualifying home must be purchased or constructed by October 1 of the year following the first withdrawal.

First Home Savings Account (FHSA)

If eligible, you can contribute up to $8,000 each year to the account, but these funds must be used within 15 years of first opening an FHSA or before you turn 71, whichever comes first. A qualifying withdrawal from an FHSA and a Home Buyer’s Plan withdrawal from an RRSP can be made for the same qualifying home purchase, provided the plan holder meets all conditions at the time of each withdrawal.

If you would like to discuss these events or review your portfolio, please feel free to contact us.