I'm excited to share some big news that's shaking up our industry. The federal budget for 2024 has just dropped, and does it have some interesting tidbits for us! Let's break it down in a way that's easy to digest.
First up, we've got some great news for affordable housing! The government is introducing a new measure that's got builders and developers buzzing. It's called the temporary accelerated capital cost allowance (CCA). In simple terms, it means businesses can claim deductions on their rental projects faster than before.Here's the scoop:
- The CCA rate is jumping from 4% to 10% for eligible new purpose-built rental projects
- This applies to projects starting after the budget date and before January 1, 2031
- Properties need to be move-in ready before January 1, 2036
What qualifies? New residential complexes with:
- At least 4 apartment units or 10 private rooms/suites
- 90% or more of units held for long-term rental
Even conversion projects from non-residential to residential can get in on this action!
The Not-So-Good News: Changes to Capital Gains Tax ?
Now, brace yourselves for this one. The budget is proposing some changes to capital gains tax that might make some investors a bit nervous:
- For corporations and trusts, the capital gains inclusion rate is increasing from 50% to 66 2/3%
- For individuals, it's a bit more complicated:
- The first $250,000 of capital gains in a year stays at the 50% rate
- Anything over $250,000 will be taxed at the new 66 2/3% rate
This change kicks in on June 25, 2024, so mark your calendars!
What Does This Mean for Us? ?
As new real estate agents, we need to stay on top of these changes. The good news could mean more rental properties hitting the market, which is great for our rental-seeking clients. However, the capital gains tax changes might make some investors think twice before selling their properties.
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