03/14/2026
For the 2025 tax year (filing in 2026), Canada is reducing the lowest federal income tax rate to 14.5% (blended rate) and cancelling the proposed capital gains inclusion rate hike, keeping it at 50%. Key changes include higher RRSP limits ($32,490), increased CPP2 contributions, the introduction of the Canada Disability Benefit, and the elimination of the Underused Housing Tax (UHT).
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Key 2025 Tax Changes & Updates
Income Tax Rates: The lowest federal rate drops from 15% to 14% effective July 1, 2025, resulting in a 14.5% blended rate for the 2025 tax year.
Capital Gains: The proposal to increase the capital gains inclusion rate to 66.67% has been cancelled; it remains at 50% for individuals.
RRSP Limit: The maximum RRSP contribution limit for 2025 is $32,490 (or 18% of earned income from 2024).
CPP2 Contributions: CPP2 (second phase) contributions continue to increase.
Underused Housing Tax (UHT): The 1% UHT is eliminated for 2025 and future years.
Canada Disability Benefit: A new federal benefit, with applications opening in June 2025.
Alberta Changes: A new 8% provincial tax bracket applies to the first
$60,000 of income for 2025.
Trust Reporting: New reporting requirements (Bill C-15) are being introduced for 2025, with the CRA enforcing proposed changes.
Canada.ca
Canada.ca
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Deadlines and Penalties
Filing Deadline: The 2025 tax return is generally due on or before April 30, 2026.
Penalty Risk: The CRA may impose penalties for late filing, failing to report income, or severe errors on the 2025 return. Canada.ca
+1
Key 2025 Tax Changes & Updates
Income Tax Rates: The lowest federal rate drops from
15 to 14% effective July 1, 2025, resulting in a 14.5% blended rate for the 2025 tax year.
Capital Gains: The proposal to increase the capital gains inclusion rate to
66.67%
has been cancelled; it remains at 50% for individuals.
RRSP Limit: The maximum RRSP contribution limit for 2025 is
$32,490 (or 18%
of earned income from 2024).
CPP2 Contributions: CPP2 (second phase) contributions continue to increase.
Underused Housing Tax (UHT): The
1%
UHT is eliminated for 2025 and future years.
Canada Disability Benefit: A new federal benefit, with applications opening in June 2025.
Alberta Changes: A new
8%
provincial tax bracket applies to the first
$60000
of income for 2025.
Trust Reporting: New reporting requirements (Bill C-15) are being introduced for 2025, with the CRA enforcing proposed changes.
Canada.ca
Canada.ca
+6
Deadlines and Penalties
Filing Deadline: The 2025 tax return is generally due on or before April 30, 2026.
Penalty Risk: The CRA may impose penalties for late filing, failing to report income, or severe errors on the 2025 return.
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