What's new for small businesses and self-employed
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Automobile deduction limits
On December 30, 2024, the Government of Canada announced the automobile deduction limits for 2025.
For Class 10.1 passenger vehicles (new and used) acquired on or after January 1, 2025, the prescribed amount increases from $37,000 to $38,000, before tax.
The maximum deductible automobile leasing costs increase from $1,050 to $1,100 per month, before tax, for new leases entered into on or after January 1, 2025.
Critical mineral exploration tax credit and mineral exploration tax credit
Under proposed changes, the critical mineral exploration tax credit has been expanded to include 13 new critical minerals, including bismuth, cesium, chromium, fluorspar, germanium, indium, manganese, molybdenum, niobium, phosphate, tantalum, tin, and tungsten. This expansion applies only to eligible flow-through share agreements entered into after November 4, 2025, and before April 1, 2027.
Under proposed changes, the mineral exploration tax credit has also been extended for qualifying flow-through share agreements entered into before April 1, 2027.
For more information, go to Mineral exploration tax credit and Critical mineral exploration tax credit.
Capital cost allowance
Accelerated investment incentive and reaccelerated investment incentive
Under proposed changes, the accelerated investment incentive is available for qualifying property acquired before January 1, 2025, and that becomes available for use before 2028, and the reaccelerated investment incentive (RII) is available for qualifying property acquired on or after January 1, 2025, and that becomes available for use before 2034. The RII has a four‑year phase out for property that becomes available for use after 2029.
For more information, go to Accelerated investment incentive property.
Enhanced first-year capital cost allowance
Under proposed changes, the enhanced first‑year capital cost allowance (CCA) can be up to 100% for new additions of property to the following CCA classes:
- Class 43.1 property that becomes available for use before 2034
- Class 44, 46, or 50 property acquired after April 15, 2024, and that becomes available for use before 2027
- Class 53 property acquired before 2026 and Class 43 property acquired after 2025
- Class 54, 55, or 56 property that becomes available for use before 2034
For most CCA classes, the enhanced first-year allowance will be phased out over a period of four years for properties that become available for use after 2029.
For more information, go to Classes of depreciable property.
Purpose-built residential rentals
Under proposed changes, there is an accelerated CCA rate of 10% for eligible new purpose-built residential rentals. These projects have to begin construction after April 15, 2024, and before 2031, and be available for use before 2036.
For more information, go to Class 1 (4%).
Changes to Class 43.1
Under proposed changes, there are new conditions that transmission equipment must meet to be included in the class and other restrictions on properties included in the class.
For more information, go to Class 43.1 (30%) and Class 43.2 (50%).