November 6, 2025

On November 4, 2025, the federal government released its latest budget, outlining several tax and policy changes that will affect individuals and businesses in the coming years. Below is a brief overview of a few key tax measures.

Bare Trust Reporting Rules
The budget defers the implementation of the new trust reporting rules for bare trusts to apply to taxation years ending on or after December 31, 2026. These rules were originally proposed on August 15, 2025, and requires trustees of bare trusts to file annual T3 returns, even where no income is earned.

Underused Housing Tax (UHT)
The budget proposes to eliminate the UHT beginning with the 2025 calendar year. As a result, no UHT will be payable and no UHT returns will be required for 2025 and subsequent calendar years. All UHT requirements, including filing obligations, penalties, and interest, will continue to apply for the 2022 through 2024 calendar years.

Immediate Expensing for Manufacturing and Processing Buildings
The budget introduces a temporary measure allowing businesses to immediately expense the full cost of eligible manufacturing and processing buildings. To qualify, at least 90 percent of the building’s floor space must be used for manufacturing or processing. This measure applies to property acquired on or after November 4, 2025, and first used before 2030. The deduction will gradually phase out after 2030 and be eliminated after 2033.

Luxury Tax on Aircraft and Vessels
The budget ends the luxury tax on subject aircraft and subject vessels. This tax will cease to be payable after November 4, 2025, including the tax on sales, importations, and improvements. Registered vendors must file a final return covering the reporting period that includes Budget Day, and all related registrations will be automatically cancelled on February 1, 2028.

Home Accessibility Tax Credit
The budget introduces a clarification to ensure that an expense claimed under the Medical Expense Tax Credit cannot also be claimed under the Home Accessibility Tax Credit. This measure applies to the 2026 and subsequent taxation years. Individuals planning to make accessibility renovations may wish to complete those projects before the end of 2025 in order to benefit from claiming both credits under the current rules.

If you have any questions in respect to the changes to electronic payment requirements, please click here or contact our Tax Manager Brad Grsic at (250) 370-9178.