The Canadian government is proposing significant changes in its 2025 federal budget, which aims to adjust the tax landscape for various groups of taxpayers. The budget, pending a confidence vote scheduled for the week of November 17, is designed to impact a wide range of Canadians, from low-income individuals to luxury asset owners. One of the key features of the budget is the elimination of the five percent Goods and Services Tax (GST) on new homes priced up to $1 million. This measure is intended to assist first-time homebuyers, who will be eligible for a rebate of up to $50,000. For homes priced between $1 million and $1.5 million, the GST will be gradually reduced. To qualify for the rebate, buyers must sign a purchase agreement with a builder between May 27, 2025, and January 1, 2031, with construction completed and ownership transferred by January 1, 2036. Homes priced above $1.5 million will not qualify for the rebate. Additionally, the government is introducing a “middle-class tax cut” that will lower the first marginal personal income tax rate from 15 percent to 14.5 percent in 2025, and further to 14 percent in 2026 and beyond. A new Top-Up Tax Credit will ensure that this reduction does not affect the calculation of non-refundable tax credits, maintaining the 15 percent rate for amounts above the first tax bracket. Starting in 2027, the Canada Revenue Agency (CRA) will implement automatic tax filing for approximately one million low-income Canadians. This initiative aims to help these individuals access government benefits, including the GST/HST credit and Canada Child Benefit. The CRA will generate tax returns using data from employers and financial institutions, allowing individuals to review and confirm their pre-filled returns. The program is expected to expand to 5.5 million people by 2029, targeting those earning below the federal or provincial basic personal amounts. The budget also introduces a temporary Personal Support Workers Tax Credit, offering up to five percent of eligible earnings for qualifying workers. From 2026 to 2030, personal support workers could receive a tax rebate of up to $1,100, with the program projected to cost the government $1.48 billion over six years. However, workers in British Columbia, Newfoundland and Labrador, and the Northwest Territories will not be eligible due to existing agreements to boost wages in those regions. For individuals who have applied for the Disability Tax Credit, the budget proposes a one-time payment of $150 for each certification or re-certification. This payment will be retroactive to the program's launch in June 2025, with the first supplemental payments expected before the end of the 2026-27 fiscal year. In a move to simplify the tax system, the budget plans to eliminate the Underused Housing Tax, which imposed a one percent annual levy on certain vacant or underused properties owned by non-residents. This change is part of broader efforts to complement existing measures, such as the federal foreign-buyer ban and local vacant-home taxes. Finally, the budget proposes to eliminate luxury taxes on boats and aircraft valued over $100,000 and vessels valued over $250,000, effective November 4, 2025. This decision aims to support the aviation and boating industries while streamlining the luxury tax framework. Overall, the 2025 federal budget reflects the government's focus on providing tax relief and support to various segments of the population while simplifying the tax system.