We have reached the end of a year of change, in which our leaders turned their attention from tamping down inflation to spurring a lagging economy. It also saw the federal government releasing a host of new policies, as it prepared for an election in 2025.

We outline some of the biggest changes in personal finance coming in the new year.

Capital-gains inclusion rate

The federal government’s move to raise the capital-gains inclusion rate was the headline policy in its 2024 budget. Canadians will feel its impact for the first time when filing their taxes in 2025.

As of June 25, the capital-gains inclusion rate of 50 per cent for individuals only applies to profits under $250,000. All profits above $250,000 will face a 66.7-per-cent inclusion rate.

Since most Canadians invest in tax-sheltered accounts such as tax-free savings accounts, the majority of people will be shielded from any tax changes. But anyone selling a secondary home or significant non-sheltered investments could pay thousands more in taxes in a given year.

Public dental care opens to all eligible people

The Canadian Dental Care Plan, which helps cover costs at the dentist’s office for Canadians without insurance, started rolling out in 2024 for seniors and people under 18.

In 2025, Ottawa will open the program to the remaining eligible Canadians. Eligibility requirements include a net family income under $90,000, being a Canadian resident for tax purposes, and having filed a tax return in the previous year.

Between 40 per cent and 100 per cent of eligible costs will be covered, depending on income.

Tax bracket adjustments

As inflation slows down, so does the increase in federal tax brackets. All five brackets will rise by 2.7 per cent for 2025, compared with an increase of 4.7 per cent for 2024.

GST holiday and rebate cheques

Two spending incentives unveiled by Ottawa in November will have a large part of their impact in 2025.

First, a federal sales-tax holiday on specific goods that started mid-December will last until Feb. 15. In some provinces, consumers will also be exempt from paying the provincial portion of sales tax. Exempted purchases include restaurant meals, books, beer and wine.

The government also said it would send $250 rebate cheques to Canadians in April. However, that program wasn’t included in the GST holiday legislation or the fall economic statement in December, as the Liberals did not anticipate enough support for the measure in Parliament. The cheques were to be sent to Canadians who worked in 2023 and made under $150,000 in net individual income.

B.C. introduces anti-home-flipping tax

A tax meant to prevent the short-term holding of homes for profit will go into effect on Jan. 1 in British Columbia.

Anyone selling a home that they have owned for less than 730 days will be subject to a 20-per-cent tax on any profit.

The tax is distinct from the federal government’s rules to discourage property flipping, which treat profits as fully taxable on an individual’s income-tax return.

New rules for down payments and mortgages

New mortgage rules will allow Canadians to make smaller down payments on properties valued at more than $1-million. Previously, buyers had to have a down payment of at least 5 per cent for homes valued under $500,000, 10 per cent for every dollar between $500,000 and $1-million, and 20 per cent of every dollar over $1-million.

As of mid-December, buyers now have to have a 5-per-cent down payment up to $500,000, and 10 per cent between $500,000 and $1.5-million. The 20-per-cent minimum now starts at $1.5-million.

Insured mortgages will also be allowed on homes of up to $1.5-million, up from a $1-million cap previously. Insured mortgages come with lower interest rates when purchasing a home with a down payment below 20 per cent, but they require the purchase of an insurance premium that is rolled into the mortgage.

First-time buyers and buyers of new builds will also have access to 30-year mortgages, up from the previous cap of 25 years.

Easing loan access for building secondary suites

The federal government is adding two new ways to make it easier to finance a secondary suite, such as a basement rental unit, for an existing home.

The first is the Canada Secondary Suite Loan Program, which will give homeowners access to a low-cost loan of up to $80,000 to build a suite. It is expected to launch in early January, with 15-year terms and an interest rate of 2 per cent.

Homeowners will now also be able to refinance their insured mortgages if they use the equity to build secondary suites, up to a limit of $2-million. This will allow them to retain the lower rates that come with an insured mortgage when refinancing.

Government sets lower limit on interest rates for lenders

New loans starting from Jan. 1 will be subject to new rules that set the criminal interest rate at 35 per cent, down from the previous threshold of roughly 48 per cent. The government said the change is meant to crack down on high-interest lending from alternative lenders.

Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.

It’s the final trading day of 2024, so join Seana Smith and Madison Mills for a look back at several of this year’s trends while speaking with Wall Street experts and looking ahead to what 2025 may bring.

BofA Securities head of US rates strategy Mark Caban, and Allspring Global Investments head of plus fixed income Janet Rilling discuss their bond market (^TYX, ^TNX, ^FVX) forecasts while the Federal Reserve is only expected to cut interest rates by as much as two times next year..

Raymond James Managing Director Savi Syth comes on the program to talk about the firm’s latest upgrade it gave to American Airlines (AAL) while expecting strong travel demand to carry into 2025.

To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.

Other top trending stocks on the Yahoo Finance platform include Palantir Technologies (PLTR), Tesla (TSLA), Super Micro Computer (SMCI), Fannie Mae (FNMA), Freddie Mac (FMCC), and Sangamo Therapeutics (SGMO).

This post was written by Luke Carberry Mogan.

Have you set your financial goals for 2025 yet? The end of the year is the perfect time to reflect on what has happened to date, it’s a time to review your progress against past goals and set financial intentions for the upcoming year. Setting financial goals is the foundation for success and growth.

Why Financial Goals Matter

The value of setting financial goals can often be underestimated, but financial goals are important. Here are a few reasons why financial goals matter:

• Clarity and direction: Financial goals offer you a clear roadmap for where you want to go financially. Finances are an important pillar to your overall health and having a healthy financial plan will reduce financial stress and keep you happy. Financial goals provide focus and help prioritize spending, saving, and investing your money.
• Motivation and accountability: Financial goals create a sense of purpose for your money and keep you motivated to stick to your plans. It gives your money a job. You can easily track your progress against your goals and that can keep you accountable as you check in on your progress and ensure you meet your targets.
• Financial security and freedom: Financial goals ensure you are saving for emergencies, retirement, and investing your money. Without a plan your money won’t do anything, but when you plan for where your money needs to go, it allows you to build wealth intentionally rather than hoping that it will all work out.

What Happens If You Don’t Set Financial Goals?

Not having financial goals may feel harmless but there are consequences to not giving your money direction and purpose. Here are some ways your finances suffer from not setting financial goals:

1. Lack of focus leads to wasted money

Without goals, money often gets spent impulsively rather than strategically planning and saving for purchases.

2. Missed opportunities for growth

No financial goals mean no plan for investing in your future. You may fail to take advantage of wealth building opportunities.

3. Financial stress and insecurity

Living paycheck to paycheck and constantly worrying about money is stressful, and unexpected expenses can derail your finances.

4. Slower progress to retirement or big dreams

Without a goal you risk delaying retirement or never achieving major financial milestones that can bring joy to your life.

How to Set Financial Goals for 2025

Now that you see how setting financial goals can help you, here are some tips on how to set your financial goals for 2025:

1. Reflect

Asses where your finances are now, and what has worked and not worked for you in the past. Identify areas for improvement and opportunities for growth.

2. Set SMART goals

SMART goals are more specific and measurable. For example, rather than stating you’ll build an emergency fund you can set a goal of saving $10,000 for an emergency fund by December 2025.

3. Break goals into milestones

Divide larger goals such as retirement into smaller, manageable steps and be sure to track your progress monthly or quarterly. And don’t forget to celebrate your small wins to keep you motivated on your progress.

4. Prioritize wealth building strategies

Debt eats away at wealth so prioritize being debt free and building passive income streams to help you build wealth.

The bottom line is that you win when you set financial goals and stay accountable to them through the year. Goals give you the clarity, focus, and motivation needed to turn your financial dreams into reality. Without a plan, it’s easy to drift and let opportunities slip away. But with clear goals and consistent tracking, you create the foundation for long-term financial security, growth, and freedom. As 2025 approaches, take the time to define your goals, map out your strategy, and commit to the process. Your future self will thank you.