Budget 2025 includes productivity super-deduction tax incentives and repeal of underused housing tax 

On November 4, 2025, Canada’s Minister of Finance and National Revenue, François-Philippe Champagne, tabled the Liberal Government’s federal budget, Building Canada Strong, in the House of Commons (Budget 2025). Relevant to Canada’s real estate sector, among other things, Budget 2025 proposes, as part of a suite of enhanced tax incentives referred to as a “productivity super-deduction”, a measure for the immediate expensing of the cost of certain manufacturing and processing buildings, including eligible additions and alterations.

In addition, Budget 2025 proposes to repeal the Underused Housing Tax Act (UHTA). The proposal would eliminate the tax and the requirement to file returns for 2025 and later calendar years. All UHTA requirements would continue to apply in respect of the 2022 to 2024 calendar years. The UHTA and associated regulations would be ultimately repealed on January 1, 2035.

For a discussion of these tax measures and others in Budget 2025, please see McCarthy Tétrault’s 2025 Canadian Federal Budget Commentary – Tax Initiatives.