Canada: Tax measures in 2025 budget (Prince Edward Island)
Proposed changes to corporate, individual, and indirect taxes
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April 15, 2025
Prince Edward Island's Finance Minister on April 10, 2025, delivered the province’s 2025 budget. Tax proposals included in the budget concern:
- Corporate tax: The budget would decrease the general corporate tax rate from 16% to 15% and increase the small business income threshold from $500,000* to $600,000, effective July 1, 2025. The combined federal and provincial corporate tax rate for small businesses would be 16% for income between $500,000 and $600,000.
- Individual (personal) tax: The budget does not change personal income tax rates for 2025. However, it would increase the thresholds for personal income tax brackets by 1.8% for 2026. The basic personal income tax exemption amount would increase to $14,650 for 2025 and $15,000 for 2026. The spouse or equivalent amount would increase to $12,443 for 2025 and $12,740 for 2026. The income threshold for the low-income tax reduction program would increase to $22,650 for 2025 and $23,000 for 2026.
- Indirect tax: The budget proposes an increase on the tax per cigarette to 30 cents, effective April 28, 2025. The real property transfer tax rates for properties valued at $1 million and over would increase to 2%, effective April 28, 2025. For first-time homebuyers who are residents of Prince Edward Island, the rate would also increase to 2%.
Read an April 2025 report prepared by the KPMG member firm in Canada
* = Canadian dollar