budget calculator for a trip

Free Travel Budget Calculator: Easily Make Your Vacation Budget

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Ready to take the hassle out of planning and managing your vacation budget? Our online Free Travel Budget Calculator is  simple, and easy to use, and can help you plan and track your vacation expenses in just a few clicks.  

I’ve used these same methods and categories of expenses for every trip I’ve taken over the last 25 years. From multiple  3 month solo adventures through Europe and South America, to weeks long trips to Cuba and Vancouver Island, Canada with my family. 

Now online with automatic calculations, so you don’t have to mess around with spreadsheets or hand write in printables that clutter up your home. 

In this post you’ll get access to this free tool, plus, you’ll get my top tips for planning your budget effectively for your trips and how to save money on travel. All the advice you need for smarter travel planning is right here.

Table of Contents

How to Use the Travel Budget Calculator & Try It Out!

Make sure to bookmark this page so you can come back to it anytime you need to track your vacation expenses and make travel plans.

This free vacation budget calculator will give you an estimate of total travel costs for your trip and whether your budget is enough to cover what you want to do.

It can help you identify areas you can potentially save money on trip expenses. Whether it’s choosing more budget-friendly hotels, walking or taking the bus instead of taxis, or prioritizing your top not-to-miss activities.

You can also start with your budget.

Then play around with the length of your trip, how much hotels, flights etc will cost to help you determine your price range for each travel expense as well.

• Enter 0 (zero) if there are certain categories you don’t need . The calculator will output an error ($NaN) if you don’t.
• Instructions for the calculator are below the Travel Budget Calculator, to give you an idea of what you should include under each budget item.

Vacation Budget Calculator

Calculator instructions.

Enter all your estimated expenses you’ve gathered during your vacation research.

Make sure it’s actually a realistic travel budget. For a  family trip with young kids, you’ll also need to factor other things like diapers, baby wipes etc.

• Travel Budget : Enter your overall vacation budget you have for this trip.
• Number of Travellers: Enter the number of people you are paying for on this trip
• Number of Nights: Enter the number of nights you will need accommodations for. This will be used to calculate hotel costs.
• Number of Vacation Days: Enter the number of days you will be on vacation. Include travel days to be safe . This will be used to calculate your overall food & drink, daily transportation and activity costs.
• Total Flight Costs: Enter the estimated total of flight costs for everyone travelling. Be sure to include any baggage fees.
• Transportation Costs: Enter the total transportation costs for the trip. This is for any major transport costs that aren’t flights like trains, city transfers, car or RV rentals.
• Daily Transportation Costs: Enter your anticipated daily transport costs. This is for things like taxis, buses, Ubers, parking costs etc, you might need to get around every day.
• Hotel Costs (Per Night): Enter the amount your accommodations will cost each night. Don’t forget to include any tips for housekeeping staff etc. you may need to pay.
• Total Tour Costs: Enter your overall total budget or cost for tours, including guide tips.
• Activity Costs (Per Day) : Enter the amount you expect to spend on activities daily (do not include tours). These are for things like seeing movies, souvenirs, shopping, trips to a rec centre / pool, bowling, seeing a hockey game or a concert etc.
• Food & Drink Costs (per Day): Enter your overall daily food & drink budget or expected costs for everyone. Don’t forget to include tips.
• Miscellaneous Expenses: Enter an amount of money you will have overall for unexpected expenses or miscellaneous costs that pop up. Be sure to also include extra travel expenses not covered elsewhere.
• Travel Insurance: Enter the overall amount of money you will pay for travel insurance for everyone. This is for things like travel health insurance, trip cancellation insurance etc.

Budget Outputs

Currency Note: While the output is in dollars (uses the $ symbol), you can really use any numerical currency you’d like. Just ignore the $ symbol.

Once you hit the calculate button, you will get 4 pieces of info based on the numbers you provided:

• Total Vacation Costs : This is the estimated cost for your vacation based on the info you provided.
• Over Budget / Under Budget: This is the amount you are either over or under budget. If your expenses are over your vacation budget, it will say Over Budget and the number will be negative. If it says Under Budget, that is the amount you are under your estimated budget.
• Travel Costs Per Day: This is the amount of money your trip will cost you each day.
• Cost Per Person Per Day: This is the amount of money your trip will cost you per person, each day.

Make sure to review your results. If your over budget are there things you can do to bring the costs down? Or is there a way you can save or make more money before your trip?

Why You Need A Travel Budget

Listen, I am all for spending a little extra to do things our family doesn’t get to do at home. 

But there is nothing more anxiety-inducing than running out of money on a trip, or having to pay off huge credit card bills at 28%  interest because you didn’t plan ahead.

This is where a vacation budget can really help. 

It doesn’t mean you can’t have fun or spend money.

Creating a budget will actually help you be able to afford your dreams. Plus be able to relax & have fun on your vacation knowing you won’t be in debt when you get back home.

The trip budget calculator will make financial planning fun, and easy.

How To Set Your Travel Budget & Determine Expenses

1. determine your overall travel budget.

First things first. Decide on your overall vacation budget or the money you are willing to spend on this trip.

When determining your overall vacation budget, you’ll want to consider a few things:

• How much money are you willing to spend on this trip?
• How much have you already saved?
• How long do you plan to go for? (more or less time can impact your budget)
• How many people will be travelling? (some places like Europe limit 4 people to a hotel room, this can significantly impact cost)
• When do you want to travel and how much time do you have to add to your vacation fund?
• How much extra can you afford to put away every week / month on top of your regular bills & household expenses?
• Is there any way you can decrease household expenses, or increase your income to add to your vacation fund faster?

Just make sure it’s a realistic budget. It doesn’t do anybody any good to use too low or too high numbers as a starting point. 

2. Do Your Research

The type of trip you want to take, the length and the type of activities you want to do, will really impact your budget.

For example a week long trip to Thailand will be much different than a week in Japan, or a trip to Disneyworld.

Do some intial research to give you an idea of what your basic travel expenses will costs, so you can have ballpark figures to enter in the travel cost calculator.

You can always google average costs of living / travelling at your destination.

Careful planning is an important part of any travel budget. 

3. Find Ways to Cut Costs

Unless you have a rich benefactor, or suddenly won the lottery, it’s a good idea to consider ways you can cut costs, save money and use your travel budget wisely.

Besides using our holiday budget calculator, our favourite ways to save money on travel expenses.

Transportation & Accommodation

• Find flight deals & error fares : The best way is with Going (Formerly Scott’s Cheap Flights) Flight tickets can be a big expense and make up a good portion of the total cost usually. 
• Consider housesitting: Trusted Housesitters is our go-to site for housesitting around the world.
• Rent a place with a kitchen : Save money on food with a vacation rental . They can also be cheaper than renting multiple hotel rooms if you have a large family or group.
• Compare car rentals: Using Discover Cars can help you save up to 70% by quickly comparing rental cars options.
• Book early: Hotels, flights and trains are generally cheaper booked in advance. You won’t want to risk paying significantly more waiting until last minute.
• Take public transportation: If it’s safe to do so, take the local bus, or walk instead of relying on expensive taxis all the time.

⭐️ Also check out our list of the best ways to save money on flights .

General Money Saving Tips

• Travel off season or peak season: Not only is it usually much cheaper, there’s usually fewer tourists.
• Use a credit card with no foreign transaction fees : Those transaction fees can really add up. Also consider if travel credit cards with points are for you.
• Eat where the locals eat : Avoiding the touristy restuarants, and eating where the locals eat will not only save you lots of money, it will give you a more authentic look into their local cuisine and culture.
• Avoid popular destinations:  The most popular touristy destinations  often cost a lot of money, compared to smaller, lesser known destinations.  
• Consider using travel agents: Sometimes a travel agent can find you a great deal, with much less work on your part. 
• Adjust your travel style: Luxury resorts may be out of your price range. Road trips, camping trips can be just as memorable for for a family vacation.
• Plan free activities : Pick some free activities to do in between your more expensive tours, theme parks, & day trips to ancient ruins. 
• Check out these ways to save on flights

Final Thoughts Using The Vacation Budget Calendar

Creating a vacation budget might seem challenging, but don’t worry! Equipped with the right tools and a bit of strategic planning, your next epic adventure is closer than you think.

Using a vacation budget calculator can help guide you to make smart, affordable choices, allowing you to experience the journey you’ve always dreamed of, without stressing about expenses.

Travel can be exciting and enjoyable at all budget levels. So here’s to making memories with your family, and friends.

Related travel planning resources:

• Ultimate Pre-Travel Checklist
• Family beach vacation tips
• Tips for saving money on road trips
• Easy ways to build a travel fund
• Save money on attractions: Where to buy online tour tickets

Donna Garrison is the founder of Packed for Life, an ever curious traveler with a passion for making memories with her family. With a unique perspective on travelling on a budget gathered over 30 years, 20 countries and 5 continents she gives families the tools & resources they need to experience the joys of travelling more for less through practical solutions. She helps over 20,000 families a month plan & take the family travel, camping and road trip adventures of their dreams in Canada, the USA and around the world. Contact her at: Donna [at] packedforlife.com

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Travel Budget Calculator

Your ultimate guide to smart travel planning.

Planning a trip can be exhilarating, but it often comes with the stress of managing finances. Fear not! With the Travel Budget Calculator, you can embark on your dream journey with confidence. In this guide, we’ll delve deep into the intricacies of budgeting for travel, empowering you to make informed decisions and maximize your experiences.

Understanding the Travel Budget Calculator

Embarking on a journey starts with meticulous planning, and the Travel Budget Calculator serves as your trusty companion. This tool revolutionizes the way you approach travel expenses, offering a comprehensive overview of your financial landscape. By inputting essential details such as number of nights, duration, accommodation preferences, and activity interests, the calculator generates a personalized budget tailored to your preferences and constraints.

Benefits of Using the Travel Budget Calculator

Planning your itinerary can be overwhelming, but the Travel Budget Calculator simplifies the process. Here’s why incorporating this tool into your travel planning arsenal is a game-changer:

• Efficiency in Planning: Say goodbye to tedious spreadsheets and guesswork. The Travel Budget Calculator streamlines the planning process, providing instant insights into your projected expenses. With a few clicks, you can fine-tune your budget and allocate resources efficiently, ensuring a hassle-free travel experience.
• Financial Transparency: Transparency is key to effective budgeting, and the Travel Budget Calculator offers just that. By breaking down expenses across various categories such as transportation, accommodation, dining, and activities, you gain a clear understanding of where your money is allocated. This transparency empowers you to make informed decisions and prioritize experiences that matter most to you.
• Flexibility and Customization : No two travelers are alike, and the Travel Budget Calculator recognizes that. Whether you’re a budget-conscious backpacker or a luxury seeker, this tool adapts to your preferences and constraints. Adjust parameters such as accommodation standards, dining preferences, and activity intensity to tailor your budget to your unique travel style.

Travel Budget Calculator: Your Key to Financial Freedom

In conclusion, the Travel Budget Calculator empowers you to embark on unforgettable journeys without compromising your financial stability. By leveraging its capabilities and implementing savvy budgeting strategies, you’ll unlock a world of possibilities and create cherished memories that last a lifetime. So, what are you waiting for? Start planning your next adventure today and let the Travel Budget Calculator be your guiding light.

FAQs About Travel Budget Calculator

Below are some basic questions that arise while using a travel budget calculator.

Q. How does the Travel Budget Calculator work?

A. Calculating a travel budget isn’t rocket science; it’s just simple math. As we know, if we have exact numbers in front of us, decision-making becomes much easier. A Travel Budget Calculator simply provides us with all the expense numbers.

Q. Is the Travel Budget Calculator suitable for all types of travelers?

A. Absolutely! Whether you’re a budget-conscious backpacker, a luxury seeker, or somewhere in between, the Travel Budget Calculator adapts to your preferences and constraints. Simply adjust the parameters to align with your unique travel style and embark on your adventure with confidence.

Q. Can I trust the accuracy of the Travel Budget Calculator?

A. Yes, the Travel Budget Calculator is designed to provide accurate and reliable estimates based on the information provided. However, it’s essential to factor in unforeseen expenses and fluctuations in prices to ensure comprehensive budget planning.

Q. Can I save my budgeting preferences for future use?

A. Unfortunately, the Travel Budget Calculator does not currently offer a save feature but you can download it. However, you can easily recreate your budgeting preferences each time you plan a trip by inputting the relevant details into the calculator.

Q. How frequently should I update my travel budget?

A. It’s advisable to review and update your travel budget regularly, especially as your trip approaches and circumstances change. Factors such as fluctuating exchange rates, last-minute bookings, and unexpected expenses can impact your budget, so staying proactive is key to financial planning success.

Travel Cost Estimator (Easy Free Tool)

Calculate and download the travel costs for your next trip or vacation.

Travel Details

Transportation, accommodation, food & beverage, other expenses.

Total Estimated Cost: $0.00

Cost Per Day: $0.00

Estimate vs. Budget: $0.00

Per Person Per Day: $0.00

How Do You Calculate Travel Costs?

The first step to figure out your estimated travel costs is to calculate your travel expenses.

To calculate these travel expenses, you can utilize the travel costs calculator above, which allows you to enter some travel details and get an estimate of how much you will spend in total.

• Select your country to get an estimate of a daily budget. We used websites like budgetyourtrip.com , TripAdvisor and  Forbes to collect the estimated daily budget for each country. 
• Add your estimated budget in the first input field.
• The number of vacation days and the number of people in the next two input fields.
• The total costs of your transportation options, flights, car rental, gas, train, bus, or taxi etc.
• The charges per night of the accommodation, hotel, hostel, or Airbnb etc.
• Enter the cost per day of your daily activities and tours / museums, attractions, or participate in any activities.
• The total food and beverage expenses per day, don’t forget to count any snacks and drinks.
• Miscellaneous costs like SIM Cards / Internet / souvenirs and other items.
• Tips at restaurants, hotels, and other services.
• The total cost of your travel insurance, you can also add an emergency fund for unexpected expenses or changes in plans.
• Click Calculate to see the results.
• You can download the budget if you want to keep a copy in your phone.

How Much Budget Do You Need To Travel?

The answer to this question depends on your destination, duration, travel style and preferences.

As a general rule, you can use the following formula to estimate how much budget you need to travel:

Travel budget = (Daily budget x Number of days) + Flight cost (Round-trip)

The daily budget is the amount of money you spend on average per day during your trip, excluding the flight cost.

This includes ground transportation, accommodation, food and beverages, activities and attractions, shopping and souvenirs, travel insurance, and tips and other expenses.

The number of days is the duration of your trip, from the day you depart to the day you return.

This includes the travel days, which are usually more expensive than the rest of the days.

The flight cost is the price of your round-trip ticket to and from your destination.

Flights can vary depending on the season, the airline, the route, and the booking class. You can always use google flight to get the best deals.

For example, if you want to travel to Paris for 10 days, and your daily budget is $100 (Including an Eiffel tower summit ticket ), and your flight cost is $500, then your travel budget is:

Travel budget = ($100 x 10) + $500 = $1,500

This is the total budget you need to enjoy Paris for 10 days, based on the estimated expenses.

Of course, this is just an example, and your actual travel budget may vary depending on your specific trip and choices.

But this formula can give you a rough idea of how much money you need to travel, and help you plan your budget accordingly.

How Much Daily Budget Do You Need To Travel?

There is no definitive answer to this question, as it depends on many factors, such as the destination, the travel style, duration, and your preferences.

This is a general rule that you can use to estimate how much daily budget you need to travel, based on the average cost of travel in different regions of the world.

These numbers are based on a backpacker budget, which means staying in hostels, eating local, using public transport, and doing mostly free or cheap activities.

If you prefer a more high end or luxurious travel experience, you can expect to pay more.

If you’re traveling to more expensive countries like Spain, Greece or Norway for example, you can have some extra expenses.

But on a cheaper or more accessible destination, such as Mexico, Morocco, or Thailand, you can expect to spend less.

Frequently Asked Questions About Calculating Travel Costs

A. There are several ways to save when you travel, like booking your flights and hotels early, avoid traveling during peak times and make the most of reward points and any travel discounts.

A. Use public transportation, walk, or cycle whenever possible instead of relying on taxis or renting a car.

A. To keep track of the expenses that the travel cost calculator gives you, use a mobile app that suits you, a journal and a pen (my favorite), a spreadsheet, or travel expense tracker to jot down any money that comes out of your pocket.

A. Again it doesn’t’ matter if you are traveling for or a weekend or 30 days, the answer will depend on several factors like travel style, destination etc, use the travel cost estimator above and enter 30 days as the number of lavation days, and you will get an estimated budget.

A. Yes. You can use the calculator for any type of trip, whether you are traveling on by RV or by a plane or car.

Other useful calculators

• Airlines Luggage Size And Weight Calculator : Get your airline baggage size and weight for a hassle free flight.
• Travel Packing & Clothing Weight Calculator : Generate a complete packing list for your next vacation while staying within your airline luggage size and weight limits.
• Linear Inches Calculator for luggage

Travel Budget Calculator with Trip Mileage Calculator

This calculator will help you to budget for a family vacation by allowing you to create your own self-calculating worksheet.

You can create the worksheet either from scratch or from a sample travel budget, and you can include up to 8 categories, each with up to 10 expense items.

This budgeting tool even includes a built-in trip mileage calculator, a built-in trip fuel calculator, and 5 built-in multipliers (per adult, child, travel day, fun day, mile, etc.) for calculating the total cost of an expense from a unit cost.

This means that if you make a change to a multiplier, like shorten your trip by one day for example, you will be able to see the cost difference instantly. Cool!

And finally, the calculator will give you the option of printing out a customized blank budget worksheet and/or a completed budget spread sheet. You can even choose whether or not you want blank lines to appear on the printed worksheet, and if so, how many.

Also on this page:

• Don't borrow from your future vacations.
• How to stay on budget while traveling.
• Give equal focus to the post vacation.

Travel Budget Calculator

Create and calculate a travel budget, either from scratch or from a preloaded list of expenses.

Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

Number of adults:

Optional: If you want to use the built-in multiplier for adults, enter the number of adult travelers here.

Number of children:

Optional: If you want to use the built-in multiplier for children, enter the number of child travelers here.

Number of nights of lodging needed:

Optional: If you want to use the built-in multiplier for lodging nights, enter the number of lodging nights here.

Number of travel days:

Optional: If you want to use the built-in multiplier for travel days, enter the number of travel days here. The travel budget calculator will add travel and fun days to arrive at the total number of days.

Number of fun days:

Optional: If you want to use the built-in multiplier for fun days (non-travel days), enter the number of fun days here. The travel budget calculator will add travel and fun days to arrive at the total number of trip days.

Trip Mileage Calculator & Trip Fuel Calculator:

If you will be using a vehicle for travel, this section contains a calculator that will help to estimate the cost of gasoline for trip, as well as a field for entering the estimated total number of miles (miles can then be used as an expense multiplier).

Vehicle's miles per gallon rating:

Optional: If you want to use the built-in fuel cost calculator, enter the vehicle mile per gallon (MPG) rating here.

Cost per gallon of gasoline:

Optional: If you want to use the built-in fuel cost calculator, enter the cost of one gallon of gasoline here.

Miles calculator:

You can use the following mini calc to add up the miles per travel day, per fun day, and any extra. Entries to these fields will be multiplied by their corresponding number of days entered at the top of the calculator and added together to arrive at the total trip miles.

Total number of miles:

Optional: If you want to use the built-in fuel cost calculator, enter the estimated number of drive-miles for the trip. Expand the description in this row to use a mini calc to add up the miles per travel day and/or the number of drive-miles per fun day, plus any extra miles -- all based on the multipliers you entered in the top section of the calculator.

Estimated number of gallons of gasoline:

If you have completed the prerequisite MPG and total miles entries, this line will show the calculated number of gallons of gas needed for the trip.

Cost of gasoline (amount to enter in worksheet):

If you have completed the prerequisite MPG, cost per gallon, and total miles entries, this line will show the calculated cost of gasoline for the trip. You can then enter this amount in the travel budget worksheet below -- usually found under the Transportation category.

Travel Categories and Expenses:

If you would like the Travel Budget Calculator to populate all categories and item fields with suggested titles, tap the Load Sample button in this row. If you would like to clear the category and item titles, tap the Clr button on this row (may also appear as Clear or Clear Worksheet ).

Categories: Tap the plus signs (+) to expand each category. Tap the category names to edit them.

Expenses: After expanding a category, tap any expense name (or "Blank") to open a popup wherein you can make changes to the name and budget amount.

Edit Category Name:

Tapping the "Save" button will close the popup and save the changes to the main worksheet, whereas tapping the "Cancel" button will close the popup without saving the changes.

Note that the "Times" field only applies if the "Per -->Times" option is selected. Tapping the "Save" button will close the popup and save the changes to the main worksheet, whereas tapping the "Cancel" button will close the popup without saving the changes.

Budget Summary:

This section of the calculator will keep an updated summary of your entries.

Amount you are budgeting for travel:

This is the budget amount you entered in the top section of the Travel Budget Calculator.

Total of all entered expenses:

This is the total of all expenses you have entered into the Travel Budget Calculator.

Under/-Over budget:

This is the amount you are over or under budget. If the result is preceded by a minus sign, your entered expenses exceed the amount you are budgeting for your trip.

Printable Worksheet Settings:

To create a printable travel budget worksheet, indicate how many blank category and expense rows you want included in the worksheet, and then tap the "Create Printable Worksheet" button. This will open a printer friendly window displaying your current travel budget worksheet.

Note that you can create a blank budget worksheet by leaving all of category and expense amounts set to zero.

Number of blank categories:

Select the number of blank categories you would like included in the printable travel budget worksheet. The maximum number of categories that will display in the worksheet is 8. For example if you have 6 categories with entries, but would like two more blanks for later use, select 2 from the drop-down menu. This will include 6 completed categories in the worksheet and two blank categories. If you are printing out a blank worksheet, simply select the total number of categories you would like included.

Number of blank expense lines:

Select the number of blank rows you would like included for each category in the printable travel budget worksheet. The maximum number of rows that will display for each category in the worksheet is 10. For example if you have a category with only 4 entries, but would like two more blank rows for later use, select 2 from the drop-down menu. This will include the 4 completed rows, plus two blank rows, for the category in the worksheet . If you are printing out a blank worksheet, simply select the total number of blank rows you would like included for each category.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Related Calculators

Help and tools, on how to budget for and take vacations in a way that won't ruin future vacations., budget travel tip #1: don't borrow from your future vacations.

The most important budget travel tip is to never borrow money to pay for a family vacation.

Because if you continue to borrow money to pay for your family vacations you will have less and less money available for future vacations.

And the more financial stress you experience as a result of the ever-increasing monthly debt payments, the more you will feel you need an escape (vacation) from the added stress, and the more you will have to borrow to escape.

It's a vicious cycle that can lead to financial and emotional bankruptcy.

Budget Travel Tip #2: Travel On a Budget

If you want to avoid jeopardizing future vacations, it's imperative that you create a realistic budget for your trip and then stick to your budget.

This is rarely easy since traveling with credit cards is safer than traveling with cash. But unlike an empty wallet, a credit card does not provide a clear indication you've exceeded the amount you budgeted for a given expense category.

Therefore, in order to make sure you stay within your travel budget limits, it's important that you keep a running tab of all of your travel spending as it occurs.

One of the best ways I have found to keep a running tab of your travel spending is to use a blank checkbook register.

• Allocate a few pages of the register for each trip expense category.
• Record the budgeted amount as the starting balance for each series of pages.
• Record each expenditure as they occur into the appropriate section of the checkbook register and deduct the amount from the balance -- just as you would when writing a check.
• When the balance of a category reaches zero you know you have exhausted the funds budgeted for that category.
• Spending any more for a zero-balance category means you will have to either transfer funds from other sections, or increase your debt.

Budget Travel Tip #3: Give Equal Focus to the Post Vacation

In order to successfully plan a budget family vacation, it's important to use your imagination for more than just imagining how much fun you will have.

You also need to give equal focus to imagining how you will feel about the vacation after it has occurred. You can do that by honestly answering the following types of questions.

• Will the memories, souvenirs, and photos be as exciting to you as looking forward to the vacation?
• Will you spend the next year partially depressed because you dearly miss laying on the beach, hearing the ocean waves crash onto shore, and being waited on hand and foot?
• Will you spend several weeks working harder than normal just to catch up on everything you fell behind on while away?
• How many hours did you have to work at your job in order to earn the after-tax, after-work-related-expense income to pay for the vacation?
• After calculating the lost interest income from not being able to invest the cost of the vacation, will you still see the vacation as being a good investment?
• Is there anything else you could have bought with the cost of the vacation that the family could have enjoyed for a longer period of time than the length of your vacation?
• After returning home from your vacation do you think you will feel like you could have gotten by with less of a vacation?

The bottom line is, don't be like most people who only use their imaginations to envision how much they will enjoy the "party" aspect of their actions, while failing to use their imaginations to envision the "hangover" aspect of their actions.

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.

Vacation Budget Calculator

This Vacation Budget Calculator by MoneyFit.org will help you financially prepare for your planned upcoming vacation, whether you are heading across an ocean or just across town.

How This Calculator Can Help

Money Fit’s Vacation Budget Calculator steps you through 11 trip-related expense categories to remove the guesswork from trying to determine how much money you will need to spend on your upcoming travel.

From airfare or cruise tickets to gasoline to travel snacks, or from attraction fees to dining out and shopping for souvenirs, this tool covers the most significant expenditures of your upcoming vacation. Before overspending on your next trip, spend 5 or 10 minutes now with this calculator.

Expected Expenses

Contact information.

*Meeting with a counselor and participating in a DMP are not factors in a FICO credit score:  www.myfico.com/credit-education/credit-scores/whats-not-in-your-credit-score

Additional Vacation Budget Related Money Motivation Articles:

Find important answers, advice, and analysis to a wide range of personal finance topics in our Money Motivations blog.

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© 2024 Money Fit by DRS 6213 N. Cloverdale Rd, Suite 130, Boise, ID 83713 Money Fit is a nationwide nonprofit 501(c)(3) organization. We do not lend money.

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• Obtain and review your credit report, and
• Request verifications of your income and rental history, and any other information deemed necessary for improving your housing situation (for example, verifying your annual property tax obligations and homeowner’s insurance fees)
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NOTE: This sheet is to inform new or returning clients about our services, records, fees, and limitations that may affect you as a consumer of our services. This form also discloses how we might release your information to other agencies and/or regulators. If you do not understand a statement, please ask a Debt Reduction Services (DRS) counselor for assistance.

Debt Reduction Services, Inc. (DRS)  has put into place policies and procedures to protect the security and confidentiality of your nonpublic personal information. This notice explains our online information practices and how we use and maintain your information to conduct our financial education and credit counseling sessions and to fulfill information and question requests. This privacy policy complies with federal laws and regulations.

To provide our financial education and credit counseling services, we collect nonpublic personal information about you as follows: 1) Information we receive from you, 2) Information about your transactions with us or others, and 3) Information we receive from your creditors or a consumer reporting agency. We do not share this information with outside parties.

We use non-identifying and aggregate information to better design our website and services, but we do not disclose anything that could be used to identify you as an individual.

You hereby authorize DRS, when necessary, to share your nonpublic personal, financial, credit, and any information that you provided (including any computations and assessments produced) with the following entities in order to help DRS provide you with appropriate counseling or guide you to appropriate services: third parties such as government agencies, your lender(s), your creditor(s), and nonprofit housing-related and other financial agencies as permitted by law, including the U.S. Department of Housing and Urban Development.

To prevent unauthorized access, maintain data accuracy, and ensure the correct use of information, we have put in place appropriate physical, electronic, and managerial procedures to safeguard and secure the information we collect online. We limit access to your nonpublic personal information to our employees, contractors and agents who need such access to provide products or services to you or for other legitimate business purposes.

Debt Reduction Services, Inc. complies with the privacy requirements set forth in the HUD housing counseling agency handbook 7610.1 (05/2010), including the sections 2-2 Mc, 3-1 H(2), 3-3, 5-3 F, and Attachment A.5. At all times, we will comply with all additional laws and regulations to which we are subject regarding the collection, use, and disclosure of individually identifiable information.

• Services : DRS provides the following housing-related services: counseling that includes Homeless Assistance, Rental Topics, Pre-purchase/Homebuying, and Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase); Education courses that include Financial literacy (including home affordability, budgeting, and understanding use of credit), Predatory lending, loan scam or other fraud prevention, Fair housing, Rental topics, Pre-purchase homebuyer education, Non-delinquency post-purchase workshop (including home maintenance and/or financial management for homeowners), and other workshops not listed above.

Please refer to  DebtReductionServices.org  for details of our services.

• Limits : Our services are limited to our normal weekday business hours. We do not provide individual counseling or education services after hours or on weekends, although our education courses are available 24/7.
• Fees : We do not charge fees for our financial management counseling and education. However, if you use them, you may have to pay for our Debt Management Program, Student Loan Counseling, Bankruptcy Certificate Services or certain financial education courses (homebuyer education, rental topics, fair housing, predatory lending, and post-purchase-non-delinquency including home maintenance and/or financial management for homeowners).
• Records : We maintain records of the services you receive, including notes about your progress or other relevant information to your work with us. You have the right to access and view your records by making a request to your counselor.
• Confidentiality : We respect your privacy and offer our services in confidence with the understanding that we may share such information with auditors and government regulators. Certain laws or situations may also lead to disclosing confidential issues, such as those involving potential child abuse or neglect, threats to harm self or others, or court subpoenas.
• Refusal of Services : You have the right to refuse services without any penalty or loss.
• Disclosure of Policies and Practices : You will be provided our agency disclosure statement.
• Sharing of Information : Sometimes we will need to contact other agencies or we may need to share your information, including your records, with other agencies or with regulators. We will do this only if you sign this form that gives us permission except for limited reasons; please see # 5 above for examples of such situations.
• Other : You have the right to be treated with respect by our staff, and we expect the same from you in return. We encourage you to always ask questions if something is not clear. We also encouraged you to express your thoughts and advocate throughout our services.

You acknowledge that this authorization will remain in effect for the duration of time that DRS serves as your housing counselor or financial education provider. You also acknowledge that should you wish to terminate this authorization, you will notify DRS in writing.

Disclosure  Statement

Program disclosure form, disclosure to client for hud housing counseling services.

• Housing Education Courses : DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
• Home Equity Conversation Mortgage (HECM) Counseling (RMC) : Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
• Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC) : Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
• Services for Homeless Counseling (HMC) : Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
• Pre-Purchase Counseling (PPC) : Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
• Rental Housing Counseling (RHC) : Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
• A Debt Management Program (DMP) for consumers struggling to pay their credit cards, collections, medical debts, personal loans, old utility bills, and past-due cell phone accounts;
• The Budget Briefing and Debtor Education Certificates that are required during the Bankruptcy filing process;
• A Student Loan Repayment Plan Counseling and application service.

Relationships with Industry Partners

No client obligation, housing counseling and education fee schedule, online education program fees*.

Homebuyer Education Course : $59 per participant

• Self-paced course  available here , our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

Rental ,  Fair Housing ,  Predatory Lending  /  HOEPA ,  Post-Purchase  (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners)  Online Workshops : $49 per participant

• Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g.  credit ,  budgeting ,  homeless prevention ,  debt prevention ): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying  Counseling,  Rental  Counseling,  Post-purchase  Ownership  Maintenance  and  Financial Management : $75

• Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate :

Credit Report Fee : Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services  Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

• Travel Planning Guide

A Travel Planning Guide

Travel cost calculators for countries around the world.

Budget Your Trip is designed to help you plan a better vacation by gathering travel costs for various destinations around the world. Whether you're traveling on a shoestring budget, or looking to splurge on a luxury resort, our website will help you understand how to get the most for your money.

We offer travel planning resources that you can use to estimate, plan, and track your travel budget. Our information and resources are free of charge for travelers. If you're in the beginning stages of planning your trip, you can search for your destinations here , find your favorite place, and see what others have spent on low-end, mid-range, and luxury trips and vacations. Alternatively, you can select a country from the list of countries to find out what the typical mid-range travel costs are for that area. The costs are broken down by category and include everything from accommodation, to food, entertainment and transportation budgets. These destination budget pages also give you an overview of what to expect in your chosen country, things to see and do, how to best get around, and what you can expect from the local cuisine. From a country page, you can dive deeper into specific cities, too. This information is designed to be used as a starting point for you as you begin deciding where to go and how much you need to save.

All of our information comes from travelers just like you. All of the average daily travel costs are calculated from travel budgets that have been provided by real people who have already visited these locations. This way, you can get a realistic perspective on what you might spend. Our numbers are constantly updated to ensure that you get the most up-to-date information. If you register on our website (free) you can use our travel planning tools to help you plan your own budget before your trip even begins. You can break down your estimated expenses by category and see graphs and charts of where your money will likely go. Learn which cities and countries will have the greatest impact on your trip expenses, and rework your route to ensure that you get the most bang for your buck.

Then, once your trip begins, you can track your budget to make sure you don't overspend. Whether you're going on a one week holiday, or a one year odyssey, it helps to know that you're not spending more than you have saved. By tracking your budget on this website, you'll also be helping other travelers. If you notice your destination of choice is missing from our list, track your trip costs on our website and help future travelers. Your expenses will be added to our estimates, and as our data grows, so does our comprehensiveness and accuracy.

This is a tool that is created by travelers, for travelers. We understand how important budgeting is to a trip. Guidebooks may offer some budgeting advice, but information is often out-of-date, difficult to locate, and limited in its value. This website is supported by a community of travelers who want easy accessibility.

Are You Just Beginning?

Many travelers become overwhelmed when they begin planning their trip. If you're going on vacation for a few weeks, it's hard to narrow down your choices to one or two countries. If you're taking time off of work for a gap year, planning your route can get overwhelming to say the least. Whatever type of trip you're planning, you should first narrow your options down by region. Some parts of the world are more expensive than others, but within regions there is a lot of variability as well. You can also check out our travel planning guide for tips and advice on traveling cheaper.

Narrowing Your Options

The region or countries you decide to visit will dictate how much money your trip will require. It's best to understand costs before you begin your trip, so you know exactly what to expect from your destinations of choice.

Asia in particular has countries that range from super expensive, like Japan, to very low cost, like India or Nepal. Southeast Asia is well known as an affordable destination for those on a limited budget, but if you want a high end vacation, there are plenty of resorts in Thailand as well.

Africa can be surprisingly expensive for first time visits. Depending on your country of choice, the selection of hotels can be limited, restaurants may be overpriced, and safaris can quickly eat away at your budget. Still, you'll find plenty of affordable places to go in this vast continent. Ethiopia is an unexpected surprise for visitors who want to see a different side of Africa. Morocco is Africa with an Arab twist, and Kenya is probably your most affordable option if you're hoping to do a safari.

South America is another region that is reasonable in cost. Some countries, like Brazil, may quickly eat away at your budget, but others, like Bolivia, are perfect for those with limited financial options.

In Europe, you'll quickly find that your money goes a lot farther in the Eastern European countries than it does in the Western European countries. Still, prices can be quite high all over, so it's good to learn a few tricks, like couchsurfing, to ensure that your finances stay in check.

If you're headed to North America, national parks and small towns are usually the least expensive options. Consider traveling with a tent and you'll save yourself a lot of money. While hostels are few and far between, campgrounds are abundant, particularly near the most popular parks like the Grand Canyon and Yosemite. In Mexico, head inland and you'll find many more affordable choices than you would on the coast where luxury resorts are abundant.

The Caribbean Islands are not a popular option for independent travelers. You'll rarely find a backpacker spending time in the region, but if you're looking for a comfortable vacation with all the amenities, then you've found the right place to go. Despite the high costs, or perhaps because of them, it is important to understand which islands offer the best deals for cost conscious travelers.

Central America is a small region, but it has a lot to offer. It is a great introduction to a new culture, and your budget can be kept to a minimum. Still, if you're looking for a resort, you don't have to look far as there are many diverse places to stay in this fascinating area.

Many people shy away from the Middle East, but those that make the trip are greeted by a welcoming culture, friendly people, and a one of a kind experience. Countries are diverse in style, culture, and costs, so it's best to do your research ahead of time and choose places that will fit your travel style to ensure your trip is all that you hoped.

Australia and New Zealand are no longer budget destinations, but backpackers still flock to the area. By planning ahead and looking for the best deals you can ensure you get the most out of your trip.

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• Trip Budget Calculator

Calculate an estimated budget for your upcoming trip using this calculator.

Estimated Trip Budget:

Please fill in all required fields.

The Trip Budget Calculator is an essential tool to help you accurately estimate and plan your travel expenses for a seamless and enjoyable journey. By entering crucial trip details such as transportation, accommodation, food, activities, and miscellaneous costs, the calculator provides you with a well-informed budget projection.

How to Use the Trip Budget Calculator:

• Number of Travelers: Begin by entering the total number of travelers who will be joining the trip. This helps the calculator accurately estimate expenses based on the size of your group.
• Number of Days: Input the duration of your trip in terms of the number of days you plan to spend at your chosen destination. This allows the calculator to factor in costs over the entire duration of your stay.
• Tour Destination: Specify the name of your tour destination, such as a city or place you'll be visiting. This information aids in understanding the location and potential cost variations associated with your trip.
• Average Daily Expense per Traveler ($): Provide an estimate of the average daily expenses per traveler. This should encompass basic necessities like meals, local transportation, and other small expenses.
• Transportation Cost ($): Enter the anticipated cost of transportation for your trip. This includes expenses related to flights, train tickets, or fuel costs if you're driving to your destination.
• Daily Food Expense per Traveler ($): Estimate the daily food expenses per traveler, covering meals, snacks, and dining out. This allows the calculator to account for your sustenance throughout the trip.
• Budget for Activities ($): Allocate a budget for the various activities and attractions you plan to enjoy during your journey. This includes entrance fees, excursions, and entertainment expenses.
• Miscellaneous Costs ($): Consider any additional costs that might arise during your trip, such as souvenir shopping, tips, and unforeseen expenses.

Real-Time Example:

Suppose you're planning a trip with the following details:

• Number of Travelers: 2
• Number of Days: 7
• Tour Destination: Paris, France
• Average Daily Expense per Traveler: $100
• Transportation Cost: $500
• Daily Food Expense per Traveler: $30
• Budget for Activities: $300
• Miscellaneous Costs: $200

By inputting the above values and clicking "Calculate," the Trip Budget Calculator will provide you with an estimated total budget of $2820 for your trip to Paris, France. This real-time example demonstrates how the calculator helps you plan and budget for various aspects of your travel, ensuring a worry-free and enjoyable experience.

Benefits of the Trip Budget Calculator:

• Precise Budgeting: The calculator ensures that you have a realistic and comprehensive budget plan tailored to your travel preferences.
• Effective Planning: By breaking down expenses, you can prioritize and allocate funds wisely, optimizing your travel experience.
• Financial Confidence: With a well-calculated budget, you can enjoy your trip without worrying about overspending or financial constraints.

Conclusion:

The Trip Budget Calculator simplifies the process of planning your travel expenses by offering an insightful budget estimate. Utilize this tool to make the most of your journey, confident in your financial preparations and able to focus on creating unforgettable memories. Travel with peace of mind, knowing you've taken the necessary steps to manage your expenses efficiently.

Note: If the tool does not work properly or the results are different than you expected, please help us improve it by providing details about the issue. Click here to contact us and report the problem.

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Travel Budget Calculator

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Need to create a travel budget? This nifty calculator will help you estimate your costs based on the country you choose, including Europe, Asia, and more. You can even check airfares without leaving this page.

Huge shoutout to Budgetyourtrip.com . Their database of global travel costs makes this calculator possible. Be sure to visit their site and sign up for their great newsletter!

Ready to plan your adventure? It’s as easy as 1•2•3

• Find flights & hotels on Expedia
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• Get a free travel insurance quote from World Nomads

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Join a women’s adventure.

I’m taking small groups of women on budget-conscious tours that dive deep into some of my favorite places. We eat, dance, cook, and walk the streets with local people.

Learn about budget travel …

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• How To Plan Last Minute Travel
• How to Travel for Free as a Volunteer

FAQs about creating a travel budget

Start by researching airfare, which can be as much as half your trip cost. Then look at lodging costs. Add in any expensive tours or other entertainment. If you’re frugal, and willing to cook some of your meals, your food and transportation don’t need to cost any more than they would if you stayed home. But keep in mind that expensive restaurants and shopping are big temptations, and many travelers like to indulge themselves with spa treatments, cocktails, coffee drinks, appetizers, and desserts.

It depends on where you’re going. In parts of Southeast Asia, South America, and Africa you can eat, sleep, and enjoy yourself for as little as $50 a day. Europe, Canada, Australia, and the US are quite a bit more expensive, and if you choose to travel in a luxurious style, you could spend $200 a night just on lodging. The best way to know how much to budget is to research actual costs for the type of lodging, transportation, and activities you would want at your destination.

If you want to save on transportation costs, stay close to home. If you want to travel internationally, consider the northern parts of South America. Ecuador and Colombia are affordable countries to visit, and airfares are very reasonable from the US. If you don’t mind spending on airfare but want to live cheaply after you arrive, consider Southeast Asian countries like Malaysia, Indonesia, Thailand, or Cambodia. All have very low costs of living.

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Travel Budget Calculator Tool

Planning your next vacation? Use this free budget travel calculator tool to plan and estimate your next trip.

Please enter your expenses on a per-person basis. (U.S. dollars )

How many days will you be staying?

What is the hotel's nightly rate, what's your daily budget for food and drinks, is there a fee for travel visas, what is your budget for fun activities, what's the daily car rental rate at your destination, expected airfare costs (per-person):, do you plan to purchase travel insurance.

(The average cost for travel insurance is about $125USD)

Fees for additional baggage (per-person):

Estimate total trip cost, enjoy this calculator share it or tweet it.

Attention all vacation planners! Are you tired of the stress and confusion that often comes with budgeting for your next trip? Look no further than our free budget travel calculator tool! Designed to streamline the vacation planning process, this tool can help you estimate your expenses and stay on budget, making your next adventure stress-free and affordable. Give it a try and see how easy vacation planning can be!

How to calculate your travel budget using this trip calculator tool

• Enter the cost of obtaining a travel visa for the destination country. (In US dollars)
• Choose whether or not to get travel insurance for your trip. (Highly recommended.)
• Enter the number of days you’ll be in town. You can move the pointer forward or backward by dragging it, or you can input the number of days in the box next to it.
• Input your estimated budget that you have set aside for some fun activities during your trip. (Think local private tours?)
• Enter the cost of your hotel, Airbnb, or hostel stay per night.
• If you’re renting a car, enter the daily rate.
• Enter the amount of money you plan to spend on food and beverages during your trip.
• Enter the per-person cost of plane tickets to and from your location.
• The entire cost of your trip will be displayed on the right side.

Having the right budget will make sure that your next adventure is one to remember.  This free vacation calculator can help you plan the perfect vacation. Wishing you a wonderful trip!

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• Travel budget

Travel Budget Calculator: Plan Your Dream Trip Without Breaking The Bank

• 1.1 How Does the Travel Budget Calculator Work?
• 2 Benefits of Using a Travel Budget Calculator
• 3 Maximizing Your Travel Budget
• 4 Conclusion

The Importance of a Travel Budget Calculator

Are you dreaming of a well-deserved vacation but worried about overspending? Look no further! Our travel budget calculator is the perfect tool to help you plan your trip while keeping your finances in check. Whether you’re a seasoned traveler or a first-timer, this calculator will ensure that you make the most of your budget and have an unforgettable experience.

How Does the Travel Budget Calculator Work?

Our travel budget calculator takes into account various factors such as transportation, accommodation, food, activities, and miscellaneous expenses. It provides you with an estimated budget for your trip based on your destination, duration of stay, and personal preferences. By inputting these details, the calculator will create a customized budget plan tailored to your needs.

Benefits of Using a Travel Budget Calculator

1. Financial Peace of Mind: Planning ahead and sticking to a budget will help you avoid overspending and financial stress during your trip. With our travel budget calculator, you’ll have a clear idea of how much money you need to allocate for each aspect of your journey.

2. Flexibility: Want to splurge on a fancy dinner or an adventurous activity? No problem! Our calculator allows you to adjust your budget accordingly, so you can indulge in those exciting experiences without feeling guilty.

3. Efficient Planning: With the help of the travel budget calculator, you can easily compare prices and make informed decisions. It will suggest cost-effective alternatives for accommodations, transportation, and activities, helping you save money without compromising on quality.

Maximizing Your Travel Budget

1. Research Your Destination: Before using the travel budget calculator, gather information about your destination. Look for affordable accommodations, local transportation options, and budget-friendly activities. This way, you can input accurate data into the calculator and get the most precise budget estimate.

2. Prioritize Your Experiences: Make a list of the must-see attractions and activities at your destination. Allocate a higher portion of your budget to these experiences, and consider cutting back on less important ones. This will ensure that you make the most of your trip and create lasting memories.

3. Be Realistic: While it’s essential to save money, it’s also crucial to be realistic about your expectations. Don’t compromise on your comfort or safety to save a few bucks. Use the travel budget calculator as a guide, but always trust your instincts when it comes to important decisions.

Planning a trip doesn’t have to be stressful or financially draining. With our travel budget calculator, you can take control of your expenses and make the most of your well-deserved vacation. So, what are you waiting for? Start using our travel budget calculator today and embark on your dream trip without breaking the bank!

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You are here

Holiday budget planner, how much do i need to travel overseas.

If Travel Agents had a dollar for every time a client asked this question they’d move past investment bankers on the earnings scale pretty quickly. So where do you start?

Our shiny new budget planner will help you decide how much you need based on your destination, your holiday, and your own spending habits.

Punch in your holiday deets and some amazing robots will combine crowd-sourced Numbeo data* with our exchange rates - just like magic. Bippity boppity boo, budget!

Try our travel budget calculator now!

What goes into a travel budget.

A good budget is like a warm apple pie. It makes you feel all safe and warm, but it takes a few ingredients to get to the finished product. Having a holiday budget also means you’ll be able to have more apple pie and not feel guilty apart from the excess holiday calories but they don’t really count anyway, right?

Everybody’s budget is different, but this will give you an idea of the things to think about when planning your holiday expenses:

Flights and transport costs

Flights are the big expense for most travellers, especially if you’re heading to Europe or the USA. If you’re planning on moving around during your holiday (disregard if you’re planning on spending 2 weeks parked in an overwater bungalow in Tahiti) chances are you’re going to need to splash the cash on public transport, airport transfers and the odd Uber or taxi.

Ah food, one of the best parts of travelling overseas and a worthy and important part of any travel budget. Food is probably the hardest part to budget precisely for on the account of everyone’s tastes being different, the vast difference between prices between places on the ground and the variation of cost of living between different countries.

Are you planning on bungee jumping in NZ, spree shopping in Paris, hiking the Inca trail, hot air ballooning in Cappadocia, scuba diving in Fiji, checking out Stonehenge or any other activity that isn’t free? Make a list of your must do’s, have a Google and add all these costs up too.

Pre-departure expenses

Probably the easiest piece of the budget puzzle to forget because it’s the least fun aspect of your holiday. Who gives a hoot about immunisations, visas and travel insurance? You, that’s who. If you can’t afford travel insurance, you can’t afford to travel. Check out Smart Traveller for handy tips on what’s required for entry into the country of your dreams.

Inspiration

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How Much Money Do I Need To Travel Europe?

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How Much Money Do I Need To Travel the USA?

Why travel money.

How to Budget for a Trip: The Easiest Travel Budgeting Method (+ Tips!)

Here’s a silly secret: I love budgeting travel… and I also think that most guides to creating a travel budget make it entirely too complicated.

I initially wrote this guide on how to budget for a trip almost 7 years ago, when we were prepping for what we were then calling a 6 month round the world trip (spoiler: depending on your definition of “trip”, it never actually ended).

50+ countries and the better part of a decade later, I’m still using the exact same, simple formula for calculating our budget while traveling–even if our definition of “on a budget” has changed over the years.

Planning to hit the road soon and wondering how much money you need for your trip?

Whether you’re headed off on a 2-week Europe trip or you’re planning to live out of a backpack for years like we did, our simple method for budgeting travel expenses has you covered.

Here’s the travel budget strategy that we swear by to this day!

Table of Contents

Our Formula for Creating a Travel Budget

Why we like this travel budgeting system, example of how to budget for a trip, tips for travel budgeting, planning a trip.

Some links in this post may be affiliate links. If you make a purchase through one of these links, we may earn a small commission at no extra cost to you. Please see our disclosure policy for more detail.

Here’s our incredible simple calculation for travel expenses:

(Money Saved – Major Expenses) / Number of Days Traveling = D aily Budget

That’s it–simple, easy to remember, and allows you to easily translate your savings from a pile of money into an actual travel budget.

Some long term travelers prefer to divide by the number of weeks instead of the number of days, on the premise that some days you may blow a large amount, and then have cheaper days to make up for it.

While that is 100% true and Jeremy and I definitely balance expensive days with inexpensive ones, I still prefer to think in terms of days.

In my experience, smaller numbers tend to be more easily tracked, and are less overwhelming as a result.

How to Define Major Travel Expenses

“Major expenses” can be somewhat of an ambiguous term, but I tend to use this for pricey plane tickets, travel insurance, and large monthly bills that you’re still responsible for during your trip (say, a car payment or health insurance). 

If you’re headed to any destinations that require a visa, be sure to include those costs as well!

For shorter trips, I also like to include lodging and certain cheaper transportation costs (night trains, budget airline flights, rental cars) here, but for long-term travel, that’s obviously not practical.

The point of the major expenses category is simply to remove the money that is allocated for specific expenses from play before determining how much you have to spend.

This is to avoid either a) running around feeling like you have more money than you do and overspending or b) anxiously fretting about the upcoming expense (like a plane ticket home) and saying no to things that you want to do because you’re needlessly stressed about not having enough money.

Personally, we’re much more likely to do the second.

Looking back on almost 7 years of travel, I can now definitively say that there have been more experiences than we’ve said no to when we should have jumped at the opportunity than times we splurged on an experience that wasn’t worth deducting from our calculated travel budget.

Luckily, thanks to this travel budgeting system, those experiences have been few and far between.

For us, this method of creating a travel budget works perfectly.

Thanks to careful tracking, we have never overspent on a trip, and we’ve also never worried much about money during our travels.

The worst that will happen is that we have a couple of pricey days in a row and follow it up with a day of inexpensive hiking or laying on the beach to make up for it (hardly a tragedy).

While I tend to track our daily expenses via mental estimates, I will write out cash expenses daily and credit card/more easily tracked expenses a couple of times a week–yes, even 7 years later.

It may seem like a drag, but 10 minutes of work can relieve a lot of stress and fear of the unknown that can come with just letting your money slip to the back of your mind.

(At least, it will be in the back of your mind until you start panicking over the thought of where your checking account balance might be when trying to fall asleep at night!).

Let’s say that a couple traveling is traveling to Paris from the USA for one week, and wants to calculate their travel budget.

In the interest of not searching too deeply for a pretend trip, I’ll say they buy the first flights they search for don’t stress about that too much. They’re also cautious and want travel insurance for their trip.

Our pretend couple has a $4000 travel budget, in total.

Major Travel Expenses for Our Mock Paris Trip

Round-Trip Flights to Paris: $2000

Travel Insurance : $150 

Hotel Room, $130/night for 7 nights: $910

($4000 total budget – $3060 major expenses) / 7 days = $134.28/day to spend, or $67.14/per person, per day.

I would round those down to $134 or $67, both for the ease of math and to build in a slightly conservative slant to the budget.

This would need to cover activities/tours, souvenirs/shopping, transportation while in Paris, and food/drinks.

That’s not only doable but completely comfortable in Paris, as long as our pretend couple is not hoping for luxury travel.

Know what’s worth it to you.

If you’re a major foodie, skimping on dining probably isn’t going to work for you–and if you’re a SCUBA lover, suggesting you limit dives on a beach trip may sound miserable.

Whatever your priorities are, focus on those and skimp on other areas, instead–even if other travelers consider the things you skip to be must-see sights.

Check in on your budget regularly.

Even if you don’t check in daily, be sure to track your budget at least every few days.

This will help keep you from blowing off course in either direction and also relieve any anxiety you have about not knowing the status of your budget.

Remember that traveling on a budget doesn’t mean having less fun!

Some of our favorite travel experiences cost little to nothing.

Browsing local markets, enjoying a beach day, going for a hike, wandering aimlessly through cities, sampling street food, and more all make for wonderful and incredibly memorable travel days.

Travel budgeting can be daunting when you get started, but once you get used to it, it enhances, rather than detracts from your experiences.

Not only are there wonderful travel experiences to be had at all budgets, but knowing where you are in your trip financially is much less stressful than constantly worrying that you’re over your travel budget… without having the concrete data to confirm either way.

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About Kate Storm

In May 2016, I left my suburban life in the USA and became a full-time traveler. Since then, I have visited 50+ countries on 5 continents and lived in Portugal, developing a special love of traveling in Europe (especially Italy) along the way. Today, along with my husband Jeremy and dog Ranger, I’m working toward my eventual goal of splitting my life between Europe and the USA.

11 thoughts on “How to Budget for a Trip: The Easiest Travel Budgeting Method (+ Tips!)”

Excellent post. I was checking continuously this blog and I am impressed!

Extremely useful information specifically the last part 🙂 I care for such info a lot. I was looking for this particular information for a long time. Thank you and good luck.

Thank you! Appreciate you stopping by! 🙂

bookmarked!!, I love your site!

Another small thing to consider would be to convert your daily budget amount to local currency.

Great point, thanks for stopping by! 🙂

This is by far the best travel blog I have come across. Thank you!!!

So happy to hear that, DeElla!

Great info!

Good info. Thanks we will be traveling Italy for 28 days. The last 7 we are staying with friends. We don’t want to rent a car but use trains between towns and subway/buses in the cities. How do I budget for that? Are there month long passes for each? Excluding airfare we have $7000 food/transportation/entrance fees. Does that sound doable? We are flying into Rome, then Florence and take day trips from there, then ending up in Ugento. Any recommendations?

Thanks, Brenda!

You can definitely get around Italy without a car, that’s not a problem at all. $7000 for for 28 days on the ground also sounds reasonable (I’m assuming you’re traveling as a couple).

Trenitalia does have a monthly pass of sorts for trains, similar to the Eurail pass but for Italy only. However, I wouldn’t necessarily recommend it without knowing your schedule. Most likely, booking each leg individually is fine.

For short distances in rural areas that you travel by bus, you won’t need online tickets or anything like that. Same for any “local” trains you take, like the slow train between Florence and Bologna. You can buy those tickets step by step as you go, as the prices are set.

Where the prices get higher and you’ll need to budget in advance is for the high-speed train routes around Italy, like from Florence to Lecce, for example. Those trains have dynamic pricing, so if you can book your tickets in advance, you’ll both spend less and be able to budget more easily.

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A Solo Woman Traveling

Boutique Travel Guides & All-Female Luxury Tours

Best Free Budget Calculator For Travel Expenses

When you are planning a trip it is essential to map out your expenses using a budget calculator travel tool like this one!

As a full-time expert traveler , I use a trip cost calculator to help me stay on track with my budget . So if you to learn how I track expenses with a free travel calculator, you’ve hit the jackpot ; )

This post will not only let you calculate your travel expenses for free , but I will give you my expert advice on how to save money and what to budget for on your trips!

Best Tools For Stree-Free Travel Planning

When it comes to planning a memorable trip , one of the most crucial aspects is budgeting. Setting a clear and realistic budget ensures that you can make the most of your journey without breaking the bank. 

Luckily, in today’s digital age, there is an abundance of travel budget calculators available to assist you in the process. 

I love taking advantage of these smart tools designed to help you estimate expenses accurately and efficiently, making your travel planning experience smoother than ever before.

Try The Free My Custom Travel Cost Calculator

Travel budget calculator.

Use this vacation trip calculator to make your travel budget!

Tips on Using These Calculators Effectively

1. Be Realistic: You would only be lying to yourself if you underestimated your total travel costs. So be sure to provide accurate information about your spending habits to ensure a realistic holiday budget.

2. Consider Additional Expenses : Even if you are good at staying on a budget, prepare for unexpected things to happen when traveling.

Account for potential emergency funds and extra costs to accommodate unforeseen travel spending.

3. Stay Flexible : Use the calculators as a guide but remain open to adjustments during your trip based on actual expenses and experiences.

4. Prioritize Your Must-Do’s : Allocate more funds to experiences and activities that are most important to you in the destination country.

If you would rather eat a fancy meal, than visit a museum, then skip the museum. Or if you want to explore staying at luxury resorts then find a way to lower your meal expenses.

The Benefits of Using a Budget Calculator Travel Tool

I am all about making my journey a hassle-free and financially sound experience!

Traveling is such a rewarding and enriching experience, but without proper financial planning, it can quickly become stressful and overwhelming, especially if you are traveling solo .

This is where the budget calculator travel tool comes to the rescue. A budget calculator is a powerful tool that allows you to estimate expenses accurately, plan your finances effectively, and make the most of your journey without any financial surprises.

Let’s explore the numerous benefits of using a budget calculator travel tool and understand why it’s an essential companion for any traveler.

1. Precise Expense Estimation:

A budget calculator takes into account various aspects of your trip, such as transportation, accommodation, food, activities, and miscellaneous expenses.

Just by providing detailed estimations for each category, the tool ensures you have a comprehensive view of your potential expenses, leaving no financial aspect unaccounted for.

2. Financial Control

One of the primary advantages of a budget calculator is the sense of financial control it provides.

I like setting spending limits for different categories, so I don’t go overboard. This tool helps me see where I may be spending more in one category than the other.

I can easily work to adjust my budget up or down depending on the category.

3. Tailored to Your Preferences

Use this calculator based on your unique travel style. For example, if you’re a budget-conscious backpacker, or a luxury seeker, like me, you can use this tool to set your max budget and tailor from there.

This allows you to create a personalized budget that suits your preferences.

4. Avoiding Financial Surprises

There’s nothing worse than encountering unexpected expenses during your trip.

On my 4 week solo European adventure I hadn’t properly considered or budgeted for transportation within the cities I was in or for the day trips I wanted to take.

Had I been using a budget calculator, I could have foreseen potential costs and been better prepared for them.

5. Maximizing Experiences

When I take the time to plan out my budget using the European Travel Budget calculator I remember to factor in the important sites and experiences in each city.

Whether it’s exploring iconic landmarks, indulging in local cuisine, or engaging in thrilling activities, this budget calculator helps you make the most of your journey.

6. Learning and Improvement

One of the best things about using a budget calculator allows you to learn more about your spending habits and patterns.

It’s kind of fun to analyze your expenses post-trip can help you identify areas where you can improve and optimize your budget for future journeys.

7. Encourages Responsible Spending

Another reason I love using this travel expense calculator is that it helps me to be mindful of the impact on the environment and local communities.

A budget calculator can also help you make eco-conscious decisions by setting aside funds for sustainable activities and responsible travel initiatives.

8. Empowerment and Confidence

And lastly, I like using a budget calculator travel tool that empowers you to take control of your financial journey . It feels good to map this stuff out! I take a lot of pride in knowing finances are well-organized for the exciting trip ahead!

Why It’s Crucial to Estimate Travel Expenses

Accurately estimating expenses is crucial when it comes to traveling! Think of a trip as an investment that requires thoughtful financial planning.

Underestimating expenses can lead to overspending while overestimating may leave you feeling unnecessarily restricted during your journey .

When I take charge and plan wisely it results in well-informed decisions about destinations, accommodations, and activities that align perfectly with my budget.

Moreover, it helps me avoid any unpleasant financial surprises during my trip, as I can anticipate potential expenses and be better prepared for them.

Best Books For Travel Budgeting

I would recommend in addition to using this FREE travel budget calculator to map out your expenses that you read these books budgeting:

• Guide to Budget and Travel Adventure
• Guide to Amazing Budget Travel
• First Class Travel on a Budget

Unlocking the Secrets to Seamless Travel with Effective Budget Planning

The key to a great vacation is all in how you plan and budget it! And if you are looking for some tips on how to budget, then look no further.

Just like a trusty compass, a well-thought-out budget acts as your guiding tool, ensuring a seamless journey filled with memorable adventures.

In this section, we’ll unveil the significance of budget planning and introduce some of the best budget planners to use along with this Free Budget Calculator Travel Tool.

Effective Planning With A Trip Budget Calculator

Picture this: You’re standing at the edge of an incredible adventure, ready to explore new horizons.

But, wait! Before you set off on this exciting journey, one essential task demands your attention – budget planning. It might not sound as thrilling as discovering new places, but effective budget planning is the secret sauce that transforms your travel dreams into reality.

Even when you are in the early staging of manifesting a trip , it is a good idea to establish a budget.

No more anxiety about draining your bank account! With a well-planned budget, you can effortlessly prioritize experiences that align perfectly with your interests and preferences.

Need a little help calling in the travel experience of your dreams? Using travel affirmations is a really powerful tool in preparing the mind for travel!

Avoiding Post-Trip Regrets:

I hate to admit this as a seasoned solo traveler , but I have often returned from a trip only to realize I overspent.

This is why I am writing this post on effective budget planning. I want you to eliminate post-trip financial regrets.

When you plan ahead and allocate funds wisely, you make informed decisions during your journey, ensuring you get the most out of every moment without feeling the burden of overspending.

Be Prepared for the Unexpected:

Travel often brings surprises – some delightful, while others may be unforeseen expenses.

Create a buffer for emergencies or unexpected costs in your budget. Then you can handle such situations without disrupting your travel plans.

I highly recommend this level of preparedness so that you can have peace of mind on your trip!

Best Budget Planners:

Now that we understand the significance of budget planning, let’s explore some of the best budget planners that cater to various travel styles and preferences:

• Travel Budget Planner : As an all-encompassing tool, the travel budget planner takes into account every aspect of your travel expenses. From transportation and accommodation to activities and food costs, this comprehensive planner ensures no cost is left unaccounted for, leaving you well-prepared for your journey.
• Trip Cost Planner : Tailored for shorter getaways and quick excursions, the trip cost planner is ideal for travelers with limited time frames. It focuses on creating a detailed budget specifically designed for shorter trips, making it easier to plan and manage expenses.

Money Saving Tips

Is your dream trip coming up a little more costly than you were expecting? If so, I have some basic money-saving tips for you to consider!

Accommodations & Lodging Expenses

Some of the big expenses on a trip are the hotel costs . Some of the best tips I have in regard to cutting expenses with accommodations is first to consider your location.

Most people try and stay somewhere outside the city center destination to save money.

First, consider public transportation. Will it be possible to use public transport to get around to the popular destinations on your list? Or will it cost you more money to travel to the ancient ruins for example?

Do you need to rent a car ? If you do, make extra sure that you find vacation rentals that have parking lots. Or need to factor in parking costs. A quick Google Search of the area is needed to see if parking in the area is free.

Factor in how much money you will save staying outside the city if you would need to increase your total budget for transit costs.

Adding up all these additional details is how you can find ways to SAVE money and not just end up spending more than if you stayed in the city center.

🚗 Find the Best Deals on a Rental Car with Discover Cars ! They have the least expensive options and the best customer service !

Cell Phone Plan or Sim Cards

Don’t forget to add your phone bill to the miscellaneous items of the budget calculator!

Your data usage can quickly add up and turn into one of those unexpected trip expenses I am talking about.

To save money I often purchase an E SIM Card for my phone. The other popular option is to up your coverage directly with your cell phone provider.

T Mobile has the best phone plans for places like Western & Eastern Europe.

Using Points From Credit Cards

I think the best part of planning the next trip is finding ways to utilize my credit card points to increase my vacation budget.

If I can save on hotel rooms , then I can use that amount of money on fun activities or at a local restaurant.

I primarily use my credit card points to purchase airline tickets or upgrade and fly business class for free !

Conclusion On Using A Budget Calculator Travel Tool

Budgeting for travel can sound like a real drag, but I promise you it can be fun!

With this helpful and FREE travel budget calculator you will be able to effectively plan the vacation of your dreams!

Related Resources

• 15 Traveling Planning Websites For The Savvy Traveler
• How to Fly Business For Less Than Economy
• 13 Must-Have Travel Apps For Solo Females
• How to Plan a Multi-City Trip to Europe
• Customized Travel Itineraries
• How to Travel For Free Not As An Influencer

Melissa Byron, a seasoned solo traveler since 2009, is the founder & visionary behind A Solo Woman Traveling. Drawing from her extensive personal experience globetrotting solo to over 40 countries, she has dedicated herself to a mission: crafting invaluable guides and itineraries for women who embark on solo adventures.

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How To Create A Solo Travel Budget (Free Calculator Included!)

By Jessie Festa & Dale P. This guide to creating a travel budget contains affiliate links to trusted partners!

Wondering how to create a solo travel budget ? Need some help understanding how to save money on travel and manage your trip expenses?

Then you’re in the right place!

For many people, the idea of traveling somewhere new is exciting. I mean, who wouldn’t love to be regularly flying off to new destinations?

The problem: travel can be extremely expensive; luckily, there are ways to set a travel budget and explore the world on the cheap while still having a memorable experience.

In this guide, we’ll lay out step by step how to create a budget for solo travel and stick with it. Additionally, we’ll share savvy tips for saving money on travel expenses like flights, hotels, tours, and more.

Quick tip: Flights are often the most expensive aspect of your trip. Luckily, there are platforms that can help you easily find flight deals and error fares like Going (formerly Scott’s Cheat Flights) and FareDrop . In terms of accommodation, search Hostelworld for hostels (many of which have private rooms), consider housesitting through Trusted Housesitter s , book a rental with a kitchen to save money on food through VRBO , or stay on free couches through Couchsurfing . And when it comes to car rentals, Discover Cars can help you quickly compare your options and save up to 70%! These are just a few of the many ways to save money on travel. Keep reading for more!

Table of Contents

Free Travel Budget Calculator

And that’s not all! To help you set and stick with your solo travel budget, I’ve created a handy dandy Free Travel Budget Calculator .

Enter your intended trip budget at the top and then your expenses in the following rows. The calculator will tally up your expenses and let you know if you’re over or under your budget – and by how much. You’ll also get a pie chart visually showing you where you’re spending the most money.

Note: if there is a category where you’re spending is $0, please put “0” in the line field. Otherwise, you may receive an error.

• If there is a category where you’re spending $0, please put “0” in the line field. Otherwise, you may receive an error.
• This calculator looks at your per day, per person costs (unless otherwise noted). If you’d prefer to calculate by the total costs for each category, click here .
• If you’d prefer to just calculate the trip costs for yourself, enter “1” for the Number of Travelers.
• Want more travel calculators? You can grab my full suite of trip planning calculators – plus other goodies – in my free Travel Resource Library !

Travel Budget Calculator

On that note, let's discuss how to set a solo travel budget and stick with it.

Is Solo Travel Expensive?

Solo travel doesn't have to be expensive. There are pros and cons when it comes to traveling solo and how it relates to your budget.

When you travel solo, you have complete control over your itinerary, which can help you save money. You can stay wherever you want, eat wherever you want, and do as many or as few tours and activities as you'd like.

How much you spend is totally in your control. This is one of the biggest benefits of solo travel .

However, there are some areas where you may end up spending more as a solo traveler. For example, you won't have anyone else to split the cost of hotels or taxis with. This is why it's crucial to understand how to set a solo travel budget and also save money on travel.

Considerations When Setting A Solo Travel Budget

Before you start to set a solo travel budget, there are several important factors to consider.

Determine available funds

Before you can plan your travel budget, you will need to determine the funds you actually have available for this trip. It's possible to travel solo to most destinations around the world - even notoriously pricy ones - as long as you're prepared and realistic.

If you don't have enough funds for your trip yet, determine the amount you'll spend and then set a timeline for saving money to achieve your goal.

You can use a website like BudgetYourTrip to get an idea of travel costs in destinations around the world.

Set realistic budget goals

Building off of the step above, you'll need to set realistic budget goals if you want to end up successfully sticking to your travel budget.

When setting budget goals, think about your own personal interests and travel style.

Are you a huge foodie who doesn't care as much about museums and tours? Is staying in a luxurious hotel room your top priority? Whatever the case is, you'll want to pinpoint your priorities and budget accordingly.

Budget categories

Dividing your travel expenses into categories can help you effectively budget for a trip. The main categories you'll want to budget for include:

• Transportation
• Travel Insurance
• Miscellaneous

You might want to build in a 10% buffer to your total travel budget to account for miscellaneous costs. It can also be a good idea to set aside some money for emergency expenditures. This will help you stay prepared and travel solo successfully .

How To Set A Solo Travel Budget

Are you ready to learn how to plan a travel budget? Here are seven simple steps to follow to budget solo travel effectively.

1. Plan your itinerary. In order to successfully budget for your trip, you'll want to plan your itinerary first so you can accurately budget your expenses. For short trips of a week or two, it should be easier to get specific. For long-term trips like a multi-month backpacking trip, you may have to plan more broadly.

2. Identify transportation costs. How much will your flights cost? How much will transportation on your trip cost? Will you be taking additional flights, trains, buses, boats, taxis, or public transportation? This should all be factored into your travel budget.

3. Estimate food costs. Food is another key part of your solo travel budget and one that is fairly consistent. Set a reasonable daily spending limit for food. You may decide to eat one meal out per day and cook the rest of your meals at your accommodation. Additionally, opting for street food meals can be a smart way to save money. Whatever you choose, work it into your budget.

4. Identify activity costs. If you're taking a short trip, you may plan to pre-book tours and activities. If so, be sure to add these to your budget. For longer trips, you might allot yourself a certain amount for activities and tours each day or each week.

5. Don't forget travel insurance. If you can't afford travel insurance, you can't afford to travel. Just check out these travel horror stories to see why it's so important. Covering your trip is more affordable than you might expect. Two of the best travel insurance providers are  SafetyWing and  World Nomads .

6. Add a buffer. After you've calculated your total travel budget, add a buffer for miscellaneous expenses. If your total budget is $1,500, you may want to add an additional $150 for spontaneous expenses that might crop up and another $150 as an "emergency fund" for your trip.

7. Commit to keeping yourself accountable. Finally, commit to checking in with your budget during your trip. It only takes a few minutes a day to track your expenses and make sure your expenditures are in line with what you planned for. You can use an app like Trabee Pocket to help with this.

Tips For Managing Travel Expenses

Planning your travel budget is one thing, but actually sticking to it is an entirely different matter!

Fortunately, there are travel budgeting tools you can use to track your travel expenses and ensure you are sticking to the travel budget you set.

Use a travel budgeting app

There are a number of ways you can manage your travel expenses. You can use a simple spreadsheet or a general budgeting app like Mint or You Need A Budget .

There are also (free!) travel budgeting apps like Trabee Pocket , Tripcoin , and TravelSpend that allow you to track your travel expenses across various categories.

Make budgeting a priority

You don't need to fixate on your budget the entire time you're traveling, but take a few minutes at the end of every day to tally your expenses and make sure you're on track.

Many travelers don't do this, which can lead to major overspending and regrets.

Choose the right payment methods

Before your trip, do some research on which payment methods you'll use. Some destinations are still very cash-dependent while others have gone almost totally cashless.

If you'll need cash, make sure you have an ATM card with no fees. For Americans, Charles Schwab's Investor Checking bank account allows you to withdraw money from any ATM in the world with no fees. Basically, any fees that are charged are reimbursed to you at the end of the month.

For credit cards and debit cards, you'll want to make sure your cards have no foreign transaction fees. While certain cards will have an annual fee - though this often comes with lots of travel perks - there are also credit cards that are $0 per year, like the SavorOne Rewards card from Capital One .

Choosing A Destination That Fits Your Travel Budget

If you're on a tight budget, choosing the right destination can help you stretch your money further. You can get more for your money in destinations like Southeast Asia, Eastern Europe, and Central America than you can in Western Europe, North America, or Oceania.

Other factors to consider when choosing a destination include:

Seasonality

Traveling in the off-season is a great way to save money on your trip. Prices for everything - accommodation, transportation, and tours - are generally lower outside of the peak tourist season. Plus, as an added bonus, you can enjoy many destinations with much lower crowds.

There are some tradeoffs to traveling during the off-season. For example, it might line up with the rainy season or colder weather; but for many travelers, it's worth it for the savings.

You can also travel in "shoulder season," the month or two before or after the high season. This usually gives you the best of both worlds: good weather but lower prices and lower crowds.

Type of trip

Do you want to city-hop across European capitals, explore jungles, volcanoes, and ancient ruins in Central America, or explore beaches and rice paddies in Southeast Asia?

Depending on the type of solo vacation you want to take, this can factor into where you go and how you budget for your one-person vacation accordingly.

Budget-friendly destinations

Here are some of the best destinations worldwide for cheap vacations to take alone where your dollar will stretch further:

• Southeast Asia: Indonesia , Thailand, Cambodia, Laos, Malaysia , Philippines, Vietnam
• Europe: Portugal , Romania, Poland, Czech Republic, Albania, Montenegro
• Latin America: Mexico , Guatemala, Nicaragua, Colombia, Ecuador, Peru

This is by no means an all-inclusive list, but it gives you an idea of countries where you can have inexpensive solo vacations for as little as $50 a day - or less, if you take the following money-saving tips to heart.

How To Save Money On Flights

Flights can be one of the biggest expenses for any solo trip, especially if you are traveling internationally. Here are some ways to take inexpensive solo trips by saving money on flights.

Travel during the off-season

Traveling during the off-season is a great way to save money on all aspects of your trip, especially airfare. For example, flights to Europe from the U.S. may be as much as 50% lower during the months of October and November compared to the peak summer months of June through August.

Be flexible with your travel dates

If you can be flexible with your travel dates, you can score some great deals on airfare. Leaving or returning a day or two earlier or later may result in massive fare differences.

Of course, sometimes this means traveling at strange times (like leaving mid-week instead of at the start of a weekend) but if you can afford to be flexible, it can pay off massively.

In terms of how to tell which days are the cheapest for travel, Google Flights has a visual calendar with prices showing for each day.

Set fare alerts

Can't be flexible with your travel dates? Set a fare alert on Google Flights and be notified when airfare drops for your specific dates. This can help you score seriously cheap flights.

It's a good idea to set a fare alert well ahead of time and keep in mind that the "sweet spot" for booking a domestic flight is 60 days in advance and 120 days in advance for an international flight.

Get notified about deals & error fares

If you want to find the absolute cheapest airfare possible and find error fare deals , there are a few tools you can use.

The first is Twitter . You can set alerts to receive Tweets from fare deal accounts like @TheFlightDeal and @SecretFlying.

There are also services like Going (formerly Scott's Cheat Flights) and FareDrop that send deals and error fares right to your inbox to help you save hundreds of dollars on flights.

For the above strategies, just make sure to book your flight right away, as typically the deals showcased change quickly. You might even make finding a great flight deal your method for choosing your destination!

How To Save Money On Accommodation

Your solo travel costs can skyrocket quickly depending on where you stay. Luckily, there are several ways to save money on solo travel accommodation.

Stay in hostels

One of the best ways to save money on accommodation for single travelers is by staying in hostels. Staying in a hotel can get very expensive if you don't have anyone to share the cost with.

Hostels are an affordable alternative for inexpensive solo travel. And if you think that hostels are only for young people or for backpackers on an extreme budget, think again!

Many hostels cater to travelers of all ages. There are also tons of hostels that resemble boutique hotels more than your typical hostel, and many have private rooms that are comparable to hotel rooms.

Of course, for travelers on a tight budget, staying in a shared hostel dorm room is one of the best ways to save money on your accommodation costs.

You can search a site like Hostelworld to compare the hostel options in your preferred destination. Once you search by location, date, and number of travelers, you'll be given a list of properties and will be able to see right away the rate as well as if private rooms are available.

Use travel credits & points

If you prefer to stay in hotels, using travel credit cards and redeeming points can be a great way to save money or even get a totally free hotel stay.

Many hotel chains like Marriott and Hilton offer co-branded credit cards with sign-up bonuses that can be earned after spending a certain amount of money within a few months of opening the card. These points bonuses can typically be redeemed for several free hotel nights.

You can also use a general travel rewards credit card, like the Chase Sapphire Preferred Card , which offers similar sign-up bonuses in points that can be redeemed towards hotel stays and other travel. Just note that this card does have an annual fee, though it also comes with many travel perks.

Try housesitting or couchsurfing

If you're looking for a way to travel very cheaply and spend zero dollars on accommodation costs, housesitting and couchsurfing are two unconventional methods of travel to consider.

Housesitting involves staying in someone else's home and taking care of their pets and house while they are away. You may be responsible for feeding, walking, and playing with pets, watering the plants, keeping the house tidy, and generally taking care of the place while the owners are away.

Trusted Housesitter s is the best platform for finding housesitting jobs. It's a great way to live like a local in a new destination and save money on accommodation.

Another option is couchsurfing. The official Couchsurfing website will help you connect with locals who offer free accommodation to travelers around the world.

As the name suggests, you might be sleeping on someone's couch, so it's not the most glamorous way to travel. But it's great for budget travelers who want to connect with locals.

Important solo travel safety tip : solo female travelers should be especially careful when couchsurfing. It can be a good idea to only stay with female hosts or to vet potential hosts by making sure they have positive reviews from other couch surfers first.

Speaking of safety, you might also consider packing a few travel safety essentials - like a She’s Birdie Personal Safety Alarm , which is TSA-approved and can help scare away potential attackers. Other recommendations include Clever Travel Companion Pickpocket-Proof Garments and Speakeasy Travel Supply Hidden Pocket Scarves .

How To Save Money On Food While Traveling Solo

Food is an area of your budget that can get eaten up quickly (no pun intended) while traveling if you aren't careful. Here are some ways to save on food while traveling solo without sacrificing the fun of eating out and discovering new cuisines:

Go grocery shopping

One of the best hacks for inexpensive solo travel is grocery shopping and cooking meals on your own while you travel. Most hostels offer communal kitchens, or you can be sure to choose an Airbnb , VRBO , or other rental that includes a kitchen.

You don't have to cook every meal on your own, but even just cooking for yourself a few times on your vacation instead of eating out can save you a lot of money.

Choose accommodation with free breakfast

Many hostels and budget hotels offer free breakfast every morning, which can be a great way to save money on one meal per day.

Before booking your accommodation, check to see which places offer free breakfast. You can fill up on a complimentary buffet breakfast in the morning, and then you'll only have to spend money on lunch and dinner.

Eat where locals eat

Finally, eating where locals eat is one of the best ways to save money on food while you travel. Restaurants that cater to tourists are often overpriced and don't even serve the best food.

However, if you get off the main tourist trail and seek out the spots where locals eat, you'll most likely find much better prices — and much better food.

Do some research before you travel to find the best local eats in the destinations you're visiting, or better yet, ask a local for recommendations once you arrive.

How To Save Money On Activities While Traveling Solo

Many activities, such as visiting museums and tourist attractions, will not cost you anything extra as a solo traveler. However, some activities do run the risk of incurring the dreaded "single supplement."

Here are some tips for cheap solo travel activities:

Research free activities

Free activities are one of the best strategies for how to travel solo on a budget. You'd be surprised at how many free things to do there are in most destinations.

For example, in New York City, there are dozens of free viewpoints you can visit rather than paying $50+ to go to an expensive observation deck.

Moreover, activities like solo beach days and solo hikes are almost always free.

Consider purchasing a city pass

Many popular destinations around the world, particularly major cities with lots of tourist attractions, offer city passes.

These passes give you access to many popular museums, attractions, and experiences for a discounted price compared to buying entry to each activity individually. They can also help make solo travel more fun by introducing you to a destination's top attractions.

If you're someone who enjoys visiting many museums and tourist attractions, this can be an excellent way to save money on activities. You can check the official CityPASS website to see if your destination is listed, though keep in mind there are other brands of discount passes too.

Avoid solo travel supplements

Unfortunately, some activities carry a single supplement for solo travelers. For example, cruises and tours that are priced based on double occupancy often carry a supplement for solo travelers.

When it comes to group tours, you can often agree to share a twin room with another traveler to avoid having to pay for a single supplement.

On cruises, you can sometimes find solo travel deals where the single supplement is waived or greatly reduced.

How To Save Money On Transport While Traveling Solo

When it comes to how to travel solo for cheap, managing your transportation costs is another important element for sticking to your solo travel budget.

One of the drawbacks of traveling solo is that you don't have anyone to split transportation costs with. When traveling with others, you can save money by splitting a taxi, Uber, or rental car.

But on your own, here are some ways to save money:

Use public transportation

Public transportation is one of the best ways to save money while traveling solo. Taking a taxi or an Uber all the time can quickly get pricy, but public transportation typically costs a couple of dollars or less per ride.

If you'll be staying in a destination for an extended amount of time (more than a few days) and plan to use public transportation frequently, it may also be worth purchasing a weekly transit pass compared to buying single tickets.

Research transportation in advance

Another way to save money on transport is to come prepared to your destination. Research the best ways to get around in advance of your trip.

In some places, renting a car may actually work out to be a cheaper option, while in other places, you might save money using rideshare services, buses, or trains.

Stay in a central location

Staying in a central location is a great way to save money on transportation in your destination. You may find a hostel that's $10 cheaper outside the city center, but what if you have to spend $10 a day on transportation costs to get where you want to go?

Choosing a central location means that you'll be able to walk around more and spend less money on transport costs. You may also want to choose accommodation that's close to the train station or public transportation in your destination.

Where To Get Travel Insurance

Before heading off on a solo trip, it's wise to get travel insurance.

One of the  best travel medical insurance for travelers  is SafetyWing as they’ve got a large network and offer both short-term and long-term coverage — including coverage if you’re traveling for months as well as limited coverage in your home country.

Additionally, SafetyWing is budget-friendly and offers $250,000 worth of coverage with just one low overall deductible of $250.

Click here to price out travel insurance for your trip in just a few clicks .

Post-Travel Budget Review

After your trip, it's a smart idea to do a post-travel budget review. Find an hour to sit down and closely review how much you spent during your travels.

Take a look at your initial budget and your actual expenditures and see how well you stuck to what you planned to spend. Were there any areas where you went over budget?

Maybe you spent way more money than you expected on going out to eat, or maybe you ended up splurging on Ubers or taxis more often than you took public transportation.

Identify these areas of improvement for future travel planning purposes, but don't get down on yourself too much for a little bit of overspending. Money will come and go, but the memories from your travels will last a lifetime, and that is priceless!

Planning A Solo Trip On A Budget: Final Thoughts

Hopefully, these tips can help you confidently travel the world solo on a budget! While travel can certainly be expensive, it's also possible to book travel at a reasonable price.

It's helpful to look at the biggest costs to determine how you can get them down, like traveling outside of peak season, such as during shoulder season, and making use of strategies to keep big ticket items like flights and hotels low.

Using the steps above, you'll be able to create a travel budget for your solo vacation - and stick with it!

What would you add to this guide on how to create a solo travel budget?

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Budget Calculator

This budget calculator is mainly for the planning of personal finance. All the income items are before tax values.

Related Debt Ratio Calculator | Credit Card Calculator | College Cost Calculator

What is a Budget?

A budget is an estimate and planning of income and expenditure, and commonly refers to a methodical plan to spend money a certain way.

Generally, budgets are created to reach certain financial goals, such as paying off several credit cards, reaching a certain savings goal, or getting income and expenses back on track. There are many different reasons why people create budgets, and even more ways to go about doing so. While some people may prefer our budget calculator or our free budget template , others may prefer different methods. Modern technology has paved the way for many different budgeting software and apps. They all have their pros and cons, but the one that works best is the one that budgeteers will bother sticking with as best as they can.

How to Budget

Budgeting can generally be summed up by two things: living within your means and planning for the future. Successful budgeting usually involves having a detailed personal budget and adhering to it.

Living Within Your Means

Millennia-old religious teachings, countless online resources, and thousands of financial advisors over time have echoed the principle of living within your means. As simple as it may seem, many struggle to implement it successfully in their lives, as the statistic that eight out of ten Americans are in debt, shows. The reason why people are not able to adhere to the principle is generally due to reasons such as:

• Spending more than their income allows —The biggest financial blunder people can make is simply spending more than they earn, which over the long-run snowballs into more and more debt.
• Trying too hard to keep up with the Joneses —In consumerist societies, conspicuous consumption, defined as the spending of money on, and the acquisition of, luxury goods and services to publicly display economic power, is common.
• Overly relying on credit —This borrowed money allows people to live beyond their means temporarily. However, if borrowers are unable to pay back the borrowed money on time, they will probably find themselves in a sticky financial situation.
• Lacking knowledge —Not everyone is expected to be an expert on personal finance, and it is very possible that misinformation or lack of awareness can lead to people living outside of their means. As a result, it can be helpful to learn more about personal finance.

Planning for the Future

There is a reason why entire departments exist within many corporations for the sole purpose of budgeting and forecasting, as budgeting and forecasting are very important factors when trying to achieve certain financial goals. This concept applies to individuals as well, as it can be hard to achieve personal financial goals successfully without first planning for them. Proper planning can help predict future financial standing according to best estimate forecasts of income and expenses. Proper planning can also help with:

• Mitigating sudden misfortunes (everyone encounters expected and unexpected life events)
• Loading up on emergency funds
• Weather heavy-debt seasons
• Getting ready for the purchase of a new house, car, or other major purchase
• Properly managing investments
• Preparing for retirement, children, or education
• Purchasing appropriate insurance plans

A personal budget can help people live within their means and plan for the future. The Budget Calculator evaluates the components of a personal budget and highlights which specific areas need improvement.

Budget Template

We have created a free, basic, budget template for people who want to start budgeting their personal finances on a month-to-month basis. While it is not the most feature-packed budgeting tool in the world, it was created as a way for people to get motivated and started on their budgeting goals, then eventually move onto more intricate budget-planning tools. It can also serve as a supplementary tool to annualize net income as calculated based off of our Budget Calculator. There is also a computation for annualized expense-to-income ratio. Use our Budget Calculator every month, then update the figures in a saved version of our budget template. The annual net income will update accordingly. Please click here to download our free budget template.

Most budgeteers' main source of income will come from their full-time or part-time job in the form of salaries or wages. The second largest source of income tends to come from investments and their capital gains, and there are various other methods of receiving additional income.

Obviously, anyone would most likely want a higher income. Aside from more consumption, conspicuous or otherwise, a higher income allows for more flexibility when it comes to expenses; a month of extreme spending can be quickly rectified by a high enough income. While achieving a higher income is easier said than done, it is generally accomplished through several main avenues: looking for a new job, attaining higher education such as additional degrees or certifications, the development of new skills, or networking with the right people. For some budgeteers, a higher income can come through investment income, though this method only tends to work in the long term. In some situations, a second job may be necessary to make ends meet.

A main source of income for most Americans in retirement is Social Security. It is important to remember that Social Security payments can only be received as early as age 62. Please visit any of the calculators below for more specific information or calculations.

• Take-Home-Paycheck Calculator
• Income Tax Calculator
• Salary Calculator
• Social Security Calculator

Housing & Utilities

Most budgeteers will normally have rent or mortgage costs as the bulk of their monthly housing expenses. A general rule of thumb says housing costs should be no more than 30% of monthly gross income, give or take. Any budgeteer who finds that their housing costs are significantly more may find it worthwhile to consider more cost-effective approaches to housing. This may include refinancing to a lower rate, relocating to a more budget-friendly location, or downsizing to a smaller home if possible. They may also consider renting out an extra room if they have one for rental income. Smaller ways to save on housing costs include transitioning to new, smart technologies that generally tend to be more energy-efficient, such as programmable thermostats, energy-efficient lightbulbs, and the installation of solar panels. Please visit any of the calculators below for more specific information or calculations.

• House Affordability Calculator
• Mortgage Calculator
• Rent Calculator

Transportation

For most budgeteers, the bulk of transportation expenses will probably be their car payment, or auto loan. There is generally much leeway to reduce this expense, as retail prices of different cars vary greatly. Choosing to purchase a car within a specific price range will go a long way towards meeting the financial goals of a budget. As a general rule of thumb, monthly car payments should amount to less than 10% of gross income. Other transportation expenses generally include fuel, maintenance, and insurance. There are a number of different ways to try and cut down on transportation expenses. For one, depending on the region, car ownership is not an absolute necessity, and there are alternative transportation options. If possible, use public transport, carpool, bike, or walk instead. Not only can these help a person meet their budget, but they are also eco-friendly, and some can provide exercise. Maybe consider owning a more fuel-efficient vehicle. If car ownership is a must, routine upkeep can help maintain the car in optimum condition. This may include properly inflating tires, performing oil changes, tuning the engine. Also, try to stay educated on traffic laws and operate motor vehicles in a legal manner; not only will traffic violations result in fines, but they can also cause a hike in auto insurance premiums. Car owners who find that they are paying excessively for fuel may want to change driving habits such as aggressive acceleration. As a rule of thumb, try to keep total transportation costs below 15% of income. Please visit any of the calculators below for more specific information or calculations.

• Auto Loan Calculator
• Cash Back or Low Interest Calculator
• Auto Lease Calculator
• Gas Mileage Calculator
• Fuel Cost Calculator

Other Debt & Loan Payments

Credit cards carry negative connotations regarding budgeting because people tend to use them to spend more than they can afford. It is important to remember that credit cards are not an endless resource, and that they must be repaid in a timely manner to avoid large interest payments.

Although credit cards can potentially exacerbate debt, when utilized under strict control, credit cards can be incorporated into a budget as a way to save on purchases and even build good credit. However, particularly for those who have constrained budgets, it is important to use credit cards sparingly to avoid large interest payments that could strain budgets even further. Please visit any of the calculators below for more specific information or calculations.

It is important to make sure not to double dip when accounting for student loans, personal loans, or credit card debt in the budget. For instance, do not add $20 to both Credit Card and Meals Out for the same dinner. This applies to student loans and tuition and credit card balances being carried month-to-month.

• Credit Card Calculator
• Credit Cards Payoff Calculator
• Debt-to-Income Ratio Calculator
• Debt Payoff Calculator

Living Expenses

While the expenses associated with daily living may seem insignificant when compared to the other categories, they can discreetly add up. A category that has lots of wiggle room in improving a budget is "Meals Out." Cooking at home is generally significantly more cost-efficient than eating out, and depending on how often a person has meals out, eating in more often can potentially reduce living expenses by a large amount.

"Food" and "Meals Out" are part of the expenses breakdown in the results. In general, this combined expense should be less than 15% of income.

In the US, healthcare costs about $10,000 a year on average for each person. Unfortunately, this is an expense that generally has little pliability in a budget. However, there are some strategies that can be used to potentially reduce healthcare costs:

• Don't smoke, eat healthier, get plenty of sleep, and exercise regularly.
• Use in-network doctors, hospitals, and facilities.
• Regularly re-assess health insurance needs.
• Use tax-advantaged accounts that are created for healthcare spending. In the U.S., this is called a Health Savings Account (HSA).
• Buy generic drugs when possible.
• Seniors can try to rearrange their environment in order to reduce the risks of falling, since falling is one of the most common events that lead to a large healthcare bill for the elderly.

Children & Education

It is often stated that an investment in education is the best investment a person can make. Statistics show a high correlation between higher degrees of education and higher income levels. This category probably has less to do with scaling back, but more to do with planning for it correctly. Keep in mind that in most developed countries, student aid from the government tends to be very accessible so that no matter a person's financial standing, they have the ability to attain higher education. Budgeteers struggling to repay multiple high-interest student loans may consider consolidating them.

Having a child is generally one of the costliest (and time-consuming) expenses for any adult, so it is important to plan for this financially. Please visit any of the calculators below for more specific information or calculations.

• Student Loan Calculator
• College Cost Calculator

Savings and Investments

In healthy budgets, excess money tends to be allocated for the future, which includes savings or investments for retirement, emergency funds, or college savings. It is important for budgeteers not to overlook the importance of an emergency fund; having one can make or break being in debt or not. If savings and investments are managed well, it is not uncommon to see average income earners retire at earlier ages. As a general rule of thumb, it is recommended for the total of this section to be 15% or higher. Please visit any of the calculators below for more specific information or calculations.

• 401K Calculator
• Roth IRA Calculator
• IRA Calculator
• Retirement Calculator
• Pension Calculator
• Savings Calculator

Miscellaneous Expenses

This section of expenses is generally the most pliable in a personal budget relative to other categories such as housing or savings. It includes a number of expenses that could fall within the blurred lines of "needs" and "wants." This leaves a lot of room for personal discretion, which can be a good or bad thing. Bad in that over-expenditure can wreck a budget, but good in that moderation can ease stress and potentially heal a budget. Important decisions regarding whether or not to take an expensive trip to the Maldives, whether to attend a Super Bowl in town, or whether it's worth spending large amounts on an art collection go a long way towards achieving financial goals. Lavish vacations, loving pets, and fulfilling hobbies are all great ways to invest in oneself, only if financially feasible. For anyone looking to fix a faltering budget, this section should be the first area to evaluate.

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• Travel budget

Trip Budget Calculator: Plan Your Dream Vacation Within Your Budget

• 1 Calculate Your Trip Expenses with Ease
• 2 How Does a Trip Budget Calculator Work?
• 3.1 1. Avoid Overspending
• 3.2 2. Plan Your Savings
• 3.3 3. Compare Different Scenarios
• 3.4 4. Make Informed Decisions
• 4 Final Thoughts

Calculate Your Trip Expenses with Ease

Planning a trip can be exciting, but it can also be overwhelming when it comes to budgeting. However, with the help of a trip budget calculator, you can easily estimate your expenses and plan your dream vacation within your budget.

Whether you are planning a solo adventure, a romantic getaway, or a family vacation, a trip budget calculator is a valuable tool that can assist you in making informed decisions about your spending.

How Does a Trip Budget Calculator Work?

A trip budget calculator takes into account various factors such as accommodation, transportation, meals, activities, and miscellaneous expenses. By inputting your estimated costs for each category, the calculator will provide you with an overall estimation of your trip expenses.

Additionally, some trip budget calculators allow you to customize your expenses based on your travel preferences. For example, if you prefer staying in luxury hotels or dining at high-end restaurants, the calculator can adjust your estimated costs accordingly.

Benefits of Using a Trip Budget Calculator

1. avoid overspending.

One of the main advantages of using a trip budget calculator is that it helps you avoid overspending. By having a clear estimation of your expenses, you can make informed decisions about where to splurge and where to save.

2. Plan Your Savings

Knowing the estimated cost of your trip allows you to plan your savings accordingly. You can set a realistic savings goal and work towards it, ensuring that you have enough funds to enjoy your vacation without any financial stress.

3. Compare Different Scenarios

A trip budget calculator allows you to compare different scenarios and make adjustments based on your priorities. For example, you can explore the costs of different accommodation options or transportation methods to find the best fit for your budget.

4. Make Informed Decisions

With the help of a trip budget calculator, you can make informed decisions about your itinerary. You can allocate your budget to activities and experiences that matter most to you, ensuring a memorable and enjoyable trip.

Final Thoughts

A trip budget calculator is a valuable tool that can help you plan your dream vacation within your budget. By estimating your expenses and making informed decisions, you can have a stress-free and financially conscious trip. So, before you embark on your next adventure, make sure to use a trip budget calculator to ensure a smooth and enjoyable journey.

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How a Vacation Budget Calculator Can Transform Your Travel Plans

Vacation time is an opportunity to unwind and create unforgettable memories. However, it’s also an investment, requiring thoughtful financial planning. You’ve worked hard for your money, and it’s only right that you get the best value for your budget.

Shockingly (or maybe not so) the average cost of a summer vacation for a family of four is over $5,000. Meanwhile, a romantic week-long honeymoon might set you back over $7,000. These numbers highlight the importance of savvy financial planning to make your dream vacation a reality without straining your wallet.

But Don’t Sacrifice!

Naturally, most of our clients try to just “go without” to save up for these moments, but this strategy feels more like sacrifice than savvy saving. What if I told you there’s a joyful and straightforward method to saving that actually has you looking forward to it?

Traditionally, saving for a vacation might mean cutting back on daily luxuries, which often leads to feeling deprived. But what if there was a tool that made saving both fun and straightforward, transforming it into an activity you look forward to?

The Magic of a Vacation Budget Calculator

Creating a simple vacation budget calculator involves setting up a basic formula that takes into account your vacation cost, current savings, and the time frame you have to save. This tool can give you a monthly savings goal to help you accumulate the necessary funds for your vacation.

It might seem simple…but I promise this is the beginning of your next romantic getaway!

Vacation Budget Calculator

Armed with a vacation budget calculator, saving for your next trip becomes an engaging and stress-free experience. Now, let's dive into some creative ways to boost your vacation fund, with the help of this indispensable tool.

Below are 5 innovative strategies to boost your vacation fund without feeling the pinch.

1. the acorns app.

Imagine every purchase you make rounding up to the nearest dollar, with the difference whisked away into a diversified investment portfolio through the Acorns app. With options for recurring deposits, your vacation fund could be growing in the background with as little as $5. I use it all the time! I call it my vacation fund!

2. Go for a Picnic Over Dining Out

The average dinner outing can quickly add up. Instead, why not plan a picnic? It's an affordable alternative that doesn't skimp on enjoyment. Packing a simple yet delightful meal and savoring it outdoors can save significantly, allowing those savings to flow straight into your vacation fund.

3. Garage Sale or Marketplace Sales

While setting up may seem daunting, selling items you no longer need can be incredibly rewarding. Platforms like Facebook Marketplace not only help declutter your space but also add a nice sum to your vacation savings. Remember, your old items are treasures waiting to be discovered by someone else.

4. Turn Unwanted Gift Cards into Cash

Unspent gift cards gathering dust? Websites like Raise.com and Cardcash.com offer a fantastic solution, converting these cards into cash for your vacation fund. It's a simple, effective way to ensure every dollar is directed towards creating unforgettable memories.

5. Prefer Cash Over Credit

Using cash instead of credit cards helps keep spending in check, fostering a more mindful approach to finance. For those apprehensive about carrying cash, a dedicated debit card for savings could serve as a modern alternative, ensuring you spend only what's earmarked for daily expenses.

Keep your travel dreams alive and kicking by surrounding yourself with reminders of your goals. From travel magazines to vibrant pictures of your dream destinations, let these visuals inspire and keep you focused on the prize.

Let's Implement the Vacation Budget Calculator

Saving more doesn't have to dim the sparkle of anticipation for your next adventure. Infuse a bit of creativity into your savings strategy.

At Teach Travel Discover, we deeply value the effort and dedication you put into saving for your travels. By teaming up with us from the get-go, you're not just preparing early; you're ensuring that you're getting the utmost value for every dollar spent. Let's do this!

The post How a Vacation Budget Calculator Can Transform Your Travel Plans appeared first on Teach Travel Discover .

Bucket list travel on a budget: Expert tips for airfare, loyalty programs, credit card perks and more

Many travelers have their sights set on summer getaways , but with everything from baggage fees to fuel costs impacting the price of a ticket, "Good Morning America" is asking travel experts to share tips for booking bucket list destinations on a budget and finding savings along the way.

Travel expert Nicky Kelvin, senior director of content for The Points Guy, offered his tips for affordable travel techniques.

Where to find the best flight deals

Kelvin encourages travelers to utilize Google Flights and other free price-tracking tools to compare fare prices and snag the best deal.

He also suggests using both the calendar and map features within Google Flights to see which airports, dates and destinations how the lowest fare.

From the Google Flights homepage on a computer, click "explore destinations" and select a departure city without adding a destination. Then zoom out on the map to see the best prices for destinations all over the world.

Get the most out of free travel loyalty programs

Travelers should be earning points for anything and everything that they are buying or booking from airline and hotels to car rentals, Kelvin said.

In addition to the points that can can help travelers earn free flights and hotel stays, Kelvin said to look for extra perks just for joining.

Hyatt rewards, for example, offers all guests free breakfast.

For Thrifty Car Rental and Dollar Car Rental, he said you can add your spouse or domestic partner as an additional driver for free.

Loyalty programs are great for airlines too. JetBlue, for example, allows enrolled customers -- even if they don't have enough points for a flight -- to use points for discounts. Plus, with any airline, as you accumulate points to earn status, you can get free seating upgrades.

Travel credit cards with cash back perks

Along with earning points, travel credit cards give you protection for your trip like insurance to help with lost or damaged baggage and trip cancellation protection

Chase debuts new airport lounge: Gourmet menus, sleek interiors, free facials redefine hospitality for airport travel

As for credit cards, The Points Guy team suggests the Capital One Venture Rewards credit card as an all-around pick -- you get 75,000 miles after meeting your minimum spend in the first three months. Which Kelvin said is a value of over $1,300.

If you're looking to earn the most miles, he said look to the Chase Sapphire Preferred Card.

"You'll earn the most points on all your purchases with this one," he said.

Finally, if you want a credit card with no fee, Kelvin suggested the Bilt Mastercard, which he said is particularly great for renters because you can earn points on what's likely someone's biggest expense.

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Save money on international phone plans for summer trips

If someone's trip is taking them out of the country, using a cell phone internationally can cost $10 to 15 per day. For a family of four, that's more than $400 for a week.

If your phones support eSIM, Kelvin suggested purchasing a data plan for your destination through an app such as Airalo, Truphone or GigSky.

For example, one of Airalo's global SIM plans costs $9 for one week, which could save a family close to $350 dollars, depending on their existing international coverage.

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Budget Travel: The Best Ways To Spend $20 on Vacation

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Vacations are a lot of fun, but it’s easy to spend too much money , leaving a costly trail in the wake of your good time. However, there are a surprising number of fun things to do, eat and see for as little as $20 or less, if you know how to find them.

“A lot of times it’s the simple, under-the-radar experiences that create the most meaningful memories anyway,” according to Anjali Chawla, a family travel blogger and founder of Travel Melodies .

“The best part about traveling cheap is it forces you to engage with communities in an authentic way,” she said. “It’s not about flashy tourist attractions, but slowing down to discover little cafes, street artists and out-of-the-way viewpoints that give you a true insider experience.”

She and other travel experts explain the best ways to spend $20 on vacation .

Food should be your first choice if you only have $20 to spare, according toDavid Ciccarelli, the CEO and founder of the vacation rental platform Lake .  

“Choose a popular food truck, market vendor or local eatery, which tends to be much cheaper and more authentic than tourist-oriented restaurants,” he urged.

Local Markets

On the topic of food, Elaine Warren, a travel expert, founder and CEO of The Family Cruise Companion , suggested checking out local markets for snacks with your $20.

“Cruise food is fine but you miss out seeing how locals eat. Markets have goodies like filled pastries in the Caribbean or meat on sticks in Asia. Try the real local foods — it’s interesting and not too pricey. Speaking of tastes, another low-cost option is stopping at coffee shops or cafes…You can get specialty drinks and feel the local vibe.”

Then, once your belly is full, go check out museums with free admission, Ciccarelli said. “Spend the cash on public transit; you may even have some left to spare at the end of a culture-filled day. Or, go on a walking tour and check out local art, sculptures, and architecture, stopping for a snack along the way.”

Outdoor Experiences

For any vacationer with $20 to spend, Jonas Zook Jr., an Airbnb host with Sweden Valley Cabins , recommended investing in memorable outdoor experiences. 

“For instance, Cherry Springs State Park offers exceptional stargazing, often for free or a nominal park entry fee. This aligns perfectly with spending little but gaining a lot — connecting with nature and enjoying spectacular celestial views,” he said.

Similarly, in the surrounding Susquehannock State Forest near him, there are numerous hiking trails, which are accessible at no cost except perhaps for parking.

“These trails not only offer physical activity but also expose travelers to breathtaking natural scenery and wildlife, maximizing the value gained from an inexpensive or free activity. Moreover, the mental and physical benefits of spending time in nature provide a substantial return on a minimal investment,” Zook Jr. said.

Local Community and Cultural Events

Zook Jr. also suggested that if you’re interested in cultural experiences, “Local community events such as small-town festivals or markets can be incredibly enriching without denting your wallet.” 

These events often feature local crafts, foods and sometimes free performances, offering a taste of local life and community spirit. 

“My experience hosting near such a vibrant outdoor and community-focused area has shown me that the most rewarding travel experiences often come from engaging authentically with the area’s natural and social offerings, all while on a budget.”

While lodging can be one of the bigger expenses when traveling, if you’re traveling outside of the U.S., many countries offer hostels, essentially shared lodgings where you might sleep in a dorm-like setting, for very little, according to Alexandra Dubakova, travel expert and chief marketing officer of FreeTour.com .

“It depends on where you are going for vacation. For example, if you were visiting Bolivia, you could spend $20 on a hostel, $9 on a tasty meal … and spend the remaining in a minibus across town,” she said.

Likewise, in Ho Chi Minh City, Vietnam, you can get accommodation in a hostel starting from $5, street food at $1 or at a hotel for $5, and you can visit museums, markets, etc. she explained. 

Many cities offer these kinds of deals on hostels.

Public Transit Day Passes 

Another tip Chawla recommended is taking advantage of public transit day passes. 

“Whether it’s the buses, trains or subway, most big cities have passes available for short-term tourists that allow unlimited rides in one day. For around the $20 mark or less, you open up so many affordable sightseeing possibilities,” she said.

She shared that this is how her family has been able to cover twice as much ground in a day in big cities like Madrid, Tokyo and Chicago.

Museums, Landmarks and Monuments

Additionally, you’d be surprised how much free or inexpensive culture you can soak up in a place too, Chawla said. 

Many museums, landmarks and monuments have discounted or even free admission days that only require a bit of online research beforehand, she explained. 

“Just $10 towards the entrance fee means my kids get an education while we’re traveling. It’s amazing what you learn wandering around taking in the exhibits and history. I always leave feeling like I understand a destination so much better after a few hours in its cultural attractions.”

Don’t Forget What’s Free

You can also save your $20 by taking advantage of some free options, according to Rob Burley, a travel tour operator expert and the founder of GP Traveller . 

He recommended free “culture days” at local museums, zoos and attractions.

“During my last trip to Washington D.C., I was amazed at how much history and education I absorbed across multiple Smithsonian museums — all without spending a dime. Another top recommendation is free walking tours. Not only do you see the sites, but you gain priceless insider perspectives from local volunteers who share their city with pride.”

He also urged people not to forget about libraries.

“On rainy days they’ve entertained me for hours with movies, books and more. And in summer, public parks worldwide put on wonderful free concerts and shows perfect for taking in while meeting locals,” Burley said.

Town squares or parks sometimes have live music from street performers, Warren added.

“Even historical sites may have outside areas open to all, so you can see nice buildings or ruins at no cost. And don’t forget cheap postcards to send friends pictures from your trip,” she concluded.

Whether it’s food, transit or culture, there are many ways to spend a day traveling on just $20 if you get a bit creative.

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2024 Federal Budget analysis

On April 16, 2024, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the government’s budget. The budget:

• increases the capital gains inclusion rate from 1/2 to 2/3, effective June 25, 2024 (up to $250,000 of annual gains for individuals will continue to benefit from the 1/2 inclusion rate)
• raises the lifetime capital gains exemption to $1.25 million and introduces a new 1/3 inclusion rate for up to $2 million of certain capital gains realized by entrepreneurs
• confirms previously announced alternative minimum tax proposals effective January 1, 2024, but softens the impact of these proposals on charitable donations
• provides design and implementation details for the clean electricity investment tax credit
• introduces accelerated capital cost allowance (CCA) for, and relief from interest deductibility limitations for debt incurred to fund the construction of, certain purpose-built rental housing
• provides immediate expensing for the cost of certain patents and computer equipment and software
• gives the Canada Revenue Agency (CRA) additional information gathering powers

This Tax Insights discusses these and other tax initiatives proposed in the budget.

Tax measures

Capital gains inclusion rate.

• Lifetime Capital Gains Exemption

Canadian Entrepreneurs’ Incentive

• Alternative Minimum Tax

Employee Ownership Trust Tax Exemption

Volunteer firefighters tax credit and search and rescue volunteers tax credit, mineral exploration tax credit for flow-through share investors.

• Canada Child Benefit

Disability Supports Deduction

Charities and qualified donees.

• Home Buyers’ Plan

Qualified Investments for Registered Plans

Deduction for tradespeople’s travel expenses, indigenous child and family services settlement, clean electricity investment tax credit, ev supply chain investment tax credit, clean technology manufacturing investment tax credit.

• Accelerated Capital Cost Allowance

Interest Deductions and Purpose-Built Rental Housing

Taxing vacant lands to incentivize construction, confronting the financialization of housing, halal mortgages, non-compliance with information requests, synthetic equity arrangements, mutual fund corporations, canada carbon rebate for small business, avoidance of tax debts, reportable and notifiable transactions penalty, manipulation of bankrupt status.

• Scientific Research and Experimental Development

International

Crypto-asset reporting, withholding for non-resident service providers, international tax reform.

• Extending GST Relief to Student Residences

GST/HST on Face Masks and Face Shields

Previously announced, personal tax measures.

The budget proposes to increase the capital gains inclusion rate from 1/2 to:

• 2/3 for dispositions after June 24, 2024 for corporations and trusts, and
• 2/3 for the portion of capital gains realized after June 24, 2024 in excess of an annual $250,000 threshold for individuals

The $250,000 annual threshold would apply to capital gains realized by an individual, either directly or indirectly via a partnership or trust, net of:

• current year capital losses
• capital losses of other years applied to reduce current year capital gains, and
• capital gains in respect of which the Lifetime Capital Gains Exemption (LCGE), the proposed Employee Ownership Trust Exemption or the proposed Canadian Entrepreneurs’ Incentive is claimed

As a result, the following rates will apply to capital gains earned by individuals in excess of the $250,000 threshold who are subject to the top marginal income tax rate (i.e. on taxable income exceeding: $355,845 in Alberta, $252,752 in British Columbia, $1,103,478 in Newfoundland and Labrador, $500,000 in the Yukon and $246,752 in all other jurisdictions).

The budget also proposes to decrease the stock option deduction to 1/3 to align with the new capital gains inclusion rate.  Individuals would continue to benefit from a deduction of 1/2 of the taxable benefit up to a combined $250,000 for both employee stock options and capital gains.

The inclusion rate for net capital losses carried forward and applied against capital gains will be adjusted to reflect the inclusion rate of the capital gains being offset.   

Transitional rules will apply to taxation years that begin before June 25, 2024 and end after June 24, 2024 such that capital gains realized before June 25, 2024 would be subject to the 1/2 inclusion rate and capital gains realized after June 24, 2024 (net of any losses) would be subject to a 2/3 inclusion rate. The $250,000 threshold will not be prorated for individuals in 2024 and will apply only against capital gains incurred after June 24, 2024.

Additional details will be provided in the coming months.   

Earning capital gains through a Canadian-controlled private corporation (CCPC)

In most jurisdictions, the increase in the capital gains inclusion rate makes it less attractive for individuals to earn capital gains in excess of $250,000 through a CCPC instead of directly. The  Appendix shows the resulting income tax deferral (prepayment) and the tax cost for an individual who realizes capital gains in excess of $250,000 and pays tax at the top tax rate.

> Back to top

Lifetime Capital Gains Exemption (LCGE)

The budget proposes to increase the LCGE on eligible capital gains from $1,016,836 to $1,250,000 for dispositions that occur after June 24, 2024. The indexing of the LCGE to inflation will resume in 2026.

The budget introduces the Canadian Entrepreneurs’ Incentive, which will reduce the taxes on capital gains from the disposition of shares by eligible individuals which meet the following conditions:

• at the time of the sale the share was a share of a small business corporation owned directly by an individual
• used principally in an active business carried on primarily in Canada by the CCPC or a related corporation
• certain shares or debts of connected corporations, or
• a combination of these assets
• the individual was a founding investor and the individual held the share for a period of five years prior to the disposition
• at all times since the share subscription until the time immediately before the sale, the individual directly owned shares with a fair market value (FMV) of more than 10% of the FMV of all of the issued and outstanding shares of the corporation and shares entitling the individual to more than 10% of the votes
• throughout the five year period before the disposition the individual was actively engaged in a regular, continuous and substantial basis in the activities of the business
• the share does not represent a direct or indirect interest in a professional corporation, a corporation whose principal asset is the reputation or skill of one or more employees, or a corporation that carries on certain types of businesses including a business operating in the financial, insurance, real estate, food and accommodation, arts, recreation, or entertainment sector, or providing consulting or personal care services
• the share must have been obtained for fair market value consideration

The incentive would provide a capital gains inclusion rate of one half of the prevailing inclusion rate on up to $2 million in capital gains per individual during their lifetime. The $2 million limit will be phased in over 10 years by increments of $200,000 per year reaching $2 million by January 1, 2034.  

Applying the proposed 2/3 inclusion rate would result in an inclusion rate of 1/3 for qualifying dispositions.  This will apply in addition to the LCGE.

This measure would apply to dispositions that occur after December 31, 2024.

Alternative Minimum Tax (AMT)

The 2023 budget announced amendments to change the calculation of the AMT. Draft legislative proposals were released for consultation in the summer of 2023. (For more information, see our Tax Insights “ Proposed changes to the alternative minimum tax: How will it affect individuals and trusts ”.)

The budget proposes to revise the proposed charitable donation tax credit claim to allow individuals to claim 80% when calculating AMT (as opposed to the previously proposed 50%).

The budget also proposes additional amendments to the AMT proposals including:

• allowing deductions for the Guaranteed Income Supplement, social assistance and workers compensation payments
• fully exempting employee ownership trusts (EOTs) from the AMT, and
• allowing certain disallowed credits under the AMT to be eligible for the AMT carry-forward (i.e. the federal political contribution tax credit, investment tax credits (ITCs), and labour-sponsored funds tax credit)

The amendments would apply to taxation years that begin after December 31, 2023.

The budget also proposes certain technical amendments to the AMT legislative proposals to exempt certain trusts for the benefit of Indigenous groups.

The 2023 budget proposed tax rules to create EOTs. The 2023 Fall Economic Statement proposed to exempt $10 million of capital gains on the sale of a business to an EOT subject to certain conditions.

The budget introduces the conditions for this exemption. The exemption will be available to an individual (other than a trust) on the sale of a business to an EOT where the following conditions are met:

• the individual, a personal trust of which the individual is a beneficiary, or a partnership in which the individual is a member, disposes of shares of a corporation that is not a professional corporation
• the transaction is a qualifying business transfer (as defined in the proposed rules for EOTs) in which the trust acquiring the shares is not already an EOT or a similar trust with employee beneficiaries
• throughout the 24 months immediately prior to the qualifying business transfer, the transferred shares were exclusively owned by the individual claiming the exemption, a related person, or a partnership in which the individual is a member; and over 50% of the FMV of the corporation’s assets were used principally in an active business
• at any time prior to the qualifying business transfer, the individual (or their spouse or common-law partner) has been actively engaged in the qualifying business on a regular and continuous basis for a minimum period of 24 months
• immediately after the qualifying business transfer, at least 90% of the beneficiaries of the EOT are resident in Canada

Where multiple individuals dispose of shares to an EOT as part of a qualifying transfer and meet the conditions above, they may each claim an exemption, however the total exemption in respect of the sale cannot exceed $10 million. The individuals would have to agree on the allocation of the exemption.

If an EOT has a disqualifying event within 36 months of the transfer, the exemption claim will be retroactively denied. If this occurs more than 36 months after a transfer the EOT will be deemed to realize a capital gain equal to the total exempt capital gains. A disqualifying event would result where an EOT loses its status as an EOT or if less than 50% of the FMV of the qualifying business shares is attributable to assets used principally in an active business at the beginning of two consecutive years of the corporation.

The EOT, any corporation owned by the EOT that acquired the transferred shares, and the individual will need to elect to be jointly and severally, or solitarily liable for any tax payable by the individual as a result of an exemption being denied due to a disqualifying event occurring during the first 36 months.  

For the purposes of the AMT calculation the capital gain on the transfer would be subject to an inclusion rate of 30% (consistent with the inclusion rate for capital gains eligible for the LCGE).            

An individual’s normal reassessment period as it relates to this exemption is proposed to be extended by an additional three years.

The budget also proposes to expand qualifying business transfers to include the sale of shares to a workers cooperative corporation, provided it meets certain conditions.

These measures will apply to qualifying dispositions of shares that occur between January 1, 2024 through December 31, 2026.

The budget proposes to double the volunteer firefighters tax credit and the search and rescue volunteers tax credit to $6,000 for the 2024 and subsequent taxation years; this increases the maximum annual tax savings to $900.

The budget proposes to extend the eligibility for this credit for an additional year, so that it will apply to flow-through share agreements entered into before April 1, 2025.

Canada Child Benefit (CCB)

A CCB recipient is no longer eligible to claim the CCB in respect of a child in the month following the child’s death. The budget proposes to extend eligibility for the CCB to six months after the child’s death, provided the individual continued to be eligible for the CCB.

The budget proposes to extend the list of expenses recognized for the disability supports deduction.

It also provides that expenses for service animals, as defined under the medical expense tax credit (METC) rules, will be recognized under the disability supports deduction. The individual will choose whether to claim under the METC or the disability supports deduction.

A foreign charity may register as a qualified donee for a 24-month period where it received a gift from His Majesty in right of Canada and it is pursuing certain activities in the national interest of Canada.  The budget proposes to extend the eligibility of a foreign charity to be considered a qualified donee from 24 months to 36 months.  The foreign charity would also be required to submit an annual information return to the CRA that would be made publicly available. The extension will apply to foreign charities registered after April 16, 2024. The reporting requirements will apply to taxation years beginning after April 16, 2024.        

The budget also proposes to simplify the issuance of official donation receipts by removing certain requirements.

Home Buyers’ Plan (HBP)

To help first-time home buyers, the budget proposes to:

• increase, from $35,000 to $60,000, the amount that an eligible home buyer can withdraw from their Registered Retirement Savings Plan (RRSP) under the HBP, without subjecting the withdrawal to tax, to buy or build a qualifying home (i.e. a first home or a home for a specified disabled individual), effective for the 2024 and subsequent calendar years, for withdrawals made after April 16, 2024
• temporarily extend the repayment grace period by three years, to five years, under the HBP, so that eligible home buyers who withdraw from their RRSP between January 1, 2022 and December 31, 2025 will have up to five years before they need to start repayments to their RRSP

Registered plans (RRSPs, Registered Retirement Income Funds, Tax-Free Savings Accounts, Registered Education Savings Plans, Registered Disability Savings Plans, First Home Savings Accounts, and Deferred Profit Sharing Plans) can invest only in qualified investments for those plans. Qualified investments include mutual funds, publicly traded securities, government and corporate bonds and guaranteed investment certificates. Over the years the qualified investment rules have been expanded to include additional investments for certain plans and to reflect the introduction of new types of plans, but there are inconsistencies and the qualified investment rules are difficult to understand in some cases.

Specific issues are currently under consideration. Stakeholders are invited to submit comments by July 15, 2024 as to how the qualified investment rules can be modernized on a prospective basis to improve the clarity and coherence of the registered plans regime.

Eligible tradespeople and apprentices in the construction industry are currently able to deduct up to $4,000 in eligible travel and relocation expenses per year by claiming the labour mobility deduction for tradespeople. A private member’s bill (Bill C-241) was introduced to enact an alternative deduction for certain travel expenses of tradespeople in the construction industry, with no cap on expenses, retroactive to the 2022 taxation year.

The budget announces that the government will consider bringing forward amendments to the Income Tax Act (ITA) to provide a single, harmonized deduction for tradespeople’s travel that respects the intent of Bill C-241.

The budget proposes to amend the ITA to exclude from taxation the income of the trusts established under the First Nations Child and Family Services, Jordan’s Principle, and Trout Class Settlement Agreement. This will also ensure that payments received by class members as beneficiaries of the trusts will not be included when computing income for federal income tax purposes.

This measure will apply to the 2024 and subsequent taxation years.

Business tax measures

The 2023 budget proposed a refundable ITC for clean electricity, equal to 15% of the capital cost of eligible property. The 2024 budget provides the design and implementation details of the ITC, including the eligibility criteria. It also includes special rules for property that generates electricity from natural gas with carbon capture and property used to transmit electrical energy between provinces or territories, as well as details of the compliance and recovery process.

The ITC will be available only to eligible Canadian corporations, which are defined as:

• taxable Canadian corporations and pension investment corporations
• provincial and territorial Crown corporations (subject to additional requirements)
• corporations owned by municipalities or Indigenous communities

Property eligible for the ITC includes equipment used to generate electricity from:

• solar, wind or water energy (certain class 43.1 property, but hydroelectric installations would not be subject to a capacity limit)
• concentrated solar energy (as defined for the purposes of the proposed clean technology ITC)
• nuclear fission, including heat generating equipment (as defined for the purposes of the proposed clean technology ITC, without the generating capacity limits and other certain requirements of that credit)
• geothermal energy, including heat generating equipment, if it is used exclusively for that purpose (excluding equipment that is part of a system that extracts fossil fuel for sale)
• specified waste materials, as part of a system

Eligible property also includes equipment that is:

• stationary electricity storage equipment and equipment used for pumped hydroelectric energy storage (excluding any that uses a fossil fuel in operation)
• part of an eligible natural gas energy system (special rules apply)
• used for transmission of electricity between provinces and territories (special rules apply)

Previously proposed labour requirements must be met to qualify for the 15% ITC, otherwise a 5% ITC is available. The ITC will be subject to potential repayment obligations, repayable in proportion to the FMV of the particular property when it has been converted to an ineligible use, exported from Canada, or disposed of.

The ITC will be available for new eligible property (i.e. has not been used for any purposes before its acquisition) that is acquired and becomes available for use after April 15, 2024 and before 2035 in respect of projects that did not begin construction before March 28, 2023.

The budget introduces the EV supply chain ITC, equal to 10% of the cost of buildings used in Canada in the following electric vehicle supply chain segments:

• electric vehicle assembly
• electric vehicle battery production
• cathode active material production

To qualify for the ITC, the taxpayer (or member of a group of related taxpayers) must claim the clean technology manufacturing ITC (CTMITC) in all three of the segments (or must claim the CTMITC in two of the three segments and hold at least a qualifying minority interest in an unrelated corporation that claims the CTMITC in the third segment – the building costs of the unrelated corporation would also qualify for the new ITC).

The ITC is effective for property that is acquired and becomes available for use after December 31, 2023. The ITC will be reduced to 5% for 2033 and 2034 and 0% after 2034. Design and implementation details of the ITC will be provided in the 2024 Fall Economic Statement.

The 2023 budget proposed a clean technology manufacturing ITC, and draft legislative proposals were released in December 2023. The 2024 budget proposes to update the clean technology manufacturing ITC for production of qualifying minerals (such as copper, nickel, cobalt, lithium, graphite and rate earth elements) that occur at polymetallic projects (i.e. projects engaged in the production of multiple minerals) by:

• clarifying that the value of qualifying materials will be used as the appropriate output metric when assessing the extent to which property is used (or expected to be used) for qualifying mineral activities producing qualifying materials
• modifying eligible expenditures to include investments in eligible property used in qualifying mineral activities that are expected to produce primarily qualifying materials at mine or well sites, including tailing ponds and mills located at these sites (50% or more of the financial value of the output comes from qualifying materials)

A safe harbour rule will apply to the recapture rule for all qualifying mineral activities, to mitigate against the effects of mineral price volatility on the potential recapture of the ITC, the details of which will be provided at a later date.

Accelerated Capital Cost Allowance (CCA)

Purpose-built rental housing.

The budget provides an accelerated CCA of 10% for new eligible purpose-built rental projects that begin construction after April 15, 2024 and before January 1, 2031, and are available for use before January 1, 2036.

Eligible property will be new purpose-built rental housing that is a residential complex:

• with at least four private apartment units, or 10 private rooms or suites, and
• in which at least 90% of residential units are held for long-term rental

The Accelerated Investment Incentive (AII), which suspends the half-year rule, will continue to apply to eligible property put in use before 2028. The accelerated CCA will not apply to renovations of existing residential complexes, but new additions to an existing structure will be eligible. Projects that convert existing non-residential real estate into a residential complex will be eligible.

Productivity-enhancing assets

The budget provides immediate expensing (i.e. a 100% first-year CCA deduction) for property that is acquired after April 15, 2024 and becomes available for use before January 1, 2027, for the following CCA classes of assets:

• class 44 (patents or rights to use patented information for a limited or unlimited period)
• class 46 (data network infrastructure equipment and related systems software)
• class 50 (general-purpose electronic data-processing equipment and systems software)

The accelerated CCA will be available only for the year in which the property becomes available for use. For a short taxation year, the accelerated CCA must be prorated and will not be available in the following taxation year. Property that becomes available for use after 2026 and before 2028 will continue to benefit from the AII.

Property that has been used (or acquired for use) for any purpose before it is acquired by the taxpayer will be eligible for the accelerated CCA only if both of the following conditions are met:

• neither the taxpayer nor a non-arm’s length person previously owned the property, and
• the property has not been transferred to the taxpayer on a tax-deferred “rollover” basis

The excessive interest and financing expenses limitation (EIFEL) rules restrict a Canadian taxpayer’s deductions for interest and financing expenses, based upon a percentage of its “tax-EBITDA” (i.e. its taxable income, adjusted for items such as interest expenses, depreciation and amortization). For a discussion of the EIFEL rules, see our  Tax Insights “ Bill C-59 ─ Excessive interest and financing expenses limitation (EIFEL) regime .” The EIFEL rules currently include a single sector-specific exemption, for certain interest and financing expenses relating to public-private partnership (P3) infrastructure projects. The budget proposes to extend this election, on an elective basis, for certain interest and financing expenses relating to arm’s length financing that is used to build or acquire certain purpose-built rental housing located in Canada. This exemption will be effective for taxation years beginning after September 30, 2023, consistent with the EIFEL rules more generally. However, this exemption will be available only for expenses incurred before January 1, 2036.

The government is concerned that some landowners are holding residentially zoned vacant land as a speculative investment. The budget announces that the government will consider introducing a new tax on residentially zoned vacant land to spur development. The government will launch consultations later this year.

In March 2024, the government began consultations on how federal policies can better support the needs of all Canadians seeking to become homeowners. The government will provide an update in the 2024 Fall Economic Statement.

The budget announces the government’s intention to restrict the acquisition of existing single-family homes by very large corporate investors. The government will consult in the coming months and provide further details in the 2024 Fall Economic Statement.

The budget announces that the government is exploring new measures to expand access to alternative financing products for home purchasers, such as halal mortgages. These measures could include changes in the tax treatment of these products or a new regulatory regime for financial service providers, while ensuring adequate consumer protections are in place.

The budget proposes several amendments to the CRA’s information gathering provisions in the ITA, with the intent of enhancing the efficiency and effectiveness of tax audits and facilitating the collection of tax revenues on a timelier basis. These changes include:

• allowing the CRA to issue a new type of notice, referred to as a “notice of non-compliance” and to levy a monetary penalty
• permitting the CRA to specify that any required information (oral or written) or documents be provided under oath or affirmation
• imposing a penalty when the CRA obtains a compliance order against a taxpayer, and
• extending the stop the clock rules (which suspend the counting of days in the assessment limitation period), so that these rules apply when a taxpayer seeks judicial review of any requirement or notice issued to the taxpayer by the CRA in relation to the audit and enforcement process, and during any period that a notice of non-compliance is outstanding

Analogous amendments are also proposed to other federal tax statutes administered by the CRA. The budget also proposes certain technical amendments to ensure the rules meet their policy objectives.

These amendments would come into force upon royal assent of the enacting legislation.

The ITA allows a corporation to deduct the amount of any dividends received on a share of a corporation resident in Canada, subject to certain limitations.

One of these limitations is an anti-avoidance rule that denies the dividend received deduction in connection with synthetic equity arrangements. Synthetic equity arrangements include arrangements in which a person receives a dividend on a share, but all or substantially all of the risk of loss and opportunity for gain or profit (the “economic exposure”) in respect of the share are provided to another person.

Where a taxpayer enters into a synthetic equity arrangement in respect of a share, the taxpayer is generally obligated to compensate the other person for the amount of any dividends paid on the share. This compensation payment may result in a tax deduction for the taxpayer in addition to the dividend received deduction. Unless the anti-avoidance rule applies to deny the dividend received deduction, a tax loss would generally arise as a result of the two deductions.

The anti-avoidance rule incorporates certain exceptions, including where the taxpayer establishes that no tax-indifferent investor has all or substantially all of the economic exposure in respect of the share. An associated exception is also available for synthetic equity arrangements traded on a derivatives exchange.

The budget proposes to remove the tax-indifferent investor exception (including the exchange traded exception) to the anti-avoidance rule. This measure would prevent taxpayers from claiming the dividend received deduction for dividends received on a share in respect of which there is a synthetic equity arrangement.

This measure would apply to dividends received after December 31, 2024.

A mutual fund is a type of investment vehicle that allows investors to pool their money and invest in a portfolio of investments without purchasing the investments directly. A mutual fund corporation is a mutual fund organized as a corporation that meets certain conditions set out in the ITA.

The ITA includes special rules for mutual fund corporations that facilitate conduit treatment for investors (shareholders). For example, these rules generally allow capital gains realized by a mutual fund corporation to be treated as capital gains realized by its investors. In addition, a mutual fund corporation is not subject to mark-to-market taxation and can elect capital gains treatment on the disposition of Canadian securities.

To qualify as a mutual fund corporation under the ITA, a corporation must satisfy several conditions, including that it must be a “public corporation”. A corporation can meet this condition if a class of its shares is listed on a designated stock exchange in Canada. A corporation that is controlled by a corporate group may satisfy this condition, and qualify as a mutual fund corporation, even though it is not widely held. The government is concerned that this could allow a corporate group to use a mutual fund corporation to benefit from the special rules available to these corporations in an unintended manner.

Although the government believes this planning can be challenged based on existing rules in the ITA, the budget proposes specific amendments to the ITA to preclude a corporation from qualifying as a mutual fund corporation where it is controlled by or for the benefit of a corporate group (including a corporate group that consists of any combination of corporations, individuals, trusts, and partnerships that do not deal with each other at arm’s length). Exceptions would be provided to ensure that the measure does not adversely affect mutual fund corporations that are widely held pooled investment vehicles.

This measure would apply to taxation years that begin after 2024.

The budget introduces the Canada Carbon Rebate for Small Business, to return a portion of the federal backstop pollution pricing fuel charge proceeds collected from a province. This will be an automatic refundable tax credit for CCPCs with less than 500 employees in Canada in the calendar year in which the fuel charge begins. The tax credit in respect of the 2019-20 to 2023-24 fuel charge years will be available to a CCPC that files a tax return for its 2023 taxation year by July 15, 2024 (with similar timelines for future fuel charge years).

The tax credit amount:

• is determined for each applicable province in which the eligible corporation had employees in the calendar year in which the fuel charge year begins; and
• is equal to the number of persons employed by the eligible corporation in the province in that calendar year multiplied by a payment rate specified by the Minister of Finance for the province for the corresponding fuel charge year

The ITA includes an anti-avoidance rule that is intended to prevent taxpayers from avoiding payment of their tax liabilities by transferring their assets to non-arm’s length persons. The effect of this tax debt avoidance rule is to make the transferee jointly and severally, or solidarily, liable with the transferor for the transferor’s tax debts, to the extent that the value of the property transferred exceeds the amount of consideration given by the transferee for the property.

The ITA contains a number of rules that address various planning techniques employed by taxpayers attempting to circumvent the tax debt avoidance rule, as well as a penalty for those who engage in, participate in, assent to, or acquiesce in planning activity that they know, or would reasonably be expected to know, is tax debt avoidance planning.

The budget includes a new specific measure to address tax debt avoidance planning (although the government believes this planning can also be challenged based on existing rules in the ITA). The measure would apply in the following circumstances:

• there has been a transfer of property from a tax debtor to another person
• as part of the same transaction or series of transactions, there has been a separate transfer of property from a person other than the tax debtor to a transferee that does not deal at arm’s length with the tax debtor, and
• one of the purposes of the transaction or series is to avoid joint and several, or solidary, liability

Where these conditions are met, the property transferred by the tax debtor would be deemed to have been transferred to the transferee for the purposes of the tax debt avoidance rule. This would ensure that the tax debt avoidance rule applies in situations where property has been transferred from a tax debtor to a person and, as part of the same transaction or series, property has been received by a non-arm’s length person. The penalty applicable to those who participate in tax debt avoidance planning would also be extended to this proposed new rule.

In many cases, tax debt avoidance planning is facilitated by a planner who receives a significant fee, which is effectively funded by a portion of the avoided tax debt. The courts have held that a taxpayer who engages in tax debt avoidance planning is normally not jointly and severally, or solidarily, liable for the portion of the tax debt that has effectively been retained by the planner as a fee. The budget proposes that taxpayers who participate in tax debt avoidance planning be jointly and severally, or solidarily, liable for the full amount of the avoided tax debt, including any portion that has effectively been retained by the planner.

Similar amendments would be made to comparable provisions in other federal statutes.

These measures would apply to transactions or series of transactions that occur after April 15, 2024.

The ITA includes a general rule providing that a person who fails to file or make a return or comply with certain specified rules is guilty of an offence, and liable to penalties of up to $25,000 and imprisonment for up to a year. The mandatory disclosure rules in the ITA also include specific penalties that apply in these circumstances, making the application of this general penalty provision unnecessary.

The budget therefore proposes to remove from the scope of the general penalty provision the failure to file an information return in respect of a reportable or notifiable transaction under the mandatory disclosure rules.

This amendment would be deemed to have come into force on June 22, 2023, which is the day the enhanced mandatory disclosure rules received royal assent.

Under the ITA, losses and other tax attributes that arise from expenditures for which a taxpayer did not ultimately bear the cost are generally not recognized. The ITA contains a set of debt forgiveness rules that apply where a commercial debt is settled for less than its principal amount. These rules generally reduce tax attributes by the amount of debt that is forgiven and, where tax attributes have been fully reduced, the rules cause an income inclusion equal to half of the remaining forgiven amount. The ITA also contains a rule that entitles an insolvent corporation to a corresponding deduction to offset all or part of an income inclusion from the debt forgiveness rules.

Bankrupt taxpayers are generally excluded from these debt forgiveness rules. Instead, a separate loss restriction rule applies to extinguish the losses of bankrupt corporations that have received an absolute order of discharge.

The government is concerned that some taxpayers have sought to manipulate the bankrupt status of an insolvent corporation, with a view to benefiting from the exception in the debt forgiveness rules while also avoiding the loss restriction rule applicable to bankrupt corporations. This planning seeks to preserve the losses and other tax attributes of the insolvent corporation (which would otherwise be eliminated upon the forgiveness of its debts), so that these attributes can be acquired and used by a profitable corporation. This planning is the subject of a designated transaction under the notifiable transactions element of the mandatory disclosure rules.

Although the government believes that manipulation of bankrupt status can be challenged based on existing rules in the ITA, the budget proposes a specific legislative measure to address this issue: repealing the exception to the debt forgiveness rules for bankrupt corporations and the loss restriction rule applicable to bankrupt corporations. This change would subject bankrupt corporations to the general rules that apply to other corporations whose commercial debts are forgiven. The bankruptcy exception to the debt forgiveness rules would remain in place for individuals. While bankrupt corporations would be subject to the reduction of their loss carryforward balances and other tax attributes upon debt forgiveness, as insolvent corporations they could qualify for relief from the debt forgiveness income inclusion rule provided under the existing deduction for insolvent corporations.

These proposals would apply to bankruptcy proceedings that are commenced on or after April 16, 2024.

Scientific Research and Experimental Development (SR&ED)

The government launched a consultation on the existing SR&ED tax incentives on January 31, 2024, which closed on April 15, 2024. The budget announces a second phase of consultations, to focus on specific policy parameters, explore how Canadian public companies could become eligible for the enhanced SR&ED ITC and inform how additional funding announced by the budget can support future enhancements to the SR&ED program. Further details of the consultation will be released on the Department of Finance Canada website at a later date.

International tax measures

The Organisation for Economic Co-operation and Development (OECD) has developed a framework for the automatic exchange of tax information relating to transactions in crypto-assets, the Crypto-Asset Reporting Framework (CARF). The budget proposes to implement the CARF in Canada. The new reporting rules will apply to crypto-asset service providers that are resident in Canada, or carry on business in Canada, and that provide services effectuating exchange transactions in crypto-assets. These service providers will need to report certain information regarding their customers and crypto-asset transactions. The budget also includes proposed amendments to the Canadian rules implementing the OECD’s Common Reporting Standard, including changes relating to electronic money products and central bank digital currencies. These measures will apply to 2026 and subsequent calendar years.

A person who makes a payment to a non-resident for services rendered in Canada is currently required to withhold 15% of the payment and remit that amount to the CRA. This is intended to serve as a prepayment of tax that the non-resident may ultimately owe in Canada. Certain non-residents do not owe Canadian tax for these services, e.g. due to exemptions in tax treaties, or exemptions for specific activities like international shipping. In these circumstances, the CRA may provide an advance waiver from the withholding obligation for specific transactions, or the non-residents may apply for refunds of amounts that have already been withheld. The budget proposes to give the CRA legislative authority to grant single waivers that cover multiple transactions occurring over a specific time period, where certain conditions are satisfied. This measure will take effect upon royal assent of the enacting legislation.

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting has developed a two-pillar plan to reform the international tax system, as part of the “BEPS 2.0” initiative. On October 8, 2021, Canada and 135 other countries in the Inclusive Framework committed to adopt this plan (for a discussion on that commitment, see our  Tax Insights  “ The new international tax framework and Canada’s digital services tax ”). The budget provides an update on the two pillars of this international tax reform initiative.

Pillar One will introduce new rules for allocating taxing rights between countries to address challenges raised by the digital economy. These rules will generally apply to multinational enterprises (MNEs) with annual revenue above €20 billion and profit margins above 10%. The right to tax a portion of these MNEs’ profits will be reallocated to market countries (i.e. the countries where the MNEs’ users and customers are located).

The budget reaffirms Canada’s commitment to bringing Pillar One into effect as soon as a critical mass of countries is willing to participate. In the meantime, Canada is moving ahead with its plan to enact the Digital Services Tax (DST). Implementing legislation for the DST is currently before Parliament in Bill C-59. The DST will take effect beginning in calendar year 2024, with the first year covering taxable revenues earned since January 1, 2022. (For a discussion of the DST, see our  Tax Insights  “ Digital Services Tax: One step closer to becoming a reality .”)

Pillar Two will introduce a 15% global minimum tax. This tax will generally apply to MNEs with global revenues of at least €750 million. These MNEs will be required to compute their effective tax rate (ETR) in each country where they operate. If the ETR for a particular country is below 15%, a top-up tax will be imposed, to raise that ETR to 15% (this top-up tax may be reduced by a substance-based income exclusion, which is computed based on the payroll costs and net book value of tangible assets located in the jurisdiction). Draft legislative proposals for a Global Minimum Tax Act to implement the Pillar Two regime in Canada were released for public comment in August 2023 (for a discussion of those proposals, see our  Tax Insights  “ Canada releases draft Global Minimum Tax Act ”). The budget states that Canada is moving forward with this implementing legislation and intends to introduce it in Parliament soon.

Sales tax measures

Extending goods and services tax (gst) relief to student residences.

On September 14, 2023, the government announced that it would temporarily remove the GST from new purpose-built rental housing projects (i.e. apartment buildings, student housing and senior residences built specifically for long-term rental accommodation) by implementing an Enhanced (100%) GST Rental Rebate for new qualifying purpose-built rental housing projects (for more information, see our  Tax Insights  “ Enhanced GST rental rebate for rental apartments that begin construction after September 13, 2023 ").

To ensure that universities, public colleges and school authorities can also claim the Enhanced (100%) GST Rental Rebate for student residences that are built for short-term use, the budget proposes to amend the  Excise Tax Act  to allow them to apply the normal GST/Harmonized sales tax (HST) rules that apply to other builders (i.e. paying GST/HST on the final value of the building) in respect of new student housing projects.

The budget also proposes to relax the rebate conditions so that universities, public colleges and school authorities that operate on a not-for-profit basis (i.e. those that would currently qualify for the Public Service Body rebates under the GST/HST) can claim the 100% rebate in respect of any new student residence that they acquire or construct provided it is primarily for the purpose of providing a place of residence for their students.

The proposed measures would apply to student residences that begin construction after September 13, 2023 and before 2031, and that complete construction before 2036.

The budget proposes to repeal the temporary zero rating of certain face masks or respirators and certain face shields under the GST/HST for supplies made after April 30, 2024.

Previously Announced Measures

The budget confirms that the government will proceed with the following previously announced measures, as modified to take into account consultations, deliberations and legislative developments since their announcement or release:

• legislative proposals released on December 20, 2023, which include measures relating to the clean hydrogen ITC, the clean technology manufacturing ITC, concessional loans and short-term rentals
• legislative and regulatory proposals announced in the 2023 Fall Economic Statement, which include measures relating to the Canadian journalism labour tax credit, the expansion of eligibility for the clean technology and clean electricity ITC, the GST/HST joint venture election rules and the Underused Housing Tax
• legislative and regulatory amendments to implement the Enhanced (100%) GST Rental Rebate for purpose-built rental housing announced on September 14, 2023
• the carbon capture, utilization and storage and the clean technology ITCs and labour requirements related to certain “clean economy” ITCs
• enhancing the reduced tax rates for zero-emission technology manufacturers
• flow-through shares and the critical mineral exploration tax credit – lithium from brines
• Retirement Compensation Arrangements
• strengthening the Intergenerational Business Transfer framework
• the income tax and GST/HST treatment of credit unions
• a tax on repurchases of equity
• modernizing the General Anti-Avoidance Rule
• global minimum tax and DST
• technical amendments to GST/HST rules for financial institutions
• providing relief in relation to the GST/HST treatment of payment card clearing services
• extending the quarterly duty remittance option to all licensed cannabis producers
• revised Luxury Tax draft regulations to provide greater clarity on the tax treatment of luxury items
• technical tax amendments to the ITA and the Income Tax Regulations
• legislative amendments to implement changes discussed in the transfer pricing consultation paper released on June 6, 2023
• tax measures announced in the 2023 budget, including the dividend received deduction by financial institutions
• substantive CCPCs
• technical amendments to the ITA and Income Tax Regulations
• legislative amendments to implement the hybrid mismatch arrangements rules announced in the 2021 budget

The budget also reaffirms the government’s commitment to move forward, as required, with technical amendments to improve the certainty and integrity of the tax system.

Integration – Capital gains ($)

(taxation year ended December 31, 2024, and $10,000 of capital gains earned after June 24, 2024)

This table shows:

• the income tax deferral (prepayment) if capital gains in excess of $250,000 are earned and retained in a corporation as opposed to being earned directly by an individual
• the tax (cost) if the after-tax corporate income is paid out as a dividend to the shareholder in 2024

The table assumes:

• the individual is in the top marginal tax rate
• no capital gains deductions are available
• the non-taxable portion of the capital gain is distributed as a tax-free capital dividend
• the taxable dividend paid is sufficient to generate a full refund of refundable tax 

Download a PDF

Tax Insights: 2024 Federal budget ─ Supporting housing, raising taxes

Dean Landry

National Tax Leader, PwC Canada

Tel: +1 416 815 5090

© 2018 - 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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Money latest: Morrisons shoppers are going to notice two changes in stores

Morrisons has launched two major changes for shoppers – with stores offering travel money and trolleys now featuring advertisements. Read this and all the latest consumer and personal finance news below - and leave your thoughts in the box.

Thursday 25 April 2024 19:51, UK

• Halifax hikes mortgage rates - as entire market moves upwards
• Renters' Reform Bill signed off - but with indefinite delay to no-fault evictions ban
• Morrisons rolls out bureau de change and trolley adverts

Essential reads

• The world of dark tourism - what is it, is it ethical, and where can you go?
• Money Problem : I have a mortgage offer - will it change now rates are rising?
• Savings Guide : Why locking into fixed-rate bond could be wise move
• 'More important than a will': What are lasting power of attorneys and how much do they cost?
• Cheap Eats : Michelin chef's secret lasagne tip - and expensive ingredient you shouldn't use

Ask a question or make a comment

Halifax has become the latest major lender to up mortgage rates.

They are putting up a range of deals by 0.2%.

BM Solutions also announced increases today.

It follows similar moves by TSB, NatWest, Virgin, Barclays, Accord, Leeds Building Society, HSBC and Coventry last week.

Lenders are responding to swap rates - which dictate how much it costs to lend money - rising on the back of higher than expected US inflation data, and concerns this could delay interest rate cuts there. 

US trends often materialise elsewhere - though many economists are still expecting a base rate cut from 5.25% to 5% in the UK in June.

This is what average mortgage rates look like as of today...

Justin Moy, managing director of EHF Mortgages, told Newspage: "Yet more bad news for mortgage borrowers, as two of the biggest lenders announce increases to their fixed-rate products. 

"As mortgage rates creep up and past 5% even for those with the largest deposits, we seem to be lacking a clear strategy of the government or the Bank of England on how rates will eventually fall. 

"Even 2% inflation may not be enough to reverse the recent trends in rates."

Morrisons has launched two major changes for shoppers – with stores now offering travel money and trolleys featuring advertisements.

Announcing their bureau de change service, Morrisons said customers could exchange currencies in select stores or could place their money orders online at Morrisonstravelmoney.com.

Using the online service means customers can either click and collect their cash in certain Morrisons stores or at any of Eurochange's 240 branches. Alternatively, they can go for home delivery.

Services director at Morrisons, Jamie Winter, said the service "will provide our customers with easy access to a wide range of currencies at competitive exchange rates".

So far, stores in the following areas have travel money kiosks:

• Basingstoke

In other news, the supermarket chain rolled out a new trolley advertising across 300 stores in a partnership with Retail Media Group.

A sweetener used in drinks, sauces, savoury and sweet foods and chewing gum can cause serious damage to people's health, according to a new study.

Neotame, a "relatively new" sweetener, could damage the intestine by causing damage to healthy bacteria in the gut, according to the study, leading it to become diseased and attack the gut wall.

The study by Anglia Ruskin University (ARU), published in the journal Frontiers in Nutrition, found the negative effect of neotame "has the potential to influence a range of gut functions resulting in poor gut health", potentially impacting metabolic and inflammatory diseases, neuropathic pain, and neurological conditions.

The illnesses this could lead to include irritable bowel disease or insulin resistance.

Read the full story here ...

As we reported yesterday, a pilot programme is coming into force in Venice today that means visitors have to pay a €5 (£4.28) charge to enter the city.

Authorities say the pilot programme is designed to discourage tourists and thin the crowds that throng the canals during peak holiday season, making the city more liveable for residents.

Pictures have been emerging this morning of people queueing to register for a QR code that will allow them to enter after they have paid the charge - and officials carrying out checks on people inside the city.

People found to be contravening the rules can be fined up to €300 (£257).

As detailed in our story , the move has been met with anger among some in the city.

Venice is the first city in the world to introduce a payment system for tourists - but comments from its most senior tourist official suggested it may become a more common practice for major tourist hotspots in Europe.

Simone Venturini revealed the pilot programme was being closely watched by other places suffering from mass tourism - including other Italian art cities and hugely popular weekend-break destinations Barcelona and Amsterdam.

More than 160,000 people switched to Nationwide from other providers at the end of 2023, when the building society was offering a huge cash switching incentive.

According to figures from the Current Account Switch Service (CASS), Nationwide had a net gain of 163,363 account switchers between October and December, after leavers were taken into account.

It was the highest quarterly gain since the same period in 2022, when 111,941 switched to Nationwide.

The building society launched a £200 switching bonus for new joiners in September last year - the biggest giveaway on offer at the time. It withdrew the offer just before Christmas.

The latest CASS figures, which show Nationwide had 196,260 total gains before accounting for leavers, suggesting it could have spent up to £39m on nabbing customers from other providers in the last three months of the year.

Barclays and Lloyds Bank saw more modest net gains of 12,823 and 5,800 respectively, while the rest of the UK's big banks reported net losses.

NatWest and Halifax fared worst, losing over 40,000 more switchers each than they gained.

This week saw the last remaining switching offer on the market withdrawn.

Sainsbury's is having technical issues again - with shoppers taking to social media to say their deliveries have been delayed or cancelled.

The supermarket has been replying to customers saying: "I'm really sorry about the tech issues this morning. 

"We're aware of the situation and are working to sort it as quickly as possible. In the meantime, we'd advise you place a new order for a future date."

Customer Andrew Savage wrote: "Order has not been delivered and no confirmation email this morning."

Another, John B Sheffield, said: "So angry! Just got through to your customer line after 40 min WAIT. 

"Tells me NO DELIVERIES TODAY! tech problem? I've NO FOOD IN! ANGRY!"

In a statement to Sky News, a Sainsbury's spokesperson says: "A small technical issue affected some groceries online orders this morning. 

"We have contacted these customers directly to apologise for the inconvenience." 

In another update at 10am, the supermarket said that the issue has been resolved. 

Responding to customers on X, Sainsbury's also offered those affected e-vouchers and details on how to rebook their orders.

It comes a month after the supermarket had to cancel almost all deliveries on a Saturday in mid-March due to another technical issue.

By Daniel Binns, business reporter

A potential $38.8bn (£31bn) takeover of UK-based mining company  Anglo American  has sent its shares soaring - and helped the FTSE 100 hit yet another record high this morning.

The attempted mega-merger, by larger Australian rival BHP, is currently being reviewed by Anglo American's board.

The deal, if it goes through, would create the world's biggest copper mining company - and comes as the price of the metal continues to climb amid soaring demand.

Anglo American's shares have surged as high as 13% this morning as news of the negotiations emerged.

The announcement also helped spur the FTSE 100 to a new intraday (during the day) high of 8,098 points.

The index, of the London Stock Exchange's 100 most valuable companies, has hit a string of records this week, including  an all-time closing high of 8,044 points  on Tuesday.

The score is based on a calculation of the total value of the shares on the index.

Also moving the markets are a string of company results which were published earlier on Thursday.

Among those issuing updates to investors was drugsmaker AstraZeneca. Its stock is up more than 5% after the firm reported quarterly profit and revenue above market estimates.

Unilever is also up 5% following similar better-than-expected quarterly figures.

Another good performer is  Barclays  - despite reporting a 12% fall in profits for the first three months of 2024. Its shares are up more than 4%.

That's because its quarterly figures are slightly better than expected, and the bank has said it expects its fortunes to improve later this year.

Meanwhile, as tensions in the Middle East continue, the price of a barrel of Brent crude oil continues to hover at a price of around $88 (£70).

This morning £1 buys $1.25 US or €1.16, similar to yesterday.

Every week we get experts to answer your Money Problems - usually on a Monday, but today we have a short, bonus addition in light of multiple lenders raising mortgage rates this week on fears an interest rate cut could be delayed to a little later this year (note: many economists still think it will come in summer).

A few readers have got in touch with questions similar to this one...

My remortgage is due to complete on 1 May. I already have an offer but with rates going up, is there any way at all my offer rate could increase? Saz681

We asked David Hollingworth, director at L&C Mortgages, to answer this one...

It's great news that you are already set up with a mortgage offer, Saz - ready to make a smooth switch to a new deal and/or lender, once the current one ends.  

It does take time to set up a new mortgage so shopping around the market a good few months ahead will help you put everything in place and avoid slipping onto a high variable rate.

Fixed rates have been nudging up slightly but you have already got a formal offer in place so shouldn't worry.  

Applying for a mortgage will generally secure that rate and the lender will then carry out any further checks to issue the mortgage offer.  

The offer will be valid for a specified period, often for up to six months. Rates are always shifting for new customers but you can rest easy that your rate should be safe and sound for your switch in May.

This feature is not intended as financial advice - the aim is to give an overview of the things you should think about. Submit your dilemma or consumer dispute, leaving your name and where in the country you are, by emailing [email protected] with the subject line "Money blog". Alternatively, WhatsApp us  here .

By Ollie Cooper , Money team

Interest in a phenomenon known as "dark tourism" has been steadily rising in recent years - but what is it?

To find out, we've spoken with tourism academic  Dr Hayley Stainton  and renowned dark tourist and author Dr Peter Hohenhaus, who runs a  dark tourism website .

What is it?

In general, dark tourism involves travelling to sites connected to death or disaster.

"Dark tourism has been around for as long as we have been travelling to places associated with death," Dr Stainton says. 

However, the term wasn't officially coined until 1996 by John Lennon, a professor of tourism at Glasgow Caledonian University, in Scotland.

"Not everyone is familiar with the term," says Dr Stainton, "[but] many people have been a dark tourist at some time or another, whether intentional or not."

Some examples of the most famous sites

• Auschwitz concentration camp, Poland
• 9/11 Memorial and Museum in New York, US
• Chernobyl, Ukraine 
• Hiroshima and Nagasaki, Japan
• Choeung Ek "killing fields" and the Tuol Sleng genocide museum at the former S-21 prison in Phnom Penh, Cambodia 

Areas with a degree of infamy, like Alcatraz, are extremely popular spots that also fall under the "dark tourism" umbrella. 

How popular is it?

Dr Hohenhaus and Dr Stainton say they have noticed a rise in its popularity. 

"Tourists are looking for more unique and unusual experiences," Dr Stainton says. 

"This has seen a move away from the more traditional 'sun, sea and sand' type holidays to a variety of different tourism forms, which includes dark tourism."

Dr Hohenhaus adds: "Maybe people want to connect to more recent and hence more personally relevant history - that is definitely the case with myself."

He goes on: "I think I've learned more about the world through dark tourism than through all of my formal education or my previous academic career."

Is it ethical?

This is the big question associated with dark tourism. 

Dr Stainton says that while problems do arise, the stigma around the practice is often misguided. 

"People don't visit sites like the killing fields in Cambodia or the site of Chernobyl for 'fun' - they visit for the educational experience, as dark tourism is often also a form of educational tourism," she says.

Problems arise when tourists are not respectful to those who may have been impacted.

"For instance, taking inappropriate photos or laughing and joking when others may be in a state of mourning."

Notorious examples include people taking selfies outside Grenfell Tower and at Auschwitz. 

"It is therefore imperative that dark tourists are considerate of those around them and respectful at all times," Dr Stainton says.

"As long as you are not just after a cheap sensationalist thrill - take dark tourism seriously and do it right, and it can be an immensely enriching thing to engage in."  Dr Hohenhaus

Where could you go? 

These are Dr Hohenhaus' recommendations:

• Ijen crater in Indonesia - where at night you can see the fabled blue flames of the sulphur mines next to the volcano crater lake;
• The Polygon, the former Semipalatinsk nuclear weapons test site of the USSR, now in Kazakhstan;
• The Goli Otok former prison island off the coast of Croatia;
• The Murambi memorial to the Rwandan genocide - which Dr Hohenhaus says is "certainly the very darkest place I have ever been";
• Majdanek concentration camp memorial near Lublin, eastern Poland.

What do you think of dark tourism? Is it misunderstood, educational or abhorrent?  Let us know in the comments section...

John Lewis will be sharing its job interview questions online in an attempt to find the "best talent".

The retail chain hopes that allowing candidates to view questions before an interview will allow prospective employees to "really demonstrate what they can do" and prepare, the Financial Times reports.

John Lewis talent acquisition lead Lorna Bullett told Sky News that interviews can feel daunting and "nerves can seriously impact performance".

She added the company want "the right people" from a variety of backgrounds and with "the best talent" to join.

"It makes absolute business sense to find ways of helping candidates to really demonstrate what they can do," she said.

Ms Bullett added that the process will be "no less rigorous".

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Tax Measures: Supplementary Information

Tax Measures: Supplementary Information ( PDF , 1.91 MB )

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Lifetime capital gains exemption, canadian entrepreneurs' incentive, capital gains inclusion rate, volunteer firefighters and search and rescue volunteers tax credits, mineral exploration tax credit, alternative minimum tax, canada child benefit, disability supports deduction, employee ownership trust tax exemption, charities and qualified donees, home buyers' plan, qualified investments for registered plans, deduction for tradespeople's travel expenses, indigenous child and family services settlement, clean electricity investment tax credit, polymetallic extraction and processing, accelerated capital cost allowance, canada carbon rebate for small businesses, interest deductibility limits – purpose-built rental housing, non-compliance with information requests, avoidance of tax debts, reportable and notifiable transactions penalty, mutual fund corporations, synthetic equity arrangements, manipulation of bankrupt status, crypto-asset reporting framework and the common reporting standard, withholding for non-resident service providers, extending gst relief to student residences, gst/hst on face masks and face shields, tobacco and vaping product taxation, fuel, alcohol, cannabis, and tobacco sales tax framework, previously announced measures, related documents.

• Notice of Ways and Means Motion to amend the Income Tax Act and the Income Tax Regulations
• Notice of Ways and Means Motion to amend the Excise Tax Act and Other Legislation
• Notice of Ways and Means Motion to amend the Excise Act , 2001 and Other Related Texts

Impacts report

Find out more about the expected gender and diversity impacts for each measure in Tax Measures: Supplementary Information

This annex provides detailed information on tax measures proposed in the Budget.

Table 1 lists these measures and provides estimates of their fiscal impact.

The annex also provides Notices of Ways and Means Motions to amend the Income Tax Act , the Excise Tax Act , the Excise Act, 2001 , the Air Travellers Security Charge Act, the Select Luxury Items Tax Act, the Underused Housing Tax Act and draft amendments to various regulations.

In this annex, all references to "Budget Day" are to be read as references to the day on which this Budget is presented.

Personal Income Tax Measures

The income tax system provides an individual with a lifetime tax exemption for capital gains realized on the disposition of qualified small business corporation shares and qualified farm or fishing property. The amount of the Lifetime Capital Gains Exemption (LCGE) is $1,016,836 in 2024 and is indexed to inflation.

Budget 2024 proposes to increase the LCGE to apply to up to $1.25 million of eligible capital gains. This measure would apply to dispositions that occur on or after June 25, 2024. Indexation of the LCGE would resume in 2026.

Budget 2024 proposes to introduce the Canadian Entrepreneurs' Incentive. This incentive would reduce the tax rate on capital gains on the disposition of qualifying shares by an eligible individual. Specifically, this incentive would provide for a capital gains inclusion rate that is one half the prevailing inclusion rate, on up to $2 million in capital gains per individual over their lifetime.

The lifetime limit would be phased in by increments of $200,000 per year, beginning on January 1, 2025, before ultimately reaching a value of $2 million by January 1, 2034.

Under the two-thirds capital gains inclusion rate proposed in Budget 2024, this measure would result in an inclusion rate of one third for qualifying dispositions. This measure would apply in addition to any available capital gains exemption.

A share of a corporation would be a qualifying share if certain conditions are met, including all the following conditions:

• At the time of sale, it was a share of the capital stock of a small business corporation (for the purposes of the Income Tax Act ) owned directly by the claimant.
• used principally in an active business carried on primarily in Canada by the Canadian-Controlled Private Corporation, or by a related corporation,
• certain shares or debts of connected corporations, or
• a combination of these two types of assets.
• The claimant was a founding investor at the time the corporation was initially capitalized and held the share for a minimum of five years prior to disposition.
• At all times since the initial share subscription until the time that is immediately before the sale of the shares, the claimant directly owned shares amounting to more than 10 per cent of the fair market value of the issued and outstanding capital stock of the corporation and giving the individual more than 10 per cent of the votes that could be cast at an annual meeting of the shareholders of the corporation.
• Throughout the five-year period immediately before the disposition of the share, the claimant must have been actively engaged on a regular, continuous, and substantial basis in the activities of the business.
• operating in the financial, insurance, real estate, food and accommodation, arts, recreation, or entertainment sector; or
• providing consulting or personal care services.
• The share must have been obtained for fair market value consideration.

Coming Into Force

This measure would apply to dispositions that occur on or after January 1, 2025.

One half of a capital gain is included in computing a taxpayer's income. This is referred to as the capital gains inclusion rate. The current one-half inclusion rate also applies to capital losses.

Budget 2024 proposes to increase the capital gains inclusion rate from one half to two thirds for corporations and trusts, and from one half to two thirds on the portion of capital gains realized in the year that exceed $250,000 for individuals, for capital gains realized on or after June 25, 2024.

The $250,000 threshold would effectively apply to capital gains realized by an individual, either directly or indirectly via a partnership or trust, net of any:

• current-year capital losses;
• capital losses of other years applied to reduce current-year capital gains; and
• capital gains in respect of which the Lifetime Capital Gains Exemption, the proposed Employee Ownership Trust Exemption or the proposed Canadian Entrepreneurs' Incentive is claimed.

Claimants of the employee stock option deduction would be provided a one-third deduction of the taxable benefit to reflect the new capital gains inclusion rate, but would be entitled to a deduction of one half the taxable benefit up to a combined limit of $250,000 for both employee stock options and capital gains.

Net capital losses of prior years would continue to be deductible against taxable capital gains in the current year by adjusting their value to reflect the inclusion rate of the capital gains being offset. This means that a capital loss realized prior to the rate change would fully offset an equivalent capital gain realized after the rate change.

For tax years that begin before and end on or after June 25, 2024, two different inclusion rates would apply. As a result, transitional rules would be required to separately identify capital gains and losses realized before the effective date (Period 1) and those realized on or after the effective date (Period 2). For example, taxpayers would be subject to the higher inclusion rate in respect of the portion of their net gains arising in Period 2 that exceed the $250,000 threshold, to the extent that these net gains are not offset by a net loss incurred in Period 1 or any other taxation years.

The annual $250,000 threshold for individuals would be fully available in 2024 (i.e., it would not be prorated) and would apply only in respect of net capital gains realized in Period 2.

Other consequential amendments would also be made to reflect the new inclusion rate. Additional design details will be released in the coming months.

The Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit allow individuals who performed at least 200 hours of combined volunteer service during the year as a volunteer firefighter or a search and rescue volunteer to claim a 15-per-cent non-refundable tax credit based on an amount of $3,000.

Budget 2024 proposes to double the credit amount for the Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit to $6,000. This would increase the maximum tax relief to $900. This enhancement would apply to the 2024 and subsequent taxation years.

Flow-through shares allow resource companies to renounce or "flow through" tax expenses associated with their Canadian exploration activities to investors, who can deduct the expenses in calculating their own taxable income. The Mineral Exploration Tax Credit provides an additional income tax benefit for individuals who invest in mining flow-through shares, which augments the tax benefits associated with the amounts that are flowed through. This tax credit provides support to junior mining companies engaged in certain grassroots mineral exploration. The tax credit is equal to 15 per cent of the specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors. The Mineral Exploration Tax Credit is legislated to expire on March 31, 2024.

As announced on March 28, the government proposes to extend eligibility for the Mineral Exploration Tax Credit for one year, to flow-through share agreements entered into on or before March 31, 2025.

Strategic Environmental Assessment Statement

Mineral exploration, as well as new mining and related processing activities that could follow from successful exploration efforts, can be associated with a variety of environmental impacts to soil, water and air and, as a result, could have an impact on the targets and actions in the Federal Sustainable Development Strategy. All such activity, however, is subject to applicable federal and provincial environmental regulations, including project-specific environmental assessments where required.

The Alternative Minimum Tax (AMT) is a parallel tax calculation that allows fewer tax credits, deductions, and exemptions than under the ordinary personal income tax rules. Taxpayers pay either regular tax or AMT, whichever is highest.

Budget 2023 announced amendments to the Income Tax Act that would change the AMT calculation. Draft legislative proposals to implement these changes were published for consultation in the summer of 2023.

Budget 2024 proposes to make further changes to the AMT proposals, as described below.

Changes to the Tax Treatment of Charitable Donations

Budget 2024 proposes that the tax treatment of charitable donations be revised to allow individuals to claim 80 per cent (instead of the previously proposed 50 per cent) of the Charitable Donation Tax Credit when calculating AMT.

Additional Amendments

Budget 2024 proposes several additional amendments to the AMT proposals. These amendments would:

• fully allow deductions for the Guaranteed Income Supplement, social assistance, and workers' compensation payments;
• allow individuals to fully claim the federal logging tax credit under the AMT;
• fully exempt Employee Ownership Trusts from the AMT; and
• allow certain disallowed credits under the AMT to be eligible for the AMT carry-forward (i.e., the federal political contribution tax credit, investment tax credits, and labour-sponsored funds tax credit).

Budget 2024 also proposes several technical amendments to the AMT legislative proposals.

Proposed Exemption for Certain Trusts for the Benefit of Indigenous Groups

Budget 2024 proposes to provide an exemption from the AMT for trusts established under:

• a law of Canada or a province if the trust is for the benefit of an Indigenous group, community, or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982 , or
• a treaty or a settlement agreement between His Majesty in right of Canada, or His Majesty in right of a province, and an Indigenous group, community, or people recognized and affirmed by section 35 of the Constitution Act, 1982 ,

provided that all or substantially all of the contributions to the trust before the end of the year are amounts paid under the law, treaty, or settlement agreement described in paragraph (a) or (b), or are reasonably traceable to those amounts ("Settlement Trusts").

An exemption from the AMT would also be provided for trusts where the beneficiaries are any combination of the following persons or entities:

• all of the members of a recognized Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982 ; 
• a public body performing a function of government in Canada (within the meaning of the Income Tax Act ) in relation to an Indigenous group, community, or people that holds rights recognized and affirmed by section 35 of the Constitution Act , 1982;
• a registered charity or a non-profit organization that is organized and operated primarily for health, education, social welfare, or community improvement for the benefit of the members of an Indigenous group, community, or people that holds rights recognized and affirmed by section 35 of the Constitution Act , 1982;
• a corporation, all of the shares or capital of which are owned by any combination of persons or entities described in paragraph (b) or (c) above, a Settlement Trust, or another corporation meeting this definition; or
• a Settlement Trust.

The government is interested in stakeholders' views on these proposed exemptions for Indigenous settlement and community trusts. Interested parties are invited to send written representations to the Department of Finance Canada, Tax Policy Branch at [email protected] by June 28, 2024.

These amendments would apply to taxation years that begin on or after January 1, 2024 (i.e., the same day as the broader AMT amendments).

The Canada Child Benefit (CCB) is an income-tested benefit that is paid monthly and provides support for eligible families with children under the age of 18. 

A CCB recipient becomes ineligible for the CCB in respect of a child the month following the child's death. To ensure benefit amounts reflect up-to-date information on family circumstances, a CCB recipient is required to notify the Canada Revenue Agency (CRA) before the end of the month following the month of their child's death. Notifications of a child's death are also provided to the CRA by provincial/territorial vital statistics agencies.

Delays in receiving notification of a child's death can result in the clawing back of CCB payments in respect of the deceased child for a few months after their death.

Budget 2024 proposes to amend the Income Tax Act to extend eligibility for the CCB in respect of a child for six months after the child's death (the "extended period"), if the individual would have otherwise been eligible for the CCB in respect of that particular child.

• For example, if a child dies in July, the child's primary caregiver would be eligible to receive the CCB in respect of this child for August through January under the proposed change, provided all eligibility criteria are met.

The CCB entitlement for each month during the extended period would be based on the age of the child in that particular month as if the child were still alive and would reflect the other family circumstances that apply in that month (e.g., marital status). CCB overpayments unrelated to the death of a child would still need to be repaid.

A CCB recipient would still be required to notify the CRA of their child's death before the end of the month following the month of their child's death to ensure that there are no overpayments after the new extended period of six months ends.

The extended period would also apply to the Child Disability Benefit, which is paid with the CCB in respect of a child eligible for the Disability Tax Credit.

This measure would be effective for deaths that occur after 2024.

The Disability Supports Deduction allows individuals who have an impairment in physical or mental functions to deduct certain expenses that enable them to earn business or employment income or to attend school.

In order for an expense to qualify, it must be specified in the Income Tax Act and a medical practitioner must either prescribe the expense or otherwise certify in writing that the expense is required.

Budget 2024 proposes to expand the list of expenses recognized under the Disability Supports Deduction, subject to the specified conditions:

• the cost of an ergonomic work chair, including related amounts paid for an ergonomic assessment to a person engaged in the business of providing such services;
• the cost of a bed positioning device, including related amounts paid for an ergonomic assessment to a person engaged in the business of providing such services; and
• the cost of purchasing a mobile computer cart.
• the cost of purchasing an alternative input device to allow the individual to use a computer; and
• the cost of purchasing a digital pen device to allow the individual to use a computer.
• Where an individual has a vision impairment, the cost of purchasing a navigation device for low vision.
• Where an individual has an impairment in mental functions, the cost of purchasing memory or organizational aids.

Budget 2024 also proposes that expenses for service animals, as defined under the Medical Expense Tax Credit rules in the Income Tax Act, be recognized under the Disability Supports Deduction. Taxpayers would be able to choose to claim an expense under either the Medical Expense Tax Credit or the Disability Supports Deduction.

This measure would apply to the 2024 and subsequent taxation years.

Budget 2023 proposed tax rules to facilitate the creation of employee ownership trusts (EOTs). These legislative proposals are currently before Parliament in Bill C-59. The 2023 Fall Economic Statement proposed to exempt the first $10 million in capital gains realized on the sale of a business to an EOT from taxation, subject to certain conditions.

Budget 2024 provides further details on the proposed exemption and conditions. 

Qualifying Conditions

The exemption would be available to an individual (other than a trust) on the sale of shares to an EOT where the following conditions are met:

• The individual, a personal trust of which the individual is a beneficiary, or a partnership in which the individual is a member, disposes of shares of a corporation that is not a professional corporation.
• The transaction is a qualifying business transfer (as defined in the proposed rules for EOTs) in which the trust acquiring the shares is not already an EOT or a similar trust with employee beneficiaries.
• the transferred shares were exclusively owned by the individual claiming the exemption, a related person, or a partnership in which the individual is a member; and
• over 50 per cent of the fair market value of the corporation's assets were used principally in an active business.
• At any time prior to the qualifying business transfer, the individual (or their spouse or common-law partner) has been actively engaged in the qualifying business on a regular and continuous basis for a minimum period of 24 months.
• Immediately after the qualifying business transfer, at least 90 per cent of the beneficiaries of the EOT must be resident in Canada.

If the above conditions are satisfied, the individual would be able to claim an exemption for up to $10 million in capital gains from the sale.

If multiple individuals disposed of shares to an EOT as part of a qualifying business transfer and met the conditions described above, they may each claim the exemption, but the total exemption in respect of the qualifying business transfer cannot exceed $10 million. The individuals would be required to agree on how to allocate the exemption.

Disqualifying Events

If a disqualifying event occurs within 36 months of the qualifying business transfer, the exemption would not be available. Where the individual has already claimed the exemption, it would be retroactively denied.

A disqualifying event would occur if an EOT loses its status as an EOT or if less than 50 per cent of the fair market value of the qualifying business' shares is attributable to assets used principally in an active business at the beginning of two consecutive taxation years of the corporation.

If the disqualifying event occurs more than 36 months after a qualifying business transfer, the EOT would be deemed to realize a capital gain equal to the total amount of exempt capital gains.  

Capital gains exempted through this measure would be subject to an inclusion rate of 30 per cent for the purposes of the alternative minimum tax, similar to the treatment for gains eligible for the lifetime capital gains exemption.

Administration

In order for an individual to claim an exemption on the sale to an EOT, the EOT (and any corporation owned by the EOT that acquired the transferred shares) and the individual would need to elect to be jointly and severally, or solidarily, liable for any tax payable by the individual as a result of the exemption being denied due to a disqualifying event within the first 36 months after a qualifying business transfer. As discussed above, following the 36-month period, the trust would be solely liable for tax realized on the deemed capital gain arising on a disqualifying event.

The normal reassessment period of an individual for a taxation year in respect of this exemption is proposed to be extended by three years.

Worker Cooperatives

Budget 2024 also proposes to expand qualifying business transfers to include the sale of shares to a worker cooperative corporation. The worker cooperative would generally need to meet the definition set out under the Canada Cooperatives Act .

Provided the relevant requirements are met, this would allow an individual to claim an exemption on selling a business to a worker cooperative.

A qualifying business transfer to a worker cooperative would also be eligible for the 10-year capital gains reserve and the 15-year exception to the shareholder loan and interest benefit rules announced in Budget 2023. 

Additional details on this aspect of the exemption will be released in the coming months.

Coming into Force

This measure would apply to qualifying dispositions of shares that occur between January 1, 2024 and December 31, 2026.

Budget 2024 proposes to amend the Income Tax Act and Income Tax Regulations to improve the operation of the rules related to registered charities and other qualified donees.

Foreign Charities Registered as Qualified Donees

The Income Tax Act allows a foreign charity to be registered as a qualified donee for a temporary 24-month period. To be eligible for registration, a foreign charity must have received a gift from His Majesty in right of Canada, and be pursuing activities relating to urgent humanitarian aid, disaster relief, or activities in the national interest of Canada.

Budget 2024 proposes to extend the period for which qualifying foreign charities are granted status as a qualified donee from 24 months to 36 months. In addition, foreign charities would be required to submit an annual information return to the Canada Revenue Agency (CRA) that includes the total amount of receipts issued to Canadian donors, the total amount of gifts received from qualified donees, and information on how those funds were used. This information would be made publicly available.

Modernizing Service

Budget 2024 proposes various amendments to the Income Tax Act to help simplify and modernize the way in which the CRA provides services and communicates information relating to registered charities and other qualified donees.

Budget 2024 proposes to permit the CRA to communicate certain official notices digitally, where the charity has opted to receive information from the CRA electronically. Registered charities that have not opted to receive information electronically would receive official notices, other than compliance-related notices, by regular mail. Those charities would continue to receive compliance-related notices, including notices of intention to revoke, annul, or suspend a charity's registration, by registered mail.

Currently, the revocation of the registration of a charity or other qualified donee is effective upon publication in the Canada Gazette. Budget 2024 proposes to remove this requirement. Instead, the revocation of registration would become effective upon the publication of an official notice of revocation on a government webpage.

Budget 2024 also proposes to remove the requirement that certain objections be addressed directly to the Assistant Commissioner of the CRA's Appeals Branch.

Donation Receipts

Registered charities and qualified donees can issue official donation receipts for gifts that they receive. The Income Tax Act and the Income Tax Regulations set out the minimum requirements for a receipt to be valid and the processes that must be followed when issuing receipts.

Budget 2024 proposes a number of changes to simplify the issuance of official donation receipts and to align the process for issuing receipts with modern practices of charities. 

Budget 2024 proposes to remove the requirement that official donation receipts contain:

• the place of issuance of the receipt;
• the name and address of the appraiser, if an appraisal of the donated property has been done; and
• the middle initial of the donor.

Budget 2024 also proposes to allow charities to mark a donation receipt as "void", as an alternative to the term "cancelled", where a receipt has been spoiled, as well as removing the requirement that it be stored with a duplicate copy.

Budget 2024 also proposes to update the regulations to expressly permit charities to issue official donation receipts electronically, provided that they contain all required information, they are issued in a secure and non-editable format, and the charity maintains an electronic copy of the receipts.

Measures relating to the extension of the registration period for foreign charities would apply to foreign charities registered after Budget Day. New reporting requirements for foreign charities would apply to taxation years beginning after Budget Day.

All remaining measures would apply upon royal assent.

The home buyers' plan (HBP) helps eligible home buyers save for a down payment by allowing them to withdraw up to $35,000 from a registered retirement savings plan (RRSP) to purchase or build their first home, or a home for a specified disabled individual, without having to pay tax on the withdrawal. Eligible home buyers purchasing a home jointly may each withdraw up to $35,000 from their own RRSP under the HBP.

Amounts withdrawn under the HBP must be repaid to an RRSP over a period not exceeding 15 years, starting the second year following the year in which a first withdrawal was made. Otherwise, amounts due for repayment within a specific year are taxable as income for that year.

Increasing the withdrawal limit

Budget 2024 proposes to increase the withdrawal limit from $35,000 to $60,000. This increase would also apply to withdrawals made for the benefit of a disabled individual.

This measure would apply to the 2024 and subsequent calendar years in respect of withdrawals made after Budget Day.

Temporary repayment relief

Budget 2024 proposes to temporarily defer the start of the 15-year repayment period by an additional three years for participants making a first withdrawal between January 1, 2022, and December 31, 2025. Accordingly, the 15-year repayment period would start the fifth year following the year in which a first withdrawal was made.

Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), Tax-Free Savings Accounts (TFSAs), Registered Education Savings Plans (RESPs), Registered Disability Savings Plans (RDSPs), First Home Savings Accounts (FHSAs), and Deferred Profit Sharing Plans (DPSPs) can invest only in qualified investments for those plans. A broad range of assets are qualified investments, including mutual funds, publicly traded securities, government and corporate bonds, and guaranteed investment certificates.

Introduced in 1966, the qualified investment rules have been incrementally expanded to include more than 40 types of assets and to reflect the introduction of new types of registered plans (including TFSAs in 2009 and FHSAs in 2023). However, this incremental approach has resulted in qualified investment rules that can be inconsistent or difficult to understand in some cases. For example:

• Different registered plans have slightly different rules for making investments in small businesses.
• Certain types of annuities are qualified investments only for RRSPs, RRIFs, and RDSPs.
• Certain pooled investment products are qualified investments only if they are registered with the Canada Revenue Agency (known as "registered investments").

Budget 2024 invites stakeholders to provide suggestions on how the qualified investment rules could be modernized on a prospective basis to improve the clarity and coherence of the registered plans regime. Specific issues under consideration include: 

• Whether and how the rules relating to investments in small businesses could be harmonized to apply consistently to all registered savings plans.
• Whether annuities that are qualified investments only for RRSPs, RRIFs, and RDSPs should continue to be qualified investments.
• Whether the conditions that certain pooled investment products must meet to be a qualified investment are appropriate, including the ongoing value of maintaining a formal registration process for registered investments.
• Whether and how qualified investment rules could promote an increase in Canadian-based investments.
• Whether crypto-backed assets are appropriate as qualified investments for registered savings plans.

Stakeholders are invited to submit comments to [email protected] by July 15, 2024.

Eligible tradespeople and apprentices in the construction industry are currently able to deduct up to $4,000 in eligible travel and relocation expenses per year by claiming the Labour Mobility Deduction for Tradespeople. A private member's bill was introduced in the 44th Parliament (Bill C-241) to enact an alternative deduction for certain travel expenses of tradespeople in the construction industry, with no cap on expenses, retroactive to the 2022 taxation year.  

Budget 2024 announces that the government will consider bringing forward amendments to the Income Tax Act to provide for a single, harmonized deduction for tradespeople's travel that respects the intent of Bill C-241.

In the First Nations Child and Family Services, Jordan's Principle, and Trout Class Settlement Agreement, approved by the Federal Court on October 24, 2023, the government committed to make best efforts to exempt the income of the trusts established under the settlement agreement from federal taxation. The government also committed to make best efforts to ensure that a class member's receipt of payments would not be considered taxable income and to ensure that federal social benefits and social assistance benefits for class members would not be negatively impacted by payments received pursuant to the settlement agreement. 

Budget 2024 proposes to amend the Income Tax Act to exclude the income of the trusts established under the First Nations Child and Family Services, Jordan's Principle, and Trout Class Settlement Agreement from taxation. This would also ensure that payments received by class members as beneficiaries of the trusts would not be included when computing income for federal income tax purposes.

Business Income Tax Measures

Budget 2023 announced a refundable Clean Electricity investment tax credit equal to 15 per cent of the capital cost of eligible property, with some additional changes announced in the 2023 Fall Economic Statement . Budget 2024 provides the design and implementation details of the tax credit.

Eligible Entities

The Clean Electricity investment tax credit would be available only to Canadian corporations. Eligible corporations would be:

• taxable Canadian corporations;
• provincial and territorial Crown corporations, subject to additional requirements (see section "Proposed Application to Provincial and Territorial Crown Corporations");
• corporations owned by municipalities;
• corporations owned by Indigenous communities; and
• pension investment corporations.

In order to receive the tax credit, corporations with a claim to immunity or exemption from tax would be required to agree to be subject to the provisions of the Income Tax Act related to the tax credit, including provisions related to audit, penalties and collections, and agree not to assert any immunity or exemption in respect of the tax credit.

Where eligible property is owned by a partnership, any partners that are corporations eligible for the credit would be allowed to claim their share of the partnership's Clean Electricity investment tax credit, subject to partnership rules generally consistent with those proposed for the Clean Technology investment tax credit currently before Parliament in Bill C-59. In cases where a property is eligible for both the Clean Electricity and Clean Technology investment tax credits, partners could claim their reasonable share of either credit for which they qualified (but could not claim both credits in respect of the same property).

Eligible Property

The following types of equipment would be eligible for the Clean Electricity investment tax credit:

• equipment used to generate electricity from solar, wind, or water energy that is described under subparagraphs (d)(ii), (iii.1), (v), (vi), or (xiv) of capital cost allowance Class 43.1 of Schedule II of the Income Tax Regulations , but hydro-electric installations would not be subject to a capacity limit as is the case for Class 43.1;
• concentrated solar energy equipment, as defined for the purposes of the proposed Clean Technology investment tax credit, but limited to equipment used to generate electricity;
• equipment used to generate electricity, or both electricity and heat, from nuclear fission, as defined for the purposes of the proposed Clean Technology investment tax credit, but without generating capacity limits or a requirement to be comprised of modules that are factory-assembled and transported pre-built to the installation site;
• equipment used for the purpose of generating electricity, or both electricity and heat, solely from geothermal energy, as described in subparagraph (d)(vii) of Class 43.1, if it is used exclusively for that purpose, but excluding any equipment that is part of a system that extracts fossil fuel for sale;
• equipment that is part of a system used to generate electricity, or both electricity and heat, from specified waste materials, as described in the 2023 Fall Economic Statement ;
• stationary electricity storage equipment that is described under subparagraph (d)(xviii) of Class 43.1 and equipment used for pumped hydroelectric energy storage that is described under subparagraph (d)(xix) of Class 43.1, but excluding equipment that uses any fossil fuel in operation;
• equipment that is part of an eligible natural gas energy system (as described below); and
• equipment and structures used for the transmission of electricity between provinces and territories (as described below).

Qualifying expenditures could include capital expenditures to refurbish existing facilities.

Electricity Generation and Cogeneration from Natural Gas with Carbon Capture

Eligible natural gas energy systems would be those that use fuel all or substantially all of which is natural gas solely to generate electricity, or both electricity and heat, and use a carbon capture system to limit emissions.

Eligible systems would be required to attain an emissions intensity no greater than 65 tonnes of carbon dioxide per gigawatt hour of energy produced, and the captured carbon dioxide would have to be stored appropriately. The proposed emissions intensity limit may not reflect the final emissions performance standard of the Clean Electricity Regulations .

When part of an integrated eligible system, eligible property would include:

• equipment that generates both electrical and heat energy (e.g., gas turbine generators);
• heat recovery equipment (e.g., heat recovery steam generators);
• electrical generating equipment (e.g., steam turbine generators);
• heat generating equipment used primarily for the purpose of producing heat energy to operate the electrical generating equipment (e.g., steam boilers used to produce steam to operate steam turbine generators); and
• carbon capture equipment, including equipment that prepares or compresses captured carbon for transportation.

Eligible property would not include buildings or other structures, heat rejection equipment (e.g., cooling towers), electrical transmission and distribution equipment, fuel handling equipment, or equipment used for carbon dioxide transportation, storage, or use.

Emissions intensity measures the average quantity of carbon dioxide emissions associated with each unit of energy output (i.e., electricity and useful heat) by dividing total carbon dioxide released into the atmosphere by total energy produced over a fixed period of time. As noted above, for a system to be eligible, the maximum allowable emissions intensity would be 65 tonnes of carbon dioxide per gigawatt hour of energy produced. The formula to calculate a system's emissions intensity for the purposes of the Clean Electricity investment tax credit would be a modified version of that used in the Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity under the Canadian Environmental Protection Act . Modifications would include:

• emissions attributable to the combustion of biomass, as defined under the Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity , would be included in the total emissions calculation; and
• emissions that are captured and stored in dedicated geological storage would be removed from the total emissions calculation. Emissions captured and used for enhanced oil recovery or other storage or use would not be removed.

Requirements for dedicated geological storage would be aligned with those proposed for the Carbon Capture, Utilization, and Storage investment tax credit currently before Parliament in Bill C-59. As a result, the geological formation for storage would need to be located in a jurisdiction with sufficient environmental laws and enforcement to ensure that carbon dioxide is permanently stored. Eligible jurisdictions for dedicated geological storage are currently proposed to include Alberta, British Columbia, and Saskatchewan.  

Natural Resources Canada would review project plans to determine equipment and system eligibility before a Clean Electricity investment tax credit claim could be made. Project plans would be required to reflect a front-end engineering design study and any other information required by the Minister of Energy and Natural Resources. Only eligible property in an integrated system with estimated emissions intensity not exceeding the maximum allowable limit would qualify.

Equipment eligibility would also need to be verified by Natural Resources Canada once the expenditures are incurred and before a claim is submitted to the Canada Revenue Agency.

Transmission of Electricity Between Provinces and Territories

Eligible interprovincial and territorial electrical transmission property would be property that is used to transmit or manage electrical energy that primarily originates in, or is destined for, another province or territory. This could include property located exclusively within a province or territory, if the property is used primarily for the purpose of interprovincial transmission. For example, transmission property installed in a province could be eligible if it became operational and began exporting electricity to another province after the completion of connected transmission property that crosses the border.

Eligible property would include:

• electrical transmission equipment (e.g., cables and switches);
• electrical transmission structures (e.g., towers and lattices); and
• related equipment used for managing traded electricity (e.g., transformers, electric power conditioning equipment, and control equipment).

Eligible property would not include buildings, electrical distribution equipment, or electrical transmission equipment rated for voltages less than 69 kilovolts.

Labour Requirements

In order to qualify for the 15-per-cent Clean Electricity investment tax credit, the proposed labour requirements currently before Parliament in Bill C-59 for prevailing wages and apprenticeships would need to be met. A 5-per-cent credit rate would be available if the labour requirements are not met.

Compliance and Recovery

Ongoing compliance with eligibility criteria.

Under the current rules for certain properties described in Class 43.1 or 43.2, all the conditions for inclusion in the Class must be satisfied on an annual basis. There is a limited exception in the  Income Tax Regulations  for property that is part of an eligible system that was previously operated in a qualifying manner. Such property is considered to be operated in the required manner during a period of deficiency, failure or shutdown of the system that is beyond the taxpayer's control if the taxpayer makes all reasonable efforts to rectify the problem within a reasonable time according to the circumstances.

As proposed in the 2023 Fall Economic Statement , similar rules would apply to the Clean Electricity investment tax credit with respect to systems that generate electricity, or both electricity and heat, from specified waste material. This would be extended to include systems that generate electricity, or both electricity and heat, from natural gas with carbon capture equipment.

Potential Repayment Obligations

The Clean Electricity investment tax credit would be subject to potential repayment obligations similar to the recapture rules proposed for the Clean Technology investment tax credit. In general, this means that over a ten-year period (or a 20-year period in the case of eligible natural gas energy systems) from the date of acquiring a particular eligible property, the tax credit could be repayable in proportion to the fair market value of the particular property when it has been converted to an ineligible use, exported from Canada, or disposed of.

Special Rules for Eligible Natural Gas Energy Systems

Systems that generate electricity, or both electricity and heat, from natural gas with carbon capture systems would be subject to a one-time verification of emissions intensity, based on a five-year compliance period.

Over the course of the five-year period, there would be a requirement to report on the emissions intensity of the energy that is produced annually by the system. At the end of the period, compliance would be assessed based on the weighted-average emissions intensity over the entire compliance period. The contribution of annual emissions intensity to the final emissions intensity would be weighted by the electricity and useful heat produced in each year.

Third-party emissions intensity verification reports would need to be submitted to Natural Resources Canada. The reports would have to be prepared by a Canadian engineering firm with an engineering certificate of authorization, appropriate insurance coverage, and expertise in auditing continuous emissions monitoring systems.

An average emissions intensity more than 5 per cent above the limit of 65 tonnes of carbon dioxide per gigawatt hour of energy produced would lead to a full recovery of the Clean Electricity investment tax credit.

After the five-year compliance period ends, there would be a requirement to continue producing emissions intensity reports annually for an additional 15 years. Over this period, an annual emissions intensity above the limit would be considered an ineligible use of the system, in accordance with the general repayment rules for this tax credit (described above under the heading Potential Repayment Obligations).

Interactions with Other Federal Tax Credits

Eligible corporations would be able to claim only one of the Clean Electricity investment tax credit, the Clean Technology investment tax credit, the Carbon Capture, Utilization, and Storage investment tax credit, the Clean Hydrogen investment tax credit, the Clean Technology Manufacturing investment tax credit and the Electric Vehicle Supply Chain investment tax credit, if a particular expenditure is eligible for more than one of these tax credits. However, multiple tax credits could be available for the same project, to the extent that the project includes expenditures eligible for different tax credits. For systems that generate electricity, or both electricity and heat, from natural gas with carbon capture, a project could not claim the Clean Electricity investment tax credit on the energy generation equipment and the Carbon Capture, Utilization, and Storage investment tax credit on the carbon capture equipment.

Eligible corporations would be able to fully benefit from both the Clean Electricity investment tax credit and the Atlantic investment tax credit with respect to the same expenditure, if the expenditure is eligible for both.

Proposed Application to Provincial and Territorial Crown Corporations

The Clean Electricity investment tax credit would be available to provincial and territorial Crown corporations only for investments made in eligible property situated in designated jurisdictions.

The federal Minister of Finance would designate a province or a territory, provided that the Minister was satisfied that the provincial or territorial government has:

• Work towards a net-zero electricity grid by 2035; and
• Provincial and territorial Crown corporations passing through the value of the Clean Electricity investment tax credit to electricity ratepayers in their province or territory to reduce ratepayers' bills.
• Directed provincial and territorial Crown corporations claiming the tax credit to publicly report annually on how the tax credit has improved ratepayers' bills.

Should a provincial or territorial Crown corporation claiming the tax credit not report annually on how the tax credit has improved ratepayers' bills, a penalty would be charged to that Crown corporation.

A provincial or territorial government would need to demonstrate that it has satisfied all of the above conditions, in order for provincial and territorial Crown corporations investing in that jurisdiction to gain access to the Clean Electricity investment tax credit. The federal Minister of Finance would then determine whether the conditions have been satisfied and, if so, would designate the province or territory.

The Department of Finance will consult with provinces and territories on the details of these conditions.

The Clean Electricity investment tax credit would apply to eligible property that is:

• acquired and becomes available for use on or after Budget Day and before 2035, provided it has not been used for any purpose before its acquisition; and
• not part of a project that began construction before March 28, 2023. For this purpose, construction would not include obtaining permits or regulatory approval, conducting environmental assessments, community consultations or impact assessment studies, or similar activities.

Similar rules would apply for eligible property acquired by provincial and territorial Crown corporations, with the following modifications:

• If a province or territorial government has satisfied all the conditions by March 31, 2025 and subsequently been designated by the Minister of Finance, then provincial and territorial Crown corporations investing in that jurisdiction would be able to access the Clean Electricity investment tax credit for property that is acquired and becomes available for use on or after Budget Day for projects that did not begin construction before March 28, 2023.
• If a provincial or territorial government has not satisfied all the conditions by March 31, 2025, then provincial and territorial Crown corporations investing in that jurisdiction would not be able to access the Clean Electricity investment tax credit until the province or territory is designated. The Clean Electricity investment tax credit would apply to property that is acquired and becomes available for use from the date when the province or territory is designated by the Minister of Finance, for projects that did not begin construction before March 28, 2023.

This measure is expected to have a positive environmental impact by encouraging investment in projects that would generally be expected to help reduce emissions of greenhouse gases and air pollutants, in support of Canada's targets set out in the Federal Sustainable Development Strategy. The measure would be expected to help Canada reach its goal of reducing greenhouse gas emissions by 40 to 45 per cent below 2005 levels by 2030 and achieving net-zero greenhouse gas emissions by 2050. It would also be expected to help Canada achieve its target of generating 90 per cent of electricity from renewable and non-emitting sources by 2030 and 100 per cent in the long term.

Positive environmental impacts could be partly offset to the extent that certain supported technologies release greenhouse gases as a result of fuel combustion, as well as particulate matter and other air pollutants that impact the environment and human health. In addition, upstream activities related to natural gas energy systems (e.g., natural gas extraction) can have negative environmental impacts, such as increased greenhouse gas emissions. However, the emissions intensity requirement of the investment tax credit ensures that only natural gas energy systems using carbon capture technology of the highest performance will be incentivized, ensuring that emissions are maximally reduced. Additionally, the combustion of waste biomass is generally viewed as carbon neutral on a lifecycle basis, and potentially carbon-negative when combined with carbon capture, utilization, and storage.

Budget 2023 proposed the Clean Technology Manufacturing investment tax credit, which would provide a refundable tax credit equal to 30 per cent of the cost of investments in eligible property used all or substantially all for eligible activities. Draft legislative proposals to implement the tax credit were released in December 2023.

As specified in the draft legislative proposals, eligible activities for the tax credit would include qualifying mineral activities producing all or substantially all qualifying materials (i.e., copper, nickel, cobalt, lithium, graphite, and rare earth elements). Qualifying mineral activities would consist of extraction; certain processing activities at mine or well sites, tailing ponds, mills, smelters, or refineries; certain recycling activities; and certain graphite activities.

Recognizing that the production of qualifying materials may occur at polymetallic projects (i.e., projects engaged in the production of multiple metals), Budget 2024 proposes adjustments to the Clean Technology Manufacturing investment tax credit to provide greater support and clarity to businesses engaged in these activities.

Use of Values

Budget 2024 proposes to clarify that the value of qualifying materials would be used as the appropriate output metric when assessing the extent to which property is used or is expected to be used for qualifying mineral activities producing qualifying materials.

"Primarily" Test for Property at Mine or Well Sites

Budget 2024 proposes to modify eligible expenditures to include investments in eligible property used in qualifying mineral activities that are expected to produce primarily qualifying materials at mine or well sites, including tailing ponds and mills located at these sites. The "primarily" test would generally mean that eligible property must be used or be expected to be used for activities in which 50 per cent or more of the financial value of the output comes from qualifying materials.

To support this expectation and a claim for the tax credit, businesses would be required to submit an attestation from an arm's-length qualified engineer or geoscientist to the Canada Revenue Agency for each relevant mine or well site.

Recapture and Safe Harbour Rule

As specified in the draft legislative proposals, where a property benefits from the tax credit and, within a ten-year period following its acquisition, is converted to a use in a non-qualifying activity (e.g., is no longer sufficiently used in qualifying mineral activities producing qualifying materials), the tax credit could be subject to recapture. For example, this could apply where the value of the materials extracted from a mine site is not primarily from qualifying materials.

To mitigate against the effects of mineral price volatility on the potential recapture of the tax credit, Budget 2024 also proposes to provide a safe harbour rule applicable to the recapture rule. Under the safe harbour rule, if the calculation of the expected production from the eligible property when claiming the tax credit is done using specified five-year historical average mineral prices, then the same specified mineral prices would be used to calculate the ratio of qualifying materials produced from the property over the ten-year recapture period. Details in respect to the design of the safe harbour rule will be provided at a later date.

The safe harbour rule would apply in respect of all qualifying mineral activities.

These changes would apply for property that is acquired and becomes available for use on or after January 1, 2024 (i.e., the same application date as the other aspects of the Clean Technology Manufacturing investment tax credit).

Increased investment in extraction and processing related to key critical minerals used in clean technologies can lead to lower prices of these minerals and technologies, which would encourage greater adoption of clean technologies in Canada, contributing to reductions in emissions of greenhouse gases and air particulates. This would help Canada meet its 2030 target of reducing total greenhouse gas emissions by 40 per cent to 45 per cent relative to 2005 levels.

However, increased extraction and mineral processing activities in Canada could negatively impact local habitats through increased soil erosion and mine runoff, increase emissions of greenhouse gases and air particulates, and increase production of industrial waste. This could offset some of the positive environmental impacts of the proposal. Also, environmental benefits in Canada could be reduced to the extent that key critical minerals and their associated technologies are exported outside of Canada.

The capital cost allowance (CCA) system determines the deductions that a business may claim each year for income tax purposes in respect of the capital cost of its depreciable property. Depreciable property is generally divided into CCA classes with each having its own rate in Schedule II to the Income Tax Regulations .

Purpose-Built Rental Housing

Currently, purpose-built rental buildings are eligible for a CCA rate of four per cent under Class 1.

Budget 2024 proposes to provide an accelerated CCA of ten per cent for new eligible purpose-built rental projects that begin construction on or after Budget Day and before January 1, 2031, and are available for use before January 1, 2036.

Consistent with eligibility under the temporary enhancement to the Goods and Services Tax (GST) New Residential Rental Property Rebate, eligible property would be new purpose-built rental housing that is a residential complex:

• with at least four private apartment units (i.e., a unit with a private kitchen, bathroom, and living areas), or 10 private rooms or suites; and
• in which at least 90 per cent of residential units are held for long-term rental.

Projects that convert existing non-residential real estate, such as an office building, into a residential complex would be eligible if the conditions above are met. The accelerated CCA would not apply to renovations of existing residential complexes. However, the cost of a new addition to an existing structure would be eligible, provided that addition meets the conditions above.

Interaction with the Accelerated Investment Incentive

Investments eligible for this measure would continue to benefit from the Accelerated Investment Incentive, which currently suspends the half-year rule, providing a CCA deduction at the full rate for eligible property put in use before 2028.

After 2027, the half-year rule would apply, which limits the CCA allowance in the year an asset is acquired to one-half of the full CCA deduction.

Productivity-Enhancing Assets

Currently, assets included in Class 44 (patents or the rights to use patented information for a limited or unlimited period), Class 46 (data network infrastructure equipment and related systems software), and Class 50 (general-purpose electronic data-processing equipment and systems software) are prescribed CCA rates of 25 per cent, 30 per cent, and 55 per cent, respectively.

Budget 2024 proposes to provide immediate expensing for new additions of property in respect of these three classes, if the property is acquired on or after Budget Day and becomes available for use before January 1, 2027. The enhanced allowance would provide a 100-per-cent first-year deduction and would be available only for the year in which the property becomes available for use.

Property that becomes available for use after 2026 and before 2028 would continue to benefit from the Accelerated Investment Incentive.

Restrictions

Property that has been used, or acquired for use, for any purpose before it is acquired by the taxpayer would be eligible for the accelerated CCA only if both of the following conditions are met:

• neither the taxpayer nor a non-arm's-length person previously owned the property; and
• the property has not been transferred to the taxpayer on a tax-deferred "rollover" basis.

Short taxation year

Under the short taxation-year rule, the amount of CCA that can be claimed in a taxation year must generally be prorated when the taxation year is less than 12 months. When this rule applies, the accelerated CCA would apply in respect of an eligible property on the same prorated basis and would not be available in the following taxation year in respect of the property.

Currently, the federal backstop pollution pricing fuel charge applies in the provinces of Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. In each of these provinces, the federal government returns more than 90 per cent of direct proceeds from the fuel charge to individuals through the Canada Carbon Rebate. Proceeds relating specifically to the use of natural gas and propane by farmers are returned to farmers via a refundable tax credit. The government has committed to return the remainder of fuel charge proceeds to Indigenous governments and small and medium-sized businesses. All direct proceeds collected are returned in their province of origin.

In respect of the government's commitment to small and medium-sized businesses, Budget 2024 proposes to return a portion of fuel charge proceeds from a province via the new Canada Carbon Rebate for Small Businesses, an automatic, refundable tax credit directly for eligible businesses, sized in proportion to the number of persons they employ in the province.

Eligible Businesses

With respect to the 2019-20 to 2023-24 fuel charge years, the tax credit would be available to a Canadian-controlled private corporation that files a tax return for its 2023 taxation year by July 15, 2024. Additionally, to be eligible for a credit in respect of an applicable fuel charge year, the corporation would need to have had no more than 499 employees throughout Canada in the calendar year in which the fuel charge year begins.

For instance, eligibility for receiving a payment in respect of the 2022-23 fuel charge year would be based on the number of persons employed by the eligible corporation for the 2022 calendar year.

Automatic Payments

Corporations would not have to apply for this tax credit. The Canada Revenue Agency would automatically determine the tax credit amount for an eligible corporation and pay the amount to the eligible corporation through the new Canada Carbon Rebate for Small Businesses.

Credit Determination

The tax credit amount in respect of an eligible corporation for an applicable fuel charge year would be determined for each applicable province in which the eligible corporation had employees in the calendar year in which the fuel charge year begins. The tax credit amount would be equal to the number of persons employed by the eligible corporation in the province in that calendar year multiplied by a payment rate specified by the Minister of Finance for the province for the corresponding fuel charge year.

The Minister of Finance will specify payment rates for the 2019-20 to 2023-24 fuel charge years once sufficient information is available from the 2023 taxation year.

The tax credit would return proceeds for future fuel charge years, including 2024-25, in a similar manner. That is, a payment rate would be specified for each applicable province for a particular fuel charge year, and a payment made to an eligible corporation that has filed a tax return for a taxation year ending in the calendar year in which the fuel charge year begins.

In response to the recommendations under Action 4 of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, Budget 2021 announced an earnings stripping measure that limits the amount of net interest and financing expenses that may be deducted by certain taxpayers in computing taxable income. Legislative proposals to implement this measure (the excessive interest and financing expenses limitation (EIFEL) rules) are currently before Parliament in Bill C-59.

The EIFEL rules provide an exemption for interest and financing expenses incurred in respect of arm's length financing for certain public-private partnership infrastructure projects.

Budget 2024 proposes expanding this exemption to also include an elective exemption for certain interest and financing expenses incurred before January 1, 2036, in respect of arm's length financing used to build or acquire eligible purpose-built rental housing in Canada. 

Consistent with eligibility under the temporary enhancement to the Goods and Services Tax (GST) New Residential Rental Property Rebate and the proposed Accelerated Capital Cost Allowance for Purpose-Built Rental Housing included in Budget 2024, eligible purpose-built rental housing would be a residential complex:

This change would apply to taxation years that begin on or after October 1, 2023 (i.e., consistent with broader EIFEL amendments).

Limits to existing information gathering powers provided to the Canada Revenue Agency (CRA) under the Income Tax Act impede the effectiveness of the CRA's compliance and enforcement actions. The 2018 Report of the Office of the Auditor General noted that the provision of information by some taxpayers lagged for months or even years, making it more difficult for the CRA to collect tax owing.

Budget 2024 proposes several amendments to the information gathering provisions in the Income Tax Act . These proposed amendments are intended to enhance the efficiency and effectiveness of tax audits and facilitate the collection of tax revenues on a timelier basis. Analogous amendments are also proposed to other federal tax statutes administered by the CRA. Budget 2024 also proposes certain technical amendments to ensure the rules meet their policy objectives.

Notice of Non-Compliance

Budget 2024 proposes to amend the Income Tax Act toallow the CRA to issue a new type of notice (referred to as a "notice of non-compliance") to a person that has not complied with a requirement or notice to provide assistance or information issued by the CRA. The issuance of a notice of non-compliance would be reviewable by the CRA on request of the person. After reconsideration, the notice of non-compliance would be vacated if the CRA determines that it was unreasonable to issue the notice of non-compliance or that the person had reasonably complied, at the time the notice of non-compliance was issued, with the initial requirement or notice. There would be a further statutory right of review by a judge of the Federal Court.

Where a notice of non-compliance related to a taxpayer has been issued to the taxpayer or a person that does not deal at arm's length with the taxpayer, the normal reassessment period for any taxation year of the taxpayer to which the notice of non-compliance relates would be extended by the period of time the notice of non-compliance is outstanding.

To further improve compliance with information requests, Budget 2024 proposes to impose a penalty on a person that has been issued a notice of non-compliance of $50 for each day that the notice is outstanding, to a maximum of $25,000. This penalty would not apply if a notice of non-compliance is ultimately vacated by the CRA or a court.

Questioning Under Oath

Budget 2024 proposes to amend the Income Tax Act to allow the CRA to include in a requirement or notice that any required information (oral or written) or documents be provided under oath or affirmation.

Compliance Orders

Currently, the CRA can obtain a compliance order from a court that directs a non-compliant taxpayer to comply with the CRA's information requests. However, the use of compliance orders has generally not been effective in compelling compliance. This is because the primary consequence for not complying is a contempt order, which is time consuming to obtain and does not generally impose a material financial cost on the taxpayer.

Budget 2024 proposes to amend the Income Tax Act to impose a penalty when the CRA obtains a compliance order against a taxpayer. The penalty would be equal to 10 per cent of the aggregate tax payable by the taxpayer in respect of the taxation year or years to which the compliance order relates. The proposed penalty, which would apply when the CRA is successful in obtaining a compliance order, would create an incentive for taxpayers to comply with the original request for information or assistance. The penalty would only be applied if the tax owing in respect of one of the taxation years to which the compliance order relates exceeds $50,000.

Budget 2024 further proposes an amendment to allow the CRA to seek a compliance order when a person has failed to comply with a requirement to provide foreign-based information or documents.

Stopping the Reassessment Limitation Clock

Under existing rules, a taxpayer may seek judicial review of a requirement or notice issued to the taxpayer by the CRA. In these circumstances, the reassessment period is extended by the amount of time it takes to dispose of the judicial review. An analogous rule applies in respect of a compliance order. These rules are intended to ensure that the CRA has the time to properly review any information obtained before expiry of the statutory reassessment period fixed by the Income Tax Act . These "stop the clock" rules currently do not apply to all situations where a taxpayer does not comply with a requirement or notice issued by the CRA.

Budget 2024 proposes to amend the stop the clock rules to provide that they apply when a taxpayer seeks judicial review of any requirement or notice issued to the taxpayer by the CRA in relation to the audit and enforcement process or during any period that a notice of non-compliance is outstanding. Analogous rules would apply where a requirement or notice has been issued to a person that does not deal at arm's length with the taxpayer.

Other Tax Statutes Administered by the CRA

Budget 2024 proposes that other tax statutes administered by the CRA, which have provisions similar to the Income Tax Act , also be amended, as needed, to address the issues discussed above. Those statutes include the Excise Tax Act (e.g., GST/HST, fuel excise tax), Air Travellers Security Charge Act , Excise Act, 2001 (alcohol, tobacco, cannabis, and vaping duties), the Underused Housing Tax Act , and the Select Luxury Items Tax Act .

These amendments would come into force on royal assent of the enacting legislation.

The Income Tax Act includes an anti-avoidance rule that is intended to prevent taxpayers from avoiding paying their tax liabilities by transferring their assets to non-arm's length persons. The effect of this tax debt avoidance rule is to make the transferee jointly and severally, or solidarily, liable with the transferor for the transferor's tax debts, to the extent that the value of the property transferred exceeds the amount of consideration given by the transferee for the property.

The Income Tax Act contains a number of rules that address various planning techniques employed by taxpayers in an attempt to circumvent the tax debt avoidance rule, as well as a penalty for those who engage in, participate in, assent to, or acquiesce in planning activity that they know, or would reasonably be expected to know, is tax debt avoidance planning.

Some taxpayers continue to engage in planning that is intended to circumvent the tax debt avoidance rule, often with the assistance of a planner who receives a significant fee that is effectively funded by a portion of the avoided tax debt.

Although this planning can be challenged by the government based on existing rules in the Income Tax Act , these challenges can be both time-consuming and costly. As a result, the government is proposing a specific legislative measure.

Budget 2024 proposes to introduce a supplementary rule to strengthen the tax debt anti-avoidance rule. This rule would apply in the following circumstances:

• there has been a transfer of property from a tax debtor to another person;
• as part of the same transaction or series of transactions, there has been a separate transfer of property from a person other than the tax debtor to a transferee that does not deal at arm's length with the tax debtor; and
• one of the purposes of the transaction or series is to avoid joint and several, or solidary, liability.

Where these conditions are met, the property transferred by the tax debtor would be deemed to have been transferred to the transferee for the purposes of the tax debt avoidance rule. This would ensure that the tax debt avoidance rule applies in situations where property has been transferred from a tax debtor to a person and, as part of the same transaction or series, property has been received by a non-arm's length person. 

The Income Tax Act contains a penalty for those who engage in, participate in, assent to, or acquiesce in planning activity that they know, or would reasonably be expected to know, is tax debt avoidance planning. The penalty is equal to the lesser of:

• 50 per cent of the tax that is attempted to be avoided; and
• $100,000 plus any amount the person, or a related person, is entitled to receive or obtain in respect of the planning activity.

Budget 2024 proposes to extend this penalty to tax debt avoidance planning that is subject to the proposed supplementary rule.

Expanded Joint and Several, or Solidary, Liability

As noted above, in many cases tax debt avoidance planning is facilitated by a planner who receives a significant fee that is effectively funded by a portion of the avoided tax debt. The courts have held that a taxpayer who engages in tax debt avoidance planning is normally not jointly and severally, or solidarily, liable for the portion of the tax debt that has effectively been retained by the planner as a fee. This remains the case even where the amount retained by the planner is moved offshore and out of the reach of the Canada Revenue Agency.

To further enhance the effectiveness of the tax debt anti-avoidance rule, Budget 2024 proposes that taxpayers who participate in tax debt avoidance planning be jointly and severally, or solidarily, liable for the full amount of the avoided tax debt, including any portion that has effectively been retained by the planner.

Similar Statutes

Similar amendments would be made to comparable provisions in other federal statutes (e.g., the Excise Tax Act , the Excise Act, 2001 , the Select Luxury Items Tax Act , and the Underused Housing Tax Act ).

These measures would apply to transactions or series of transactions that occur on or after Budget Day.

The Income Tax Act includes a general provision that provides that a person who fails to file or make a return or comply with certain specified rules is guilty of an offence, and liable to penalties up to $25,000 and imprisonment up to a year. The mandatory disclosure rules in the Income Tax Act also include specific penalties that apply in these circumstances, making the application of this general penalty provision unnecessary.

Budget 2024 announces the government's intention to remove from the scope of this general penalty provision the failure to file an information return in respect of a reportable or notifiable transaction under the mandatory disclosure rules.

This amendment would be deemed to have come into force on June 22, 2023.

A mutual fund is a type of investment vehicle that allows investors to pool their money and invest in a portfolio of investments without purchasing the investments directly. A mutual fund corporation is a mutual fund organized as a corporation that meets certain conditions set out in the Income Tax Act.

The Income Tax Act includes special rules for mutual fund corporations that facilitate conduit treatment for investors (shareholders). For example, these rules generally allow capital gains realized by a mutual fund corporation to be treated as capital gains realized by its investors. In addition, a mutual fund corporation is not subject to mark-to-market taxation and can elect capital gains treatment on the disposition of Canadian securities.

To qualify as a mutual fund corporation under the Income Tax Act , a corporation must satisfy several conditions, including that the corporation is a "public corporation", which may be satisfied where a class of shares of the corporation is listed on a designated stock exchange in Canada. These conditions are premised on the idea of a mutual fund corporation being widely held. However, a corporation controlled by a corporate group may qualify as a mutual fund corporation even though it is not widely held.

A corporation can qualify as a mutual fund corporation under the Income Tax Act if a class of its shares is listed on a designated stock exchange in Canada, even if all other shares of the corporation are held by a corporate group and those shares represent all or substantially all of the fair market value of the issued shares of the corporation. This could allow a corporate group to use a mutual fund corporation to benefit from the special rules available to these corporations in an unintended manner .

Although using a mutual fund corporation to defer or avoid income taxes by a corporate group can be challenged by the government based on existing rules in the Income Tax Act , these challenges can be both time-consuming and costly.

Budget 2024 proposes amendments to the Income Tax Act to preclude a corporation from qualifying as a mutual fund corporation where it is controlled by or for the benefit of a corporate group (including a corporate group that consists of any combination of corporations, individuals, trusts, and partnerships that do not deal with each other at arm's length). Exceptions would be provided to ensure that the measure does not adversely affect mutual fund corporations that are widely held pooled investment vehicles.

This measure would apply to taxation years that begin after 2024.

The  Income Tax Act  allows a corporation to deduct the amount of any dividends received on a share of a corporation resident in Canada, subject to certain limitations.

One of these limitations is an anti-avoidance rule that denies the dividend received deduction in respect of synthetic equity arrangements. Synthetic equity arrangements include agreements that provide all or substantially all of the risk of loss and opportunity for gain or profit (the "economic exposure") in respect of a share to another person.

Where a taxpayer enters into a synthetic equity arrangement in respect of a share, the taxpayer is generally obligated to compensate the other person for the amount of any dividends paid on the share. This compensation payment may result in a tax deduction for the taxpayer in addition to the dividend received deduction. Unless the anti-avoidance rule applies to deny the dividend received deduction, a tax loss would generally arise as a result of the two deductions.

The anti-avoidance rule incorporates certain exceptions, including where the taxpayer establishes that no tax-indifferent investor has all or substantially all of the economic exposure in respect of the share. An associated exception is also available for synthetic equity arrangements traded on a derivatives exchange. 

Budget 2024 proposes to remove the tax-indifferent investor exception (including the exchange traded exception) to the anti-avoidance rule. This measure would simplify the anti-avoidance rule and prevent taxpayers from claiming the dividend received deduction for dividends received on a share in respect of which there is a synthetic equity arrangement.

This measure would apply to dividends received on or after January 1, 2025.

Under the Income Tax Act , losses and other tax attributes that arise from expenditures for which a taxpayer did not ultimately bear the cost are generally not recognized. The Income Tax Act contains a set of debt forgiveness rules that apply where a commercial debt is settled for less than its principal amount. These rules generally reduce tax attributes by the amount of debt that is forgiven and, where tax attributes have been fully reduced, the rules cause an income inclusion equal to half of the remaining forgiven amount. The Act also contains a rule that entitles an insolvent corporation to a corresponding deduction to offset all or part of an income inclusion from the debt forgiveness rules.

Bankrupt taxpayers are generally excluded from these debt forgiveness rules. Instead, a separate loss restriction rule applies to extinguish the losses of bankrupt corporations that have received an absolute order of discharge.   

Some taxpayers have sought to manipulate the bankrupt status of an insolvent corporation, with a view to benefiting from the exception in the debt forgiveness rules while also avoiding the loss restriction rule applicable to bankrupt corporations. This planning seeks to preserve the losses and other tax attributes of the insolvent corporation (which would otherwise be eliminated upon the forgiveness of its debts) for their acquisition and use in avoiding corporate income tax by a profitable corporation.

Although the manipulation of bankrupt status can be challenged by the government based on existing rules in the Income Tax Act , these challenges can be both time-consuming and costly. As a result, the government is proposing a specific legislative measure.

Budget 2024 proposes to repeal the exception to the debt forgiveness rules for bankrupt corporations and the loss restriction rule applicable to bankrupt corporations. This change would subject bankrupt corporations to the general rules that apply to other corporations whose commercial debts are forgiven. The bankruptcy exception to the debt forgiveness rules would remain in place for individuals. While bankrupt corporations would be subject to the reduction of their loss carryforward balances and other tax attributes upon debt forgiveness, as insolvent corporations they could qualify for relief from the debt forgiveness income inclusion rule provided under the existing deduction for insolvent corporations.

These proposals would apply to bankruptcy proceedings that are commenced on or after Budget Day.

International Tax Measures

Exchange of tax information between national revenue agencies is an important tool for combating offshore tax evasion. The Common Reporting Standard (CRS) is the global standard developed and endorsed by the Organization for Economic Cooperation and Development (OECD) for the automatic exchange of financial information for tax purposes. Under Canada's implementation of the CRS in the Income Tax Act , Canadian financial institutions report to the Canada Revenue Agency information on financial accounts held in Canada by non-residents. The Canada Revenue Agency shares this information with foreign tax authorities. In exchange, Canada receives information on financial accounts held by Canadian residents outside of Canada.

Crypto-Asset Reporting Framework

Since the implementation of the CRS, financial markets have continued to evolve. One major development is the emergence of crypto-assets (including stablecoins, derivatives issued in the form of a crypto-asset, and certain non-fungible tokens), which can be transferred or held without interacting with traditional financial intermediaries and do not need to be reported under the CRS. To ensure appropriate reporting, the OECD has developed a new framework (referred to as the Crypto-Asset Reporting Framework, or CARF) that provides for the automatic exchange of tax information in relation to transactions in crypto-assets.

Budget 2024 proposes to implement the CARF in Canada. The measure would impose a new annual reporting requirement in the Income Tax Act on entities and individuals (referred to as crypto-asset service providers) that are resident in Canada, or that carry on business in Canada, and that provide business services effectuating exchange transactions in crypto-assets. This would include crypto exchanges, crypto-asset brokers and dealers, and operators of crypto-asset automated teller machines.

Crypto-asset service providers would be required to report to the Canada Revenue Agency, in respect of each customer and in respect of each crypto-asset, the annual value of:

• exchanges between the crypto-asset and fiat currencies;
• exchanges for other crypto-assets; and
• transfers of the crypto-asset, including the requirement to report information in respect of a customer of a merchant where the crypto-asset service provider processes payments on behalf of the merchant and the customer has transferred crypto-assets to the merchant in exchange for goods or services with a value exceeding US$50,000.

Reportable crypto-assets would exclude central bank digital currencies and specified electronic money products (e.g., digital representations of fiat currencies), which would be reportable under the amendments to the CRS described below.

In addition to information on crypto-asset transactions, crypto-asset service providers would be required to obtain and report information on each of their customers, including name, address, date of birth, jurisdiction(s) of residence, and taxpayer identification numbers for each jurisdiction of residence. If a customer is a corporation or other legal entity, the same information would need to be collected and reported in respect of the natural persons who exercise control over the entity. Reporting would be required with respect to both Canadian resident and non-resident customers.

Common Reporting Standard

Budget 2024 also proposes to implement amendments to the CRS that have been endorsed by the OECD in connection with the CARF. The changes would broaden the scope of the CRS to include specified electronic money products and central bank digital currencies which are not covered by the CARF. The amendments would also ensure effective coordination between the CRS and the CARF and limit instances of duplicative reporting between the two frameworks. Other changes would require that additional information be reported in respect of financial accounts and account holders and would strengthen the due diligence procedures financial institutions are required to follow.

In response to recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes, Budget 2024 proposes two other changes to the CRS.

• First, the CRS would be amended to remove Labour-Sponsored Venture Capital Corporations (LSVCCs) from the list of non-reporting financial institutions and treat a non-registered account held in an LSVCC as an excluded account provided that annual contributions to the account do not exceed US$50,000. This would generally extend the same treatment to non-registered accounts currently available to registered accounts, e.g., Registered Retirement Savings Plans, which already qualify as excluded accounts. Due diligence and reporting requirements do not apply in respect of excluded accounts.
• Second, the anti-avoidance provision of the CRS would be amended to clarify that it applies when an individual or any entity enters into an arrangement or engages in a practice, if it can reasonably be considered that the primary purpose is to avoid an obligation of any person under the CRS.

These measures would apply to the 2026 and subsequent calendar years. This would allow the first reporting and exchange of information under the CARF and amended CRS to take place in 2027 with respect to the 2026 calendar year.

Existing income tax rules require a person who pays a non-resident for services provided in Canada to withhold 15 per cent of the payment and remit it to the Canada Revenue Agency (CRA). This acts as a pre-payment of any Canadian tax that the non-resident may ultimately owe. Canada generally taxes non-residents on their income from carrying on business in Canada. However, many non-resident service providers do not ultimately owe Canadian tax either because they do not have a permanent establishment in Canada under an applicable tax treaty, or because the service is international shipping or operating an aircraft in international traffic, both of which are generally exempt from Canadian tax.

Non-resident service providers with no Canadian tax liability may apply to the CRA for an advance waiver of the withholding requirement for a specific planned transaction. Alternatively, they may apply for a refund of the withheld amounts. However, many non-resident service providers instead pass the cost of the withholding requirement on to the payors. This increases costs for Canadians.

Budget 2024 proposes to provide the CRA with the legislative authority to waive the withholding requirement, over a specified period, for payments to a non-resident service provider if either of the following conditions are met:

• the non-resident would not be subject to Canadian income tax in respect of the payments because of a tax treaty between its country of residence and Canada; or
• the income from providing the services is exempt income from international shipping or from operating an aircraft in international traffic.

This proposal would allow the CRA to waive the withholding requirement on multiple transactions with a single waiver, subject to any conditions and information requirements necessary to reduce compliance risks.

This measure would come into force on royal assent of the enacting legislation.

Sales and Excise Tax Measures

On September 14, 2023, the government announced that it would temporarily remove the Goods and Services Tax (GST) from new purpose-built rental housing projects, such as apartment buildings, student housing, and senior residences built specifically for long-term rental accommodation.

The removal of the GST is being implemented through an Enhanced (100-per-cent) GST Rental Rebate for new qualifying purpose-built rental housing projects.

Qualifying purpose-built rental housing units include those that are part of a residential complex

• that contains at least four private apartment units or at least 10 private rooms or suites; and
• in which all or substantially all of the residential units meet the conditions for the existing GST Rental Rebate.

The Enhanced GST Rental Rebate applies to projects that begin construction after September 13, 2023 and before 2031, and that complete construction before 2036.

Universities, Public Colleges, and School Authorities

Under the existing GST/Harmonized Sales Tax (HST) rules in the Excise Tax Act , universities, public colleges, and school authorities are not eligible for a GST Rental Rebate in respect of new student housing they provide. This is due to the often temporary nature of student residences and the special GST/HST rules that apply to these entities.

Rental Rebate Conditions

One of the main eligibility conditions for a GST Rental Rebate is that the unit is for long-term rental. In this regard, the Excise Tax Act generally requires that the unit's first use be as the primary place of residence for an individual under a lease for a period of at least 12 months. However, many universities, public colleges, and school authorities would likely not meet this condition in respect of traditional student residences due to the more temporary nature of the housing.

Special GST Rules

When universities, public colleges, and school authorities build a new residence for their students, they are not subject to the normal GST/HST rules for builders, which require tax to be paid on the final value of a newly constructed residential complex. Instead, they are subject to a special set of relieving GST/HST rules under which they only incur GST/HST on their construction inputs. However, because of this, there is no final tax amount, which is the amount on which the GST Rental Rebates are based.

Proposed Modifications

To ensure that universities, public colleges, and school authorities can claim the Enhanced (100-per-cent) GST Rental Rebate, Budget 2024 proposes to modify the Excise Tax Act to allow them to apply the normal GST/HST rules that apply to other builders (i.e., paying GST/HST on the final value of the building) in respect of new student housing projects.

Additionally, Budget 2024 proposes to amend the Excise Tax Act and its regulations to relax the rebate conditions for new student housing provided by universities, public colleges, and school authorities that operate on a not-for-profit basis. These are generally educational institutions that would currently qualify for the Public Service Body rebates under the GST/HST.

The relaxed rebate conditions would allow these entities to claim the 100-per-cent rebate in respect of any new student residence that they acquire or construct provided it is primarily for the purpose of providing a place of residence for their students. That is, it would no longer be necessary that the first use of a unit in the student housing project be as a primary place of residence of an individual under a lease for a period of at least 12 months.

The relaxed rebate conditions would not be extended to universities, public colleges, and school authorities that operate on a for-profit basis.

The proposed measures would apply to student residences that begin construction after September 13, 2023 and before 2031, and that complete construction before 2036.

Budget 2024 proposes to amend the Excise Tax Act to repeal the temporary zero-rating of certain face masks or respirators and certain face shields under the GST/HST. The temporary relief announced in the 2020 Fall Economic Statement was proposed to be in effect until the use of face coverings was no longer broadly recommended by public health officials for the COVID-19 pandemic.

This measure would apply to supplies made on or after May 1, 2024.

Excise Duty on Tobacco

Budget 2024 announces the Government's intention to increase the tobacco excise duty rate by $4 per carton of 200 cigarettes (i.e., for a total of $5.49 including the automatic inflationary adjustment of $1.49 per carton of 200 cigarettes that took effect on April 1, 2024), along with corresponding increases to the excise duty rates for other tobacco products outlined in Table 2.

Inventories of cigarettes held by certain manufacturers, importers, wholesalers and retailers at the beginning of the day after Budget Day would be subject to an inventory tax of $0.02 per cigarette (subject to certain exemptions) to account for the $4 increase. Taxpayers would have until June 30, 2024 to file a return and pay the cigarette inventory tax.

This measure would come into force on the day after Budget Day.

Importation Limit for Packaged Raw Leaf Tobacco for Personal Use

Currently under the Excise Act, 2001 , no one is allowed to possess or import unstamped tobacco products unless an exemption applies. One of the exemptions is that the products are imported for personal use in quantities not in excess of prescribed limits (e.g., five cartons of cigarettes). There is currently no limit on importation of packaged raw leaf tobacco for personal use.

Budget 2024 proposes to provide a new prescribed limit of up to 2500 grams of packaged raw leaf tobacco for importation for personal use. Consequential to the imposition of the new importation limit, Budget 2024 also proposes to amend the definition of "packaged" for raw leaf tobacco to ensure the proper enforcement of the new limit for importation, and to better reflect current business practices.

This measure would come into force on the first day of the month following royal assent to the enabling legislation.

Process for Prescribing Tobacco Products

Brands of tobacco products that are destined for the export market must be prescribed by regulation before the products can be exported without markings and the imposition of a special excise duty. Applications need to be made to the Canada Revenue Agency for eligibility assessments, and the Canada Revenue Agency would in turn recommend qualifying brands for prescription through the regulatory process.

To improve the administration of the current process, Budget 2024 proposes to replace the prescription through the regulatory process with an authorization for the Minister of National Revenue to specify the brands of tobacco products for export that are exempted from the special excise duty and marking requirement.

Requiring Information Returns from Tobacco Prescribed Persons

Persons that are prescribed by regulation (i.e., "prescribed persons") may be issued excise stamps for either tobacco products or vaping products, stamps they may then provide to overseas manufacturers of those products to allow the eventual importation of stamped products into Canada. Generally, prescribed persons do not manufacture tobacco or vaping products in Canada, and excise duties are paid once the products are imported into Canada.

Prescribed persons that are issued vaping excise stamps are currently required to file information returns each month, but the same requirement does not apply to prescribed persons that are issued tobacco excise stamps.

To improve controls and accountability for tobacco excise stamps, Budget 2024 proposes to require tobacco prescribed persons to file information returns for tobacco excise stamps.

Excise Duty on Vaping Products

Budget 2024 announces the Government's intention to increase the vaping product excise duty rate as outlined in Table 3.

This proposed increase would also apply to the additional duty imposed in respect of participating jurisdictions under the coordinated vaping product taxation framework. This measure would come into force on July 1, 2024; i.e., the same day as the effective date for the introduction of the coordinated vaping product taxation regime for Ontario, Quebec, the Northwest Territories, and Nunavut.

Sharing of Confidential Information

Currently, under the Excise Act, 2001 , the Canada Revenue Agency is allowed to share confidential information for the purposes of administration or enforcement of the Cannabis Act .

To enhance collaboration between the Canada Revenue Agency and Health Canada in their respective responsibilities with regard to tobacco and vaping products, Budget 2024 proposes to amend the Excise Act, 2001 to allow the Canada Revenue Agency to share confidential information for the purposes of the administration or enforcement of the Tobacco and Vaping Products Act .

This measure would come into force upon royal assent to the enabling legislation.

Other Tax Measures

The First Nations Goods and Services Tax Act provides a legislative framework for interested Indigenous governments to levy broad-based value-added taxes, referred to as the First Nations Goods and Services Tax (FNGST), that are fully harmonized with the federal Goods and Services Tax (GST) or federal component of Harmonized Sales Tax (HST), including applying at the same rate (five per cent).

Budget 2024 proposes to amend the First Nations Goods and Services Tax Act to provide additional flexibility to Indigenous governments seeking to exercise tax jurisdiction on their lands. Specifically, the amendments would enable Indigenous governments to enact a value-added sales tax, under their own laws, on fuel, alcohol, cannabis, tobacco, and vaping (FACT) products within their reserves or settlement lands. The FACT sales tax would be analogous to the FNGST, including applying at the same five per cent GST rate, but would be limited to fuel, alcohol, cannabis, tobacco, and vaping products.

Indigenous governments would have the choice to levy FACT sales taxes and would have the flexibility to choose which FACT product(s) to tax. These taxes would be implemented through negotiated tax administration agreements between the federal government and interested Indigenous governments. FACT sales taxes would apply to all persons buying the taxed FACT products sold on the lands of an opt-in Indigenous government. On products for which an Indigenous FACT sales tax applies, the federal GST, or federal component of HST, would not apply.

Among other administrative matters, tax administration agreements would include provisions for the appropriate sharing of tax room between Indigenous governments and Canada in circumstances where Indigenous government FACT revenues are generated primarily from persons who would otherwise pay the federal GST or federal component of HST.

The government intends to propose amendments to the First Nations Goods and Services Tax Act to enable FACT sales taxes and streamline administration of taxes under that Act. Additional engagement and negotiation of tax administration agreements would be required prior to implementation of value-added FACT taxes by interested Indigenous governments.

Budget 2024 confirms the government's intention to proceed with the following previously announced tax and related measures, as modified to take into account consultations, deliberations, and legislative developments, since their release.

• Legislative proposals released on March 9, 2024, to extend by two years the two per cent cap on the inflation adjustment on beer, spirit, and wine excise duties, and to cut by half for two years the excise duty rate on the first 15,000 hectolitres of beer brewed in Canada.
• The Clean Hydrogen investment tax credit;
• The Clean Technology Manufacturing investment tax credit;
• Concessional Loans;
• Short-Term Rentals;
• Vaping Excise Duties; and
• International Shipping.
• The Canadian journalism labour tax credit;
• Proposed expansion of eligibility for the Clean Technology and Clean Electricity investments tax credits to support generation of electricity and heat from waste biomass;
• The addition of psychotherapists and counselling therapists to the list of health care practitioners whose professional services rendered to individuals are exempt from the Goods and Services Tax/Harmonized Sales Tax (GST/HST);
• Proposals relating to the GST/HST joint venture election rules;
• The application of the enhanced (100-per-cent) GST Rental Rebate to qualifying co-operative housing corporations; and
• Proposals relating to the Underused Housing Tax.
• Regulatory proposals released on November 3, 2023, to temporarily pause the federal fuel charge on deliveries of heating oil.
• Legislative and regulatory amendments to implement the enhanced (100-per-cent) GST Rental Rebate for purpose-built rental housing announced on September 14, 2023.
• The Carbon Capture, Utilization, and Storage investment tax credit;
• The Clean Technology investment tax credit;
• Labour Requirements Related to Certain investment tax credits;
• Enhancing the Reduced Tax Rates for Zero-Emission Technology Manufacturers;
• Flow-Through Shares and the Critical Mineral Exploration Tax Credit – Lithium from Brines;
• Employee Ownership Trusts;
• Retirement Compensation Arrangements;
• Strengthening the Intergenerational Business Transfer Framework;
• The Income Tax and GST/HST Treatment of Credit Unions;
• The Alternative Minimum Tax for High-Income Individuals;
• A Tax on Repurchases of Equity;
• Modernizing the General Anti-Avoidance Rule;
• Global Minimum Tax (Pillar Two);
• Digital Services Tax;
• Technical amendments to GST/HST rules for financial institutions;
• Providing relief in relation to the GST/HST treatment of payment card clearing services;
• Enhancements to the vaping product taxation framework;
• Tax-exempt sales of motive fuels for export;
• Excessive Interest and Financing Expenses Limitations;
• Extending the quarterly duty remittance option to all licensed cannabis producers;
• Revised Luxury Tax draft regulations to provide greater clarity on the tax treatment of luxury items; and
• Technical tax amendments to the  Income Tax Act  and the  Income Tax Regulations .
• Legislative amendments to implement changes discussed in the transfer pricing consultation paper released on June 6, 2023.
• Tax measures announced in Budget 2023, including the Dividend Received Deduction by Financial Institutions.
• Substantive Canadian-Controlled Private Corporations;
• Technical amendments to the  Income Tax Act  and  Income Tax Regulations ; and
• Remaining legislative and regulatory proposals relating to the GST/HST, excise levies and other taxes and charges announced in the August 9, 2022 release.
• Legislative amendments to implement the Hybrid Mismatch Arrangements rules announced in Budget 2021.
• Legislative proposals released in Budget 2021 with respect to the Rebate of Excise Tax for Goods Purchased by Provinces.
• Regulatory proposals released in Budget 2021 related to information requirements to support input tax credit claims under the GST/HST.
• The income tax measure announced on December 20, 2019, to extend the maturation period of amateur athlete trusts maturing in 2019 by one year, from eight years to nine years.

Budget 2024 also reaffirms the government's commitment to move forward as required with other technical amendments to improve the certainty and integrity of the tax system.

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