Prince Edward Island 2025 Budget Highlights
Prince Edward Island 2025 Budget Highlights
Prince Edward Island Minister of Finance Jill Burridge tabled the province’s 2025 budget on Thursday, April 10, 2025.
Prince Edward Island Minister of Finance Jill Burridge tabled the province’s 2025 budget on Thursday, April 10, 2025. This year’s budget aims to secure the economy, strengthen healthcare, build opportunity for workers, invest in infrastructure, and support communities.
Personal income tax measures
Basic personal amount and tax brackets
The basic personal exemption will increase to $14,650 for 2025 (from $14,250). Beginning January 1, 2026, the personal exemption will be further increased to $15,000, alongside an increase to all five marginal income tax brackets by 1.8 percent.
As a result, the proposed personal income tax bracket and rates beginning in 2026 are as follows:
| From | To | Rate |
|---|---|---|
| $0 | $33,928 | 9.50% |
| $33,929 | $65,820 | 13.47% |
| $65,821 | $106,890 | 16.60% |
| $106,891 | $142,520 | 17.62% |
| $142,521 | Above | 19.00% |
Other personal income tax credits
The budget announced increases for 2025 to the spouse or common-law partner amount and the related income threshold to $12,443 (from $12,103) and $1,244 (from $1,210), respectively. These amounts will increase again in 2026 to $12,740 and $1,274, respectively.
The low-income tax reduction threshold will also increase in 2025 to $22,650 (from $22,250) and again in 2026 to $23,000.
Business income tax measures
Small business limit and corporate tax rate
The budget proposes to increase the small business threshold to $600,000 (from $500,000) and lower the general corporate tax rate by one percent to 15 percent, effective July 1, 2025.
Once this measure is enacted, the expected corporate income tax rates are as follows:
| Area | Small Business Corporation Rate* | Small Business Corporation Threshold | General Corporation Non-M&P Rate | General Corporation M&P Rate* |
|---|---|---|---|---|
| Federal | 9.0% | $500,000 | 15.0% | 15.0% |
| Prince Edward Island | 1.0% | $600,000 | 15.0% | 15.0% |
| Combined | 10% | - | 30.0% | 30.0% |
M&P – Manufacturing & Processing
* Rates applicable to income not eligible for the temporary rate reduction for manufacturers of qualifying zero-emission technology.
Other tax measures
Real property Transfer Tax
Effective April 28, 2025, the budget proposes to increase the property transfer tax rate to two percent (from one percent) on general properties that exceed a new $1,000,000 threshold. Further, the budget proposes to extend this increased rate of two percent to real property purchased by first-time homebuyers that exceed the $1,000,000 threshold so that the current exemption will effectively no longer apply.
The budget included no further details on this proposed change.
Tobacco Tax
The budget proposes to increase the tobacco tax to $0.30 per cigarette (from $0.2952), effective April 28, 2025.
More details and highlights of the 2025 Prince Edward Island budget can be found here.
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