The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed interest rate for leasing for the month of February 2024 will be 4.00%.
The prescribed interest rate for leasing rules must be calculated on a monthly basis.
The rate is based on the average yield of the monthly series of Government of Canada marketable bonds over 10 years (section 4302 of the Income Tax Regulations). The rate for the upcoming month uses the average yield from the second preceding month plus “1.”
You can calculate the rate for the upcoming month using the following steps:
- Go to the Bank of Canada’s Canadian Bond Yields: 10-Year Lookup
- Under “Specific Date or Range,” select “Quick Date,” and select “5 months” from the dropdown option for monthly series
- Under “Search Criteria,” go to the “Government of Canada marketable bonds, average yield” table. Select the “Monthly” column’s bond issue in the “over 10 years” row
- Click “Submit” at the bottom of the page
- Make sure the date is correct when the average yield for the second preceding month appears
- Take the average yield and add “1” to determine the leasing rate for the upcoming month
If you would like help with dealing with the CRA or would like to know more about taxable benefits, please feel free to call us at (905) 305-9722 or email us at info@eigenmachtcrackower.com and we will help you out!
