Capital gains tax in Canada, explained + MORE Jan 31st

Capital gains tax highlights

Investors can sigh relief for the 2024 tax year. Despite the capital gains inclusion rate being changed as of June 25, 2024, it has since been delayed until 2026 by the Department of Finance Canada. Here’s what is proposed. For individuals, the inclusion rate is either 50% or 66.67%, depending on the size of the capital gain.

With the current federal and provincial/territorial tax rates in Canada, no one pays more than 27% capital gains tax on gains of under $250,000.

You can reduce the amount of capital gains tax you owe by holding your investments in registered accounts, offsetting capital gains with capital losses and claiming the principal residence exemption.

Selling high-performing stocks or a cottage property can reap significant profits, and those moments are worth celebrating. But while you’re enjoying the spoils of your investments, keep in mind that you’ll eventually have to pay tax on them. In Canada, most gains on capital assets are taxed…

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Capital gains. Even the mention of these two words together can immediately conjure myths about owing the government 50% of the money earned from selling a home. But, like most rumours, it’s only half true—for now. You may have also heard that Budget 2024, the Canadian federal government introduced an increase on certain capital gains. That’s 100% true—for a brief while.

Capital Gains Tax News
The federal government says it is deferring the implementation of a hike to the capital gains inclusion rate to next year.The deferral moves back the implementation of the change from June 25, 2024 to January 1, 2026.

The deferral offers a reprieve for Canadians and businesses who were seeking clarity as the tax deadline nears. The hike is meant to raise the portion of capital gains on which companies pay tax to two-thirds from one-half. The policy would also apply to individuals with capital gains earnings above $250,000.

While the hike was proposed in the Liberals’ latest federal budget and introduced later as a ways and means motion, it hasn’t passed in Parliament, which is prorogued until March 24…

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