Posted on: May 2024
As a homeowner or real estate investor in Canada, staying informed about changing tax laws is crucial, especially when those changes could impact your bottom line. The federal government's 2024 budget has proposed changes to the capital gains tax that might affect you if you're considering selling a property.
What’s Changing?
The proposed change involves increasing the inclusion rate for capital gains from 50% to 66.67% for any gains realized after June 24, 2024​ (Global News)​. This means that for any capital gains above $250,000 for individuals, and for all capital gains for corporations and trusts, the taxable portion will increase.
Why Does This Matter?
If you own an investment property, a second home, or are planning to sell your business, this change could impact the amount of tax you'll owe on the sale. By acting before June 30th, you could potentially avoid this higher tax rate. "Canadian Capital Gains Tax" will most likely affect sellers with investment, commercial, or recreational properties.
How Does It Work?
For individuals, the new inclusion rate will apply to the portion of capital gains realized after June 24, 2024, in excess of an annual $250,000 threshold​ (RBC Royal Bank)​. For corporations and trusts, the higher inclusion rate applies to all capital gains.
What Should You Do?
If you're thinking about selling, now might be the time to act before the new rules take effect. This is especially important if you're selling an investment property or a second home, or if you have a significant capital gain to realize.
Let's Talk
I'm here to help you make an informed decision and navigate these changes. Feel free to reach out if you'd like to discuss your options. Together, we can ensure you make the most of the current market and tax conditions.
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