Capital Gains Inclusion Rate – Deferral

Early last year, the Federal Government announced a monumental change to the way Capital Gains tax is calculated in Canada. Rather than the previous method of including 50% of CapitalGains as income, a new 2/3 inclusion rate was to be implemented. This higher inclusion rate would impact all Capital Gains earned by corporations, starting at dollar one, and would apply to individuals only on Capital Gains in excess of $250,000 in a calendar year.

The original implementation date was set for June 25, 2024 and many Canadians adjusted their financial affairs around this timeline. However, no legislation was ever passed to support this change and our parliament is presently prorogued as we enter tax-filing season; leaving many to wonder how to appropriately file 2024 returns.

Thankfully, on January 31 st , the Minister of Finance and Intergovernmental Affairs, Dominic LeBlanc, announced a deferral of the Capital Gains changes to January 1 st , 2026. How does this deferral impact Real Estate investors? Ultimately, it gives you much more runway to consider selling appreciated properties at a far lower tax rate! If you’re on the fence about liquidating a real estate holding, be sure to calculate the tax consequences of waiting another year, and potentially paying as much as 33% more in tax to do so.

—Thomas Johnson, CFP®, B.Comm.(Hons.)—
Cascade Financial Group Inc.