So, in the latest budget, Finance Minister Chrystia Freeland announced a plan to hike up the capital gains tax. Effective June 25th, 2024, the capital gains tax will go up from 50% to 67% when you sell something like a stock or a second home, They figure this move will bring in about $19 billion in new cash.
Who's feeling the pinch? Well, if you're making over $250,000 in profits, get ready for these new rules to kick in. They're saying this will affect around 40,000 people each year, which is a tiny fraction of Canadians.
To explain this clearly:
Individuals will pay 50% tax on gains under $250,000 and then 67% tax on gains above the $250,000
Capital gain = purchase price – selling price. ( The capital gains tax is on the profit amount not the entire amount)
The capital gains tax rate depends on the amount of your income
The Highlights
Real estate, including cottages and investment homes, affected by proposed changes.
Proposed change raises inclusion rate to 67% on capital gains above $250,000 for individuals.
Inheritance of primary home exempt from capital gains tax, but other properties may incur taxable gains.
Capital gains exemption for primary home remains unchanged in the 2024 budget.
Experts advise seeking professional advice on tax implications of property inheritance and sale.
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