The federal government plans to increase the inclusion rate for capital gains.

Currently, when you sell your capital property, such as investment property or stocks, only 50% of the capital gain is taxable for individuals and corporations (this is known as the capital gains tax inclusion rate). The proposed change in the federal budget increases the capital gain inclusion rate for both individuals and corporations.

For individuals, capital gains up to $250,000 will remain at the inclusion rate of 50%. However, capital gains over the $250,000 threshold will increase to two-thirds (66.67%).

Corporations and trusts previously had a capital gain inclusion rate of 50% as well. However, the proposed change increases the inclusion rate to two-thirds (66.67%) on the entire capital gains, and they do not receive the $250,000 threshold as individuals do.

If the proposed changes are adopted, they will take effect on June 25, 2024.

For more information, please don’t hesitate to contact one of our tax experts at SJ Chartered Accountants, serving Mississauga, Etobicoke, Toronto, and other surrounding areas in the GTA