Announced during the Trudeau administration’s last budget, the increase in capital gains taxation will come into force on Tuesday in Canada. Here’s what it actually changes for you.
The capital gains in question are income derived from the sale of shares, from housing intended for rental or from a second home such as a chalet.
The spokesperson for TurboImpôt in Quebec, François Gagnon, recalls that as of Tuesday the tax on these gains will increase from 50% to 66.7% if they exceed $250,000.
Mr. Gagnon gives the example of the sale of a chalet for $500,000.
Before Tuesday, the total amount to be added to the seller’s income that will be taxed is $250,000 (50%).
Starting Tuesday, it will increase to $291,675 (66.7%). In this scenario, a worker whose salary is $80,000, before capital gains, will therefore have to send the taxman an additional $10,650 starting June 25.
This measure will not reach “only the ultra-rich as the Trudeau government’s wishful thinking,” notes François Gagnon, stressing that millennials and those in the process of inheriting will also be affected.
“There are a lot of tips you can use to save as much tax as possible,” he says, inviting owners to sit down with a financial planner or tax professional.
SMEs, don’t panic!
In addition to the approximately 40,000 people expected to be affected by this measure, it is estimated that around 307,000 SMEs will pay the price.
Now is not the time to panic, according to Mr. Gagnon.
The TurboTax spokesperson reminds those who wish to sell their businesses that in 2024 they will benefit from an exemption of $1,250,000 in capital gains.
- For all the details, watch the interview above.
