Canada proposes increasing capital gains inclusion rate
Current rate
Currently, only 50% of a capital gain is taxable in Canada. The taxable portion is added to your income for the year.
Proposed change
The federal government has proposed increasing the inclusion rate from 50% to 66.67% on capital gains above $250,000 for individuals.
Impact
This change would mean that more of your capital gains would be subject to tax. For example, if you sold a cottage for $100,000 more than you paid for it, you would currently only be taxed on $50,000 of that gain. Under the proposed change, you would be taxed on $66,667 of that gain.
Consultation period
The government is currently consulting on this proposed change. The consultation period ends on March 1, 2023.
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