Current Rate

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.