Navigating the New Capital Gains Inclusion Rate: What Real Estate Investors Need to Know

The Canadian government recently announced changes to the capital gains inclusion rate, a significant shift that was first introduced in the 2024 budget. Now that the motions have been tabled to pass this change into legislation, it’s crucial for real estate investors to understand the implications of this update.
In this video, I dive into the significant changes to the capital gain inclusion rates announced in the Federal Budget 2024. We cover the effects on investment property owners and stock market investors, strategies for deferring and calculating capital gains, and the implications of these new rules on real estate investors.
Key Moments In This Episode
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00:00 - Introduction to New Changes
02:15 - Impact on Investors
04:37 - Carrying Forward Capital Losses
07:03 - Calculating Offsets
09:37 - Simplified Calculation Post-June 25th
11:53 - Deferral Implications
14:07 - Timing of Capital Gains
16:20 - Restrictions on Tax Planning
18:28 - Sale Requirement for Gain Recognition
20:32 - Elimination of Tax Exemption Pre-Sale
22:36 - Effects on Real Estate Investors
If you have any questions or thoughts after watching this video, leave a comment below, and I’ll respond as soon as possible.
Don’t forget to subscribe to my channel for more videos on Canadian real estate and tax-saving strategies so you don’t miss a thing!
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Please make sure to speak to a professional that knows your personal situation before making a decision.
If you need to talk to someone on my team, email us at [e-mail].
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DISCLAIMER:
Real estate Tax planning is a personalized decision and will depend on your situation, priorities, and risk tolerance. Consult with your legal and tax advisors to ensure you get the best personalized advice.
The information contained in this video is for general information purposes only.
The information is provided by ECRB Consulting Inc., RealEstateTaxTips.ca, Cherry Chan Professional Corporation and Cherry Chan.
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#CherryChan #RealEstateTaxTips #RealEstateInvesting #CanadianInvestors #RealEstateCanada #canada #taxes #CRA #RealEstateTax #CapitalGains #FederalBudget2024 #StockMarket

[@RealEstateTaxTips]

Want to stay up-to-date with all the latest news about Real Estate Tax Tips, receive weekly tax tips and free real estate investment resources? Then subscribe to our newsletter here: realestatetaxtips.ca/youtube

[@sallyt5568]

I own a property that once was my primary residence. I started renting it out last year. How will capital gains affect me when I sell? Thank you for your dedication to putting out good content for us!

[@kirbyjackson8796]

Thank you for the update!!

[@RealEstateTaxTips]

You bet!

[@unityorelse2375]

Im glad i found this channel.... i wanted to start one, because I was getting mostly american information. but it wouldn't be genuine and would take too much work since I'm not an accountant. Thanks

[@dealman3312]

Thanks for this summary Cherry. Much appreciate 👌

[@RealEstateTaxTips]

Glad it was helpful!

[@karimnanji4163]

Thank you keep up the good work.. I pray for all the happiness in the world for you and yours.

[@AbdulElTawil]

Not sure if you mentioned in the video but graduated rate estates (GRE) and qualified disability trusts also get the 50% inclusion for 1st $250K. Might not help real estate investors too much, though.

[@oscarsocualaya3304]

Thanks for the information provided;

[@RealEstateTaxTips]

You bet!

[@tin2xdeegee661]

Thanks for the update …

[@mohammadtahir8785]

Thank you Cherry. I always learn a lot from your videos.

[@RealEstateTaxTips]

I'm so glad!

[@mikekovacs8981]

THIEFS. More or less taxing long-term investors on inflation

[@2maw1wrimike]

To be fair there are massive problems from too many investors in real estate

[@mikekovacs8981]

There is nothing FAIR about this tax theft. So new taxes are supposed to fix the housing crisis?

[@haukenhung]

We pay all these taxes, the government keeps spending a ton of money causing inflation making the house values go up and more capital gains for investors! 😢

[@somebodyintheworld5036]

Only long term investors who make over 250000 in a single transaction within a year. If you sell and rebuy liquid assets like stocks so that your capital gain for the year is below 250000, your tax payment should be unchanged no? The main issue is for real estate, but I believe there is both an exemption on capital gains made from the sale of your primary residence (not for second, third, or other investment properties that you do not reside in), as well as a life time capital gain exemption of 1M. You get to have your real estate appreciation and enjoy the first 1M or so of capital gains completely tax free!

[@mikekovacs8981]

@@somebodyintheworld5036 and what about if you have a corporation or structured your estate in a trust? No 250k exemption. 30% more taxes. Can't afford Trudeau. PP for PM

[@reynaldolopez4118]

Quick question, do I need to do a disposition of my property when I stop renting it and have it as my principal residence?

[@ReAl-uu8ku]

Thank you Cherry!

[@mdaroza]

Can you please comment on how inheritance is handled? You might still have some control via tax planning while you’re alive. Can’t really plan when you die. Also, any way to additional insight on the type of industries that can get the 1.25M one-time exemption?

[@Cassie118]

Thank you for another great video! Does the CDA reduce when the inclusion rate increases? If so, does that mean this change further erode the ability to take money of our corporation by shareholder?

[@u2v22]

How does this work with spouses/common-laws? Can assets be transferred from one partner to another and then have the gain under their person?

[@MonaZabanah]

Great info, thank you! What if a rental property is owned by two people (spouses) and the gain on the sale is $400k. Is that gain split 50/50 as individual personal income and the inclusion rate applied then? Another example is a gain of $600k. Again, would it be split 50/50 and therefore the inclusion rate applying against the first 250k at 50% and 67% on the $50k balance?

[@lightdecore]

I have questions

[@rajeevlamb5436]

Hi ! Is there a LIFETIME capital gains exemption (LCGE) for individuals and/or corporations ? How does it work, please?

[@AbdulElTawil]

Every individual gets the LCGE in Canada, but there are some strict criteria to qualify for it so the vast majority of real estate investors won't get to use it for their corporation's shares. The new budget actually increased the total amount of the LCGE, but again, even more restrictions so a lot (probably even the majority) of business owners won't get the increased limit.

[@thanhle-pt5qy]

It's a wonderful video for me... I have my investment property for 28 years on my personal name. So do i qualify for LCGE or what can i do for best situation when I sold the property. Thank for your help

[@AbdulElTawil]

@@thanhle-pt5qyLCGE is for sale of certain corporation shares, so it won’t apply to your situation. Best to speak with a tax professional about your situation specifically to get the best advice.

[@shermantse7322]

The government is forcing me to leverage to offest taxes. I am thinking of opening a margin account borrow to invest....

[@mohammadwaleed9971]

😢

[@RealEstateTaxTips]

:(

[@uneetudiant]

Who or what MAKES me a taxpayer? The Income Tax Act is 3,488 pages with over 100 separate Definition sections. The word taxpayer is used 55,561 times. If I am a taxpayer, where do I look to see the definition of taxypayer? , Some to think about , Cheers

[@DD-pbgyu]

I'm thinking about all the people who will die with huge rifs over 250k gain, That's a lump sum 2/3 taxed likely at the highest rates. Everyone needs to redo estate planning now

[@NeilB.-rv2ww]

Any RRIF contents at time of death are treated as income (100%) and added to othe income in the year of death. RRIF are registered vehicles so capital gains are irrelevant.

[@unityorelse2375]

Why is it it feel like this is all mean for me😫😫 because as soon as i finally got a chance to start owning realestate all these changes are taking place😔😔😞😭 criminals 🤷🏿‍♂️

[@RealEstateTaxTips]

:(

[@DD-pbgyu]

Well you can capital gain average on stocks so why not property...ugh. Disappointed with this move and I will not support this government in the next election

[@ryhchoi]

It’s a pity that the Canadian government dont focus on enlarging its income sources via expansion of industries vs. Turning to gouging its citizens and heavy taxing its people left right and center to make Canadians poor.

[@user-kv4kp4co1r]

"Buy f.king now." - Cherry Ponzi

[@philippe8742]

Rich problems 🤣

[@jonathanramos7285]

Good for the real estate you people make too much money.

[@meenachand4559]

If you want social programs like $10 Daycare and Dental for children and seniors you need to pay taxes. Cherry your information is incorrect. It only affects people who have made over $250,000 for that year and over. You are misleading - watch this video By Canadian in a Tshirt

[@alpereira5286]

People who own corporations and personal corporations are being taxed at 67% inclusion rate on capital gains. There is no $250,000 exemption for them even though they don't have pensions and it was their retirement income plan. Please stick to what you know...

[@ldd9672]

People keep voting for the libs….😂