Since 2024, Canada taxes the first $250,000 of annual capital gains at 50% inclusion and the rest at 66.67%. See exactly how the tiers apply to your gains and what you owe.
Before June 25, 2024, all capital gains for individuals were taxed at a flat 50% inclusion rate. Starting in 2024, a two-tier system applies: the first $250,000 in net capital gains per year remains at 50%, while gains above that threshold are included at 66.67%.
This primarily affects Canadians with large one-time dispositions: selling an investment property, a business, or a concentrated stock position. For most investors with typical annual gains well below $250,000, nothing has changed.
The higher 66.67% rate also applies to all capital gains realized inside a corporation or trust (with no $250,000 threshold). This affects holding companies and family trusts that hold appreciated assets.
For individuals, the first $250,000 of annual capital gains is included at 50% (same as before). Capital gains above $250,000 in the same year are included at 66.67%. This two-tier system applies to gains realized on or after June 25, 2024. Corporations and trusts have all gains included at 66.67% with no threshold.
Per individual. Each person gets their own $250,000 threshold at the 50% rate. Jointly-owned property dispositions are split by ownership percentage, so a couple with 50/50 ownership effectively has a $500,000 combined threshold.
Capital losses from the current year and net capital loss carryovers from prior years reduce your total capital gains before the inclusion tiers are applied. If you have $400,000 in gains and $200,000 in losses, your net gain is $200,000 — entirely within the 50% tier.
No. Gains exempted by the principal residence exemption are not capital gains at all — they are eliminated before reaching your return. They do not count toward or consume any of the $250,000 threshold.
If possible, yes. The $250,000 threshold resets each year. Selling a $500,000 gain in one year means $250,000 is at 66.67%. Spreading it across two years means both halves are at 50%. However, market risk and opportunity cost may outweigh the tax savings — run the numbers.