Proposed Changes to Capital Gains Tax in 2024 Federal Budget

The 2024 federal budget proposes increasing the capital gains inclusion rate to help fund new projects and programs. Here are the key points:

Capital Gains Definition: The profit made from selling an asset like a cottage, investment property, stock, or mutual fund.
Primary Residence Exemption: Gains from selling your primary home remain tax-exempt.
Current vs. Proposed Taxation: Currently, 50% of capital gains are taxable. The new proposal taxes two-thirds of gains above $250,000 for individuals. Gains below $250,000 remain taxed at 50%.
Impact on Property Sales: The exemption for principal residences remains. Lifetime exemptions for small business shares, and farming and fishing property increase to $1.25 million.
Limited Impact: Most Canadians won’t be affected, with only 0.13% expected to pay more taxes due to the change.

Consult a tax professional for personalized advice. Contact VF Accounting