Canada’s Capital Gains Tax Hike

In a recent announcement, the federal government revealed a significant change to Canada’s capital gains tax policy, set to take effect on June 25. This alteration entails increasing the tax burden on businesses and private investors, who will now be required to pay tax on two-thirds of their capital gains earnings, up from the previous half, upon selling real estate assets.

This adjustment in tax policy has stirred conversations and concerns, particularly within Saskatchewan’s real estate investment community. As the implementation date of the capital gains tax changes draws near, investors navigate strategies to mitigate its impacts.

While some may delay strategic portfolio dispositions in anticipation of potential policy changes in the future, others continue to focus on aligning their portfolios with long-term strategies, mindful of the prevailing interest rate environment.

Despite the challenges posed by the tax hike, Canada remains an attractive destination for real estate investment. With low vacancy rates and promising growth outlooks in population, employment, and GDP, Coupled with conservative new commercial space construction, Canada’s CRE sector continues to captivate global investors.

Additionally, the stable operating environment, accessible banking system, and high livability scores further bolster its appeal.

In conclusion, while the capital gains tax hike presents immediate challenges and uncertainties for real estate investors in Saskatchewan and across Canada, the resilience of the CRE sector, coupled with the country’s enduring fundamentals, position it favourably on the global investment stage. As investors navigate through these changes, maintaining a long-term perspective amidst short-term challenges remains paramount.

There are many considerations when navigating this new tax. Our advice is to seek out the help of your trusted accountant to discover how these new laws impact your portfolio.

Please see the Government of Canada’s publication on the matter: https://www.canada.ca/en/department-finance/news/2024/04/tax-fairness-for-every-generation.html

For more information, contact your family real estate team :

306.370.8474 | hello@morrison87.com | @morrisonrealty87

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