CRA Capital Gains Update

Written By Guest User

If you’ve been following Canada’s tax news, you’ve probably heard the big one,the capital gains inclusion rate is changing.
After months of confusion, lawsuits, and shifting announcements, here’s what the latest CRA update really means for individuals, trusts, and corporations.

What’s Happening?

In April 2024, the federal government announced its plan to increase the capital gains inclusion rate from 50% → 66.67% for gains above $250,000 (for individuals) and for all gains realized by corporations and most trusts.

Originally, the change was supposed to take effect retroactively from June 25, 2024. but legal challenges and political pressure slowed everything down.

CRA’s Position (as of November 2025)

The CRA confirmed that it will continue to administer the current rules (50% inclusion rate) until new legislation is officially passed.
The Department of Finance has now proposed a new effective date: January 1, 2026.

That means:

  • Any capital gains realized before January 1, 2026 will stay at the 50% inclusion rate.

  • Only gains after that date (over $250,000 for individuals) will be taxed at two-thirds.

  • The Lifetime Capital Gains Exemption (LCGE) limit stays at $1.25 million, indexed from 2026 onward.

What This Means for You

If you’re planning to sell property, shares, or your business, timing will matter more than ever.
For high-value assets, completing your sale before the end of 2025 could save you thousands in tax.

The CRA will:

  • Provide relief from late-filing penalties and interest until
    • June 2, 2025 for T1 (individuals)
    • May 1, 2025 for T3 (trusts)

  • Update tax forms to reflect the 50% inclusion rate in the meantime.

For Corporations and Trusts

Corporations can continue using current tax software and forms based on the 50% inclusion rate until 2026.
If a corporation has already filed under the higher 66.67% rate, CRA will coordinate corrective reassessments.

Pantax Tip:

  • Don’t rush, but don’t wait too long.
    If you’re considering selling a rental property, investment portfolio, or company shares, now is the time to review your capital gains position.

  • Plan before you sell.
    Use capital losses strategically.they can be carried back 3 years or forward indefinitely to offset gains.

  • Talk to your accountant early.
    Tax planning around timing and ownership structure (like using a Holdco) can make a major difference.

Disclaimer

This article provides general information and does not constitute accounting or legal advice.

Guest User
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