Canadians include 50% of their capital gains in taxable income — the same rate that has applied since 2001. Budget 2024 proposed raising the rate to 66.67% (two-thirds) on gains above $250,000 for individuals and on ALL gains for corporations and trusts, effective June 25, 2024. That proposal was never legislated: implementation was deferred to January 1, 2026, and on March 21, 2025 the government cancelled it outright.
What that means in practice:
- Sell a cottage for a $200,000 gain: include $100,000 in income (50%)
- Sell investments for a $400,000 gain: include $200,000 in income (50%) — NOT the $191,700 the cancelled tiered rules would have demanded
Why this still matters in 2026
Many Canadians rushed disposals before June 25, 2024 to beat a hike that never arrived, crystallizing gains (and tax bills) years earlier than necessary. Some tax software and older articles still describe the two-tier system as law — always confirm against the CRA's current guidance.
What DID survive from Budget 2024
The Lifetime Capital Gains Exemption increase went ahead: $1.25 million for dispositions after June 24, 2024, indexed from 2026 ($1,275,000). Qualifying small business shares, farming, and fishing property gains are shielded up to that limit.
Planning under the real rules
With a flat 50% inclusion rate there is no annual-threshold game to play. The levers that matter are timing disposals against low-income years, using TFSA/RRSP room so gains never become taxable, and offsetting with capital losses (carried back 3 years or forward indefinitely).
