The Federal Government has announced that as capital gains realized on or after June 25, 2024 will potentially be subject to higher taxes.
Capital gains are based on the difference between the price paid for a property and the price it is sold for, and the tax is payable when the gain is realized, which is when the property is sold. Currently, only 50% of the capital gain is taxable, but on June 25, that will change. Any capital gains above $250,000 in any year will be taxed at 66.7%. This can mean significantly more taxes are owed. This threshold also only applies to individuals so if a property is held by a professional corporation, a holding company or any corporation, the 66.7% rate will apply to the entire capital gain.
“This is the biggest capital gains tax change in 25 years and all property owners, myself included, need to consider their options for any properties going forward. This may be the right time to sell," said Shindico’s President and CEO Sandy Shindleman.
Commercial property owners, especially those who have owned a property for a long time, should make a plan to deal with these changes. For many owners, this change will mean paying 34% more taxes on the capital gain when the property is sold.
In this example, this Manitoba resident has a salary of $500,000 and sold a real estate property realizing a $2.5M gain on the sale. This is how the tax changes may affect the taxes owed on the capital gain.
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If you own a property and have been considering selling, you should reach out to Dino Alevizos* at 204-474-2000 immediately to discuss your options. You can also email him at This email address is being protected from spambots. You need JavaScript enabled to view it. to set up a call or meeting.
This article is not intended to provide nor should it be relied upon for accounting, legal or tax advice or recommendations. Independent advice should be sought.
Dino Alevizos*
Vice President, Commercial and Business Development
*Services provided by Dino Alevizos Personal Real Estate Corporation
