The government estimates that just over 0.1 per cent of Canadians will be affected by the tax change this year
Middle-class Canadians will not be immune from the effects of the federal budget’s increase to capital gains taxes, despite the government’s contention that the changes will largely affect only the country’s wealthiest people.
Brian Ernewein, a senior tax adviser with KPMG, said there may be little that Canadians can do to mitigate their new tax bill when it comes to selling housing that does not qualify as their primary residence. Very few Canadians would have $250,000 of taxable capital gains, since the lion’s share of Canadians invest in tax-sheltered accounts like RRSPs and TFSAs, which are exempt from capital gains taxes and where people can accumulate hundreds of thousands of dollars in contribution room over the course of their working life.
But people with time on their side have some options, the simplest of which is selling your assets over the course of many years so that your capital gains remain under $250,000 in each year. “It’s a matter of averaging your way out of these positions over many years so that you don’t have a big event in one single year, whether that’s when you pass away or otherwise.”
Tax Gains Corporation Capital Estate Government Increase KPMG Chrystia Freeland Toronto
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