Canada’s Prime Minister announced that the government will scrap the proposed increase in the capital gains inclusion rate on 21 March 2025.
“Canada is a country of builders. Cancelling the hike in capital gains tax will catalyze investment across our communities and incentivize builders, innovators, and entrepreneurs to grow their businesses in Canada, creating more higher paying jobs. It’s time to build one Canadian economy – the strongest economy in the G7,” said Rt. Hon. Mark Carney, Prime Minister of Canada
In addition, the government will maintain the increase in the Lifetime Capital Gains Exemption limit to CAD 1,250,000 on the sale of small business shares and farming and fishing property. The government will introduce legislation affecting the increase in the Lifetime Capital Gains Exemption limit in due course.
The plan would have raised the rate from one-half to two-thirds on annual capital gains over CAD 250,000 for individuals and all capital gains for corporations and most trusts. The government previously announced that the increased inclusion rate would be implemented on 25 June 2024, but it was postponed to 1 January 2026.
