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@@Ryan-cf6lcwell it looks like the tables have turned doesn’t it Ryan ? If you are using this dated information as a reason to vote liberal, please DONT
Canadian medical doctor here. Over 10 years of university education and training. Didn’t really start making money until I was 30 years old. Government pays us $35 per patient visit. Been saving up over 2 decades of hard work in a professional corporation providing employment to medical assistants, and hoping to retire with a small investment. Tax increase is the reward I get for being a Canadian doctor! Thank you Cherry for sharing the anger I feel inside. No thanks to our government.
I hear you. It often feels like that our government is targeting us (professionals and all service focus businesses). From the 2017 tax change targeting just professionals not allowing us to split income, to the increase in capital gain inclusion rate and the entrpreneur incentive that specifically excludes all service professional businesses... I feel that we aren't welcome here.
@@RealEstateTaxTipsI am considering becoming a non tax resident. Already emailed your office to discuss my personal circumstances so I can consider the tax implications and minimize the exit tax burden. Look forward to speaking with your team.
People who voted for Liberal should be reconsidered whether it was right or wrong. Do they really good look after Canadians or they want to save the world by squeezing all work hard Canadian to achieve their ideal goal!!!! Poor Canadian!!!
😂 why bite the hand that feeds. They've literally doubled the net worth of your investment in 8 years at the expense of younger generations. Made the young and immigrants serfs by using a large portion of incomes to pay for rent and robbing them of the potential to gain wealth forever stuck paying you. Made policy to reduce supply and increase demand. Finally using tax money and debt to bail out banks and investors to protect the value of your property. Doesn't make sense that you would vote otherwise. Any other party will reduce demand by reducing immigration, increase supply by reducing red tape.
I am upset and disgusted with these proposed tax changes. There is almost no incentive to invest in real estate anymore with interest rates and the ridiculous tax in this country!
Yea they’re saying it’s only going to affect .12% of people , meanwhile 16% of people living in Ontario own a second property. The middle class gets hit on this one. I hope Pierre cancels
My grandmother was native and I was born in Newfoundland. I'm not leaving but I don't blame you for leaving. The land here is in my blood and I won't give up on it that easily. Then again this country isn't what profit I can make off it. I paid the highest marginal tax rate all my life.. You think taxes are high now you should of seen in the 80's and 90's.
Thanks Cherry!!! Remember how they said “you’ll own nothing and be happy”? Think about how they’d need to steer the ship to reach that end goal. Freedom = Property Ownership don’t forget that.
Please make video on 1. life time exemption 2. Also regarding reinvesting and save capital gains 3.if I had refinanced my primary residence for down of investment property; how could it help in taxing purposes? 4. Deferral of capital gains Thanks and keep doing great work on awaring middle class.
Glad I didn't vote for Trudeau. This will wake up a lot of people who voted for Castreau (son of Castro). Socialism never works nor does any good in the world.
I believe this commentor means speculative activity in the housing market. Runaway home prices will destroy any economy. Take a look at Canadian productivity levels.
Thx. I am a senior on pension w an income property bought long ago depending on sale to use profit for senior health care. W this increased % inclusion n one time sales event it will mean much less for home care.i can’t evict tenant, market, sell, close before June 25/24.Impossible. Can’t CRA spread over 2 years like staggered stock sale disposal? Or can it be grandfathered?
this increase should have been limited to residential real estate to flush out the speculators. Canadians are too heavily invested in residential RE, keeping it at 50% for other investment types would have shifted money away from RE, reduced speculative demand.
In my humble opinion, it should be applied only prospectively not retroactively. A valuation should be done today on assets owned, and capital gain accrued up to today should have 50% inclusion and going forward it could be 2/3 inclusion rate. And government should control their spending!
@@RealEstateTaxTips It is impossible to implement what you said. How can you verify the value of all investment real estate in the country? May be it is easier to keep 50% Capital Gain tax for those keeping the properties for over 10 years.
Ive been reading alot of comments on here and i am disgusted by so many with the" i dont have you shouldnt either"mentality . People that agree with any form of taxation need to look at the big picture here. This goverment cannot and has not created anything that will increase our gdp. All they do is expand the goverment and create worthless programs that help no one. This is the last straw ill be taking my 2 trades and engineering to another country where hard work is rewarded. Saudi arabia is looking really good right now.
Since you are comparing apples and oranges in this comment at least add a common denominator: rotten. Greed is unhealthy; whether it exists in government or in individuals.
Usually the highest marginal tax rate an individual has to pay is about 50%. Corporation is 50% with 30% refundable. Hence I used 50% just to be on the conservative side.
Thank you Cherry, awesome presentation as always. I have 2 question. 1. The capital cost allowance : when we sell a property, we need to declare the cap allowance as income. Would this be impacted but the new 66.7% tax on cap gain? 2. The cap gain made on a property that is own by 2 people: if cap gain is 300k. We divide this between 2 people. So cap gain is only 150k which is then not impacted by the cahnge proposed by Justin. Is this correct? Thank you very much!
I'm hoping that they would roll back the corporation and trust ...but again, that's a hope. It doesn't make sense they penalize the corporation and trust...
This is the new Canada, like it or not, from now on Canadian should live in tent, no property tax, no capital gain although too the most rated high standard of living year after year. This Canadian government should estimate the dollar value of purchase then and now then calculate the capital gain that will be fair for owners. For EX. Buying a house 5 years ago for $400K is equivalent to $1 million today if sold for $1.1 you should pay for $1K only that the fair capital gain because buying a new home today will cost you at least $1.5 million just to accommodate the growing of your family. This Canadian Government need to learn a lot, and to stop corruption within and stop spending tax money for useless politicians
When you hold investments over a period of long time like real estate, a large portion of your gains comes from inflation. This is the origin of the 50%. Now you're being taxed on inflation too?
Hi < I have a question, imagine 2 people ( 2 people on the title ) bought a house in 2014 for 1.5m and at that time both were permanent residents, now one of them is Canadian and one of them lost the residency (foreigner now) , and they rented the property for two years if they sell their property after the end of rental agreement for 2 M, how much Tax should they pay?
Hey Cherry, Thank you for the amazing content. Your videos are really helpful. I would be grateful if you could help me understand a bit about sole proprietor tax. I am working full-time and planning to day trade while making videos on CZcams as a side hustle. Am I eligible for sole proprietor filing? If so, can I write off expenses for both day trading and content creation?
I totally agree with you,I have the same anger. It is completely rip off. We are the people who contribute to the society more than the other and now we are getting penalized in the new rules. Thank you to inform people.
The negative to borrowing 60k against your rrsp is that it will put you 5 years behind on your retirement plan because once you get that mortgage your are at best just able to replace your rrsp you borrowed but unlikely going to be adding to it while paying a mortgage.
@realestatetaxtips would you know how capital gains affects a foreign property sale (with a country that has a tax agreement with Canada to prevent double taxation)? Thanks for your informative videos.
@RealEstateTaxTips thank you for confirming Cherry. Would you know if a wealth tax paid to foreign country (eg. $10K/Year to the Netherlands on investment property) can be deducted from Canadian capital gains tax when foreign property is sold? In Netherlands, there is no capital gains tax on sale of property but there is a high wealth tax on owing an investment property that must be paid annually to Dutch government.
Thanks for your honesty and frankness. Govt is making it harder for har working Canadians. Time to rethink Canada. Question. Does this apply to gain on margin act as well?
Thank you very much for your honesty and professional information. I live in B.C. and am outraged at the Liberals and NDP for yet another massive tax grab. I love my country (born and raised here). I am retired and have been a business owner for many years. I have paid both personal and corporate taxes for decades. When I invest with my 'after tax' dollars and then if I'm lucky, I actually earn a profit - I'm taxed yet again! I have lost complete faith in all politicians (federal, provincial and even municipal). We are being taxed into oblivion. This country will soon acquire a negative reputation worldwide as a place NOT TO INVEST IN. My children and grandchildren are going to experience a reduction in their standard of living. Maybe it's time to think about leaving Canada or at least having our hard earned money leave.
Fantastic explanation. You provided an understandable excel example on how to explain this to clients when it comes up. Hope you don't mind that I am going to use your excel format (credit to the source of course 😉).
Does any one know if Pierre Poilievre going to undo this nonsense capital gain changes ? I hope he does . The problem with taxes is usually when one government introduces them the future governments enjoy its income and won’t restore the original rules.
@@mdf3006 Watch your language here. Canadians are generally polite and respectful. Just because you have a different political view does not mean that you have the right to call others' opinion as "sociopath". If you have issues, complain to your MP, complain to Justin Trudeau. If he's doing a great job, we wouldn't be at the lowest productivity rate according to Bank of Canada, would we?
@@mdf3006wow I'm not sure what worlds you're living in, but introducing a tax that's retroactive is going to hurt people who are trying to save for their families just a little bit more. JT just makes me think of the abuse of the emergencies act, WE scandal, SNC Lavalin scandal, $6000 a night hotel rooms, Arrive can scam, him wearing blackface, then wearing the Indian garb, Aga Khan scandal, oh yeah, then 35 billion for the Trans mountain pipeline... I don't personally approve of any of these things, do you? I'm open to learning where I'm mistaken but don't think I am 🤷♂️
Key take away from these last number of months including the disastrous budget…. The government hates you having money. Carbon taxes, wasteful spending, the budget BS etc. I wonder 💭 when Canadians will stop participating in this corruption? Move your assets out of Canada and stop filing. Stop giving money to the monster that wants you to be in a socialist hell. They can waste money like it is going out of style while you scrimp and save and then they steal it to waste or give to their corrupt buddies.
Totally agree with you Cherry. If the govt is discouraging people from owning or investing properties. Their money maybe going to move out of Canada and invest somewhere where the tax is lower. Canada will become a poorer country over time.
Isn’t the first $250,000 personal capital gain is exempted? If 50% of the $250K is taxable income, then why the govt saying upto 250K personal gain is exempted?
Cherry i have to say, i started following you with this video as im starting my investement in real estate, your one of the most amazing ressources on this subject i researched. You are really clear, with amazing examples, now i have to listen to all your videos :)
The less provocative number in all this is taxes effectively have gone from 26% to 37%. People think capital gains tax went from 50% to 67% - it didn’t. The tax inclusion rate did. Still sucks.
we have to vote Trudeau out, his team is not capable, Freeland doesn't have any financial background and this budget doesn't help Canada economy and promote hardworking. Very shortsight
🎻 honestly it should probably be higher when it comes to unimproved non-productive assets like real estate. People love to complain about our lack of productivity in Canada… tax policies favouriting real estate is part of the reason…
Cherry, question please: With the inclusion rate increased to two-thirds for all capital gains realized by corporations, will the amount going to NERDTOH be computed as CapitalGain*(2/3)*0.3067? It would tiny consolation, as part of extra tax will be recovered when corporation distributes non-eligible dividend to the owner(s).
Coast to coast, Canada's toast. I wouldn't be surprised if CPP will be severely watered down in the next 5-10 years, and if they even do away with TFSAs soon. I'm finding less and less reasons to stay here...digital nomad VISAs are looking very promising.
Someone made this very smart comment "The latest budget from the Liberal-NDP alliance once again targets small business owners, demonstrating a persistent yet misguided obsession with painting them as the wealthy elite. This echoes the 2017 debacle when the Liberal government smeared doctors as tax cheats, alongside their relentless targeting of Personal Services Businesses (PSBs). Wrapping these policies under the guise of "taxing the rich" reeks of hypocrisy. The reality is that most small business owners are not the privileged tycoons this government would have us believe; they are hardworking individuals who lack the financial muscle to fend off such fiscal onslaughts with expensive legal and accounting teams. Instead of acknowledging the genuine risk and investment these people bring to the economy, the government prefers to cast them as villains in their budgetary theater. Owning property or a small business isn’t a mark of avarice but a stab at financial security, often aiming for a modest retirement. To imply these individuals are akin to greedy landlords hiking rents obscenely is not just unfair-it's a cynical move to squeeze those who are easiest to target, not those who are truly wealthy."
Can I borrow against my stock portfolio and savings to offset taxes? The stock margin investment rate is 7% which is very high to make meaningful gains to offest the cost of interest.
This is what happens when Canadians vote in a PM who hires a finance minister who has a degree in journalism and literature. What a joke, you may also want to look up the education background of Canada’s health minister, history and political science. No wonder things are running so smoothly in this country.
There should be a grandfather clause for rules like these, how can you tell people to save fore retirement by investment for years and then change the rules just before people need to retire? 🤷♂️
The government is creating a system where houses aren't a commodity and instead a place to live. So someone bought a home decades ago for $60,000 now it's worth $1,000,000 they have made rental profits for 20-30 years.. boo hoo. There is so much money laundering from China into our real estate that this seems like a good start in policy so Canadian people can own 1 home once in their life at least
This is literally pulling the rug in middle class people who realize that investing is the only way to get ahead in this economy. Just working a 9-5 job isn’t enough anymore. The government should be lowering the barriers to investing, maybe reducing the CGT to incentivize more people to invest, and then reap the rewards. Increasing the CGT is very short sighted, and will make things worse for everyone.
I've a question, I own private REIT investments in Corporation for last 5-6 years and I get distribution(return of capital), the adjusted cost base has gone down, can I just sell the REIT units to trigger capital gain before June 25th and buy it back again after 30 days ?
Pretty hard to feel bad for the people this hits, it’s litterally only capital gains over 250k and only the gains not held in a registered account… so litterally people that are already in reasonable shape, it’s the people trying to buy a home and actually start to build their future that need the help
@@bobbergman5708 never said I was entitled to anything, I am saying you’re not entitled to ridiculous growth of capital assets that haven’t been earned (someone who bought a house for 200k is not entitled to 800k for that house that they did nothing other be born at the right time and get lucky timing)…. I’ve earned every last thing I’ve had, and due to sacrificing in a lot of areas I’m doing ok, but I’ve never had that kind of crazy luck and likely never will. Capital gains also don’t even apply to the crazy unearned appreciation on principal residences either! This new increase is only on people who are fortunate enough to have enough investments in non registered assets to even see 250k in capital gains (which is only taxed at 2/3 of income bracket with this hike and only on the gain not the principle, so not paying tax a 2nd time as some claim) So sorry no I don’t feel the least bit of empathy for that.
I have seen many responses like this and do not understand it. I bought a property 23 years ago, lived there for 7 years then kept it as a rental with hopes of one day using it as a large portion of my retirement. For YEARS it was cash negative but I persisted and invested money and time into the property, providing a good and very affordable home for my tenants. I knew property value increases would eventually pay off and I would recover my investment. Now I am a few years from retirement and the government wants a bigger piece. The government I understand, its comments that imply that as a person who was willing to risk EVERYTHING is somehow the problem and shouldn’t complain when they are forced to pay even more.
@@bobbergman5708 No body said we are entitled to anything. You seem to think you are entitled to a windfall return and not have to pay taxes on it....the fact remains that a large number of the people complaining bought investment properties and contributed to the mess we are in (obviously they are not the sole factor, but it is a factor none the less) and got massive returns based on lucky timing, and then think it's not fair when they have to pay tax on the money they are making off the very people they call entitled....I've owned multiple homes (was blessed to have family help me get started) and had to grind for every last dollar I have, and never once have I gotten the lucky 6 figure returns others have. And that's fine, but it also means I have zero emptathy for someone needing to pay a bit more on what is essentially a small lottery win.
U r not taking into account a low-mid income earner who has worked hard on owing an income property n depending on this one time sales event in one year to fund retirement and senior health care costs, thereby getting dinged big time. Not like staggered stock investment sales
Cherry! Whatever invest your money is in, be it real easte or valuable possessions ,such as marriage! If you sell it like divorce . I'm just telling you divorce is not free! I don't buy and invest for anything that I don't need ! That is why I have everything, and I don't pay extra taxes!
Potentially... the legislation hasn't come out yet. No proposed legislation. And there's always the concern of General Anti-avoidance Rule - which means CRA can impose a significant penalty if you do a transaction to simply avoid taxes.
@@RealEstateTaxTips The $250k limit is per person right? If 2 people owns the property, and the capital gain will need to be split 50/50. So if the gain is 300k, that means each person is 150K gain, which is under 250K threshold? Thanks for your great content as always 👍
It feels like you missed the point of the 2024 budget. Or maybe your bias is in favour of landlords. The change to the capital gains tax is designed to make real estate investing less appealing to corporations which may result in families getting to buy a principle residence. This budget is trying to put real estate into the hands of owner occupants, and make landlording pay taxes more like traditional investments. That is also why the FHBP was increased from $35,000 to $60,000 per purchaser. I think the $250,000 at 50% then increase to 66.6% after is a good way to tax those that are reducing the pool of homes from low and middle income Canadians.
Well said... i hate what this govt has done as much as most people, but this is one of the few things I have no problem with and should actually gradually help the market a little for buyers.
Canadians complain about safety, complain about cars being stolen, complain about taxes.....when are the people gonna put a stop to the madness and protect themselves. How long can Canadians let themself get screwed from every angle. Like even simple self defense isnt allowed. time to stop complaining on socials and use your numbers to create change!
Only 0.3 % of Canadian taxpayers are impacted. Does not feel like much here. Mostly targeted for LLCs where many investment properties are incorporated. I am curious what is the impact on housing supply both short term and long term
Exactly.... i hate this govt as much as anyone from the west, but the only people upset over this either A)don't fully understand who this really impacts or B)Are part of the problem buying up all these investment properties and making huge returns on unearned gains. If you make over 250k on a property for having lucky timing, I don't feel even a little bad for you havng to pay tax on 2/3 of your profits.
@@Ryanhwelton 1st: shoulda picked a better investment, the markets can get as good or better returns reliably.... 2nd: can still take those funds out using mortgage (then can claim the interest cost as tax deduction) and not pay capital gains (only payable when sold), finally the difference in capital gains paid is going to be pretty stinking minimal in relation to the amount of profit being made, and if its really big, then the house is being sold for enough to warrant it anyways.... There are many reasons why the housing market has gotten stupid, but the amount of investment in it is certainly a large part, housing being such a large part of investment strategy is a major factor in why our economy as a whole is not strong.....Just get tired of seeing the complete lack of compassion for the younger generations needing to just buy A home. My wife and I make about quarter of a mill per year and even on those salaries I don't know how a lot of people would afford something. It is nearly impossible for anyone that isn't in a seriously high paying field to buy a home without significant help from someone, and that is a very sad state of affairs.
@@Ryanhwelton They can still take that rental equity out with a mortgage (and then write off the interest)...capital gains only hit once the property is sold. If it's bought and paid for over 23 years it should be cashflow positive anyways and contribute similiar to a pension. What you are talking about here (and the above reply to my comment) also is not who this law is really targeting anyways, the people who get hit hardest by this don't own 1 home, or even 1 home and 1 rental as you have stated, but multiple rentals, then got lucky with market appreciation and are now upset that they have to pay a slightly higher portion of that unexpected and unearned gain back into the budget, that should (in theory) go to the programs to help the very people they profited off of.
Thanks Cherry. You’re amazing. Now, I’m discourage and worried about investing my hard earn money. Hope you can make a video on how to try to offset capital gain taxation.
Capital gains tax should be renamed The inflation tax, That's mostly what it is at the end of the day. They devalue the money and claim you made gains.
Trudeau says it is question of fairness. If that is the case why he did not he raise capital gains tax 9 years earlier during his first budget. It was not fair then and it is not fair now. Canada will lose investments which will be more than the taxes Trudeau will be collecting. Ripple effects on our economy will be drastic . Both Trudeau and Freeland needs to take high school level courses on economics. It is very sad when we choose politicians who are not qualified to their job. Both would have been thrown out if they worked for a private company.
But even if the inclusion rate is 67% instead of 50%, the tax on 600,000 capital gain will not be $200,000 when property is owned in corporation (as shown in this video). This is because capital gain in corporation is not added to your personal income and taxed the same. In your previous videos you said that it is better to own property as corporation because the tax on 50% of capital gain would be taxed something like 12% . The gain is not added to your personal income and taxed at the highest tax bracket. Please explain and advice on this.
If the corporation tax is only 12 -15% then the tax on $400,000 (67% of capital gain of $600,000) will only be $48,000 to $60,000. So this is still much less than what an ordinary individual will pay on their 50% inclusion.
When you play monopoly at the end of the game all the pieces need to go back into the box in order to play again. It is time to put all the cards and pieces back in the box and start a new round. the winners always want the game to keep playing and never come to an end.
@@RealEstateTaxTips that is exactly what I’m looking for, I’m planning that since a bunch of time because this is going to be worst and worst, and that confirm what I tough, I will try to freeze this ASAP. This country is no longer a place to invest in!
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could an estate freeze help?
Maybe only on shares of qualified small business shares.. not on rental properties.
Can definitely sell before June 25
Do you mean we will be taxed if we sell our primary residential property ?
@@RealEstateTaxTipsDo you mean we will be taxed if we sell our primary residential property ?
@@bull6950 primary residential should be still tax free.
You vote liberal and ndp that’s what you get. Tax everything, Canada is done under Trudeau.
J T is worse PM
The conservatives raised the inclusion rate to 75% in 1990 and the Liberals brought it back to 66% and eventually 50% in 2000.
I agree socialists destroy the will to work
I did not vote for him. So can I use the old rule?
@@Ryan-cf6lcwell it looks like the tables have turned doesn’t it Ryan ? If you are using this dated information as a reason to vote liberal, please DONT
Canadian medical doctor here. Over 10 years of university education and training. Didn’t really start making money until I was 30 years old. Government pays us $35 per patient visit. Been saving up over 2 decades of hard work in a professional corporation providing employment to medical assistants, and hoping to retire with a small investment. Tax increase is the reward I get for being a Canadian doctor! Thank you Cherry for sharing the anger I feel inside. No thanks to our government.
I hear you. It often feels like that our government is targeting us (professionals and all service focus businesses). From the 2017 tax change targeting just professionals not allowing us to split income, to the increase in capital gain inclusion rate and the entrpreneur incentive that specifically excludes all service professional businesses...
I feel that we aren't welcome here.
@@RealEstateTaxTipsI am considering becoming a non tax resident. Already emailed your office to discuss my personal circumstances so I can consider the tax implications and minimize the exit tax burden. Look forward to speaking with your team.
Our country is broken
absolutely! the trajectory is not good with these goons at the helm! i'm actively moving cash out of Canada
I'm with you. I'm angry with a journalists in charge of finance. Insane.
Who needed her parents to co sign her mortgage when she was 45
When Trudeau announced in 2015: "We are ready", he was ready to destroy Canada.
People who voted for Liberal should be reconsidered whether it was right or wrong. Do they really good look after Canadians or they want to save the world by squeezing all work hard Canadian to achieve their ideal goal!!!! Poor Canadian!!!
Can't agree more
😂 why bite the hand that feeds. They've literally doubled the net worth of your investment in 8 years at the expense of younger generations. Made the young and immigrants serfs by using a large portion of incomes to pay for rent and robbing them of the potential to gain wealth forever stuck paying you. Made policy to reduce supply and increase demand. Finally using tax money and debt to bail out banks and investors to protect the value of your property. Doesn't make sense that you would vote otherwise. Any other party will reduce demand by reducing immigration, increase supply by reducing red tape.
I am upset and disgusted with these proposed tax changes. There is almost no incentive to invest in real estate anymore with interest rates and the ridiculous tax in this country!
Well explained, thanks Cherry for laying this out and for giving your honest opinion which is shared by many, many people. This is infuriating.
Thanks Cherry. Now I have to rethink my real estate investment strategy.
Government literally put their hands in the pockets of middle class hardworking people
Yea they’re saying it’s only going to affect .12% of people , meanwhile 16% of people living in Ontario own a second property. The middle class gets hit on this one. I hope Pierre cancels
How is someone with 250k in capital gains middle class??!
@@dee24298a lot of people work for for companies and people who will get hit with these higher taxes. Layoffs are likely to cover the cost of taxes.
@dee24298 if you save and invest religiously in one asset class and over 20 years, with a bit of luck, you can make more than $250K too.
@@dee24298exactly, the people who hate this are the ones who have gotten lucky with timing and/or are already wealthy
Time to leave Canada.
Don't blame you... many people are saying the same thing too..
And go where exactly?😂
My grandmother was native and I was born in Newfoundland. I'm not leaving but I don't blame you for leaving. The land here is in my blood and I won't give up on it that easily. Then again this country isn't what profit I can make off it. I paid the highest marginal tax rate all my life.. You think taxes are high now you should of seen in the 80's and 90's.
the rich will leave the poor will still keep trying to suck the system dry.
Having loyalty to money and profit isn't something you can hide from others. Sooner or later you run out of places to hide
Very good points, tax integration is completely broken
Thank you for helping to digest the new, crappy budget.
The Government doesn't want people to work hard for their money. They prefer people to go on EI.
Why do they want people to go on EI? What strategy is this?
@@dapsolita easier to buy votes
@@dapsolita Easier to buy votes
Thanks Cherry!!!
Remember how they said “you’ll own nothing and be happy”? Think about how they’d need to steer the ship to reach that end goal. Freedom = Property Ownership don’t forget that.
Freedom = property ownership? Do you mean property ownership anywhere in the world?
@@dapsolita as long as it’s fee simple or better
Please make video on
1. life time exemption
2. Also regarding reinvesting and save capital gains
3.if I had refinanced my primary residence for down of investment property; how could it help in taxing purposes?
4. Deferral of capital gains
Thanks and keep doing great work on awaring middle class.
Thank you for the suggestions! Will keep these topics in mind.
Glad I didn't vote for Trudeau. This will wake up a lot of people who voted for Castreau (son of Castro). Socialism never works nor does any good in the world.
Homes should not run as a bussiness,corporation,it is your home keep it that way! Other wise we face more greed and bigger problems!
Why? If I can run the business form home it saves me money, it would cost my an arm and a leg to rent a space, so why not?
I believe this commentor means speculative activity in the housing market. Runaway home prices will destroy any economy. Take a look at Canadian productivity levels.
Not a home a rental
Thx. I am a senior on pension w an income property bought long ago depending on sale to use profit for senior health care. W this increased % inclusion n one time sales event it will mean much less for home care.i can’t evict tenant, market, sell, close before June 25/24.Impossible. Can’t CRA spread over 2 years like staggered stock sale disposal? Or can it be grandfathered?
Good ?
No future Realestate investing for me in Canada…
We own a cottage along with our home (primary residence). When we sell the cottage, will this new inclusion rate apply?
Yes
Yup !
absolutely…. Unless you sell it before June 15. Good luck!
Justin T is worse PM OF CANADA. Please add more video shows unlimited spending by LIBERALS
this increase should have been limited to residential real estate to flush out the speculators. Canadians are too heavily invested in residential RE, keeping it at 50% for other investment types would have shifted money away from RE, reduced speculative demand.
In my humble opinion, it should be applied only prospectively not retroactively. A valuation should be done today on assets owned, and capital gain accrued up to today should have 50% inclusion and going forward it could be 2/3 inclusion rate.
And government should control their spending!
@@RealEstateTaxTips It is impossible to implement what you said. How can you verify the value of all investment real estate in the country? May be it is easier to keep 50% Capital Gain tax for those keeping the properties for over 10 years.
Ive been reading alot of comments on here and i am disgusted by so many with the" i dont have you shouldnt either"mentality . People that agree with any form of taxation need to look at the big picture here. This goverment cannot and has not created anything that will increase our gdp. All they do is expand the goverment and create worthless programs that help no one. This is the last straw ill be taking my 2 trades and engineering to another country where hard work is rewarded. Saudi arabia is looking really good right now.
Well said
Since you are comparing apples and oranges in this comment at least add a common denominator: rotten.
Greed is unhealthy; whether it exists in government or in individuals.
@dapsolita I agree greed is not good at all so why is the goverment so damn greedy?
Good! I am happy to see you leaving for Saudi Arabia. You will become become a foreign worker and get your backend kicked when the boss is not happy.
Blame each and every Liberal voter for this mess!
Making over $250K Capital Gain in a year is a mess! I love this mess.
Thank you for these videos, Cherry. They are really great! I'm wondering why you assume 50% tax rate. Are you ballparking federal and provincial tax?
Usually the highest marginal tax rate an individual has to pay is about 50%. Corporation is 50% with 30% refundable. Hence I used 50% just to be on the conservative side.
Thank you Cherry, awesome presentation as always. I have 2 question. 1. The capital cost allowance : when we sell a property, we need to declare the cap allowance as income. Would this be impacted but the new 66.7% tax on cap gain? 2. The cap gain made on a property that is own by 2 people: if cap gain is 300k. We divide this between 2 people. So cap gain is only 150k which is then not impacted by the cahnge proposed by Justin. Is this correct? Thank you very much!
Thank you ! I didn’t realize corporations rate was higher . It’s crazy cause unlike the US we can’t differ
I'm hoping that they would roll back the corporation and trust ...but again, that's a hope. It doesn't make sense they penalize the corporation and trust...
This is the new Canada, like it or not, from now on Canadian should live in tent, no property tax, no capital gain although too the most rated high standard of living year after year.
This Canadian government should estimate the dollar value of purchase then and now then calculate the capital gain that will be fair for owners. For EX. Buying a house 5 years ago for $400K is equivalent to $1 million today if sold for $1.1 you should pay for $1K only that the fair capital gain because buying a new home today will cost you at least $1.5 million just to accommodate the growing of your family. This Canadian Government need to learn a lot, and to stop corruption within and stop spending tax money for useless politicians
Pay for $100K only instead of $1K my apology
When you hold investments over a period of long time like real estate, a large portion of your gains comes from inflation. This is the origin of the 50%. Now you're being taxed on inflation too?
Hi < I have a question, imagine 2 people ( 2 people on the title ) bought a house in 2014 for 1.5m and at that time both were permanent residents, now one of them is Canadian and one of them lost the residency (foreigner now) , and they rented the property for two years if they sell their property after the end of rental agreement for 2 M, how much Tax should they pay?
Thank you for protecting the citizens of this land.
How does it affect corps with rental income? If you sell with a vtb can you offset the cap gains?
Hey Cherry, Thank you for the amazing content. Your videos are really helpful.
I would be grateful if you could help me understand a bit about sole proprietor tax.
I am working full-time and planning to day trade while making videos on CZcams as a side hustle. Am I eligible for sole proprietor filing? If so, can I write off expenses for both day trading and content creation?
Great Video Cherry! Thank you for dissecting the crappy budget. The tax man is subjected to these rules as well, maybe there is a loophole?
Sadly the legislation hasn't come out yet. So we don't even know if we can prematurely crystalize the capital gain before June 25.
if your mom's property is the primary resident of her, she would just apply the principal resident exemption and get 0 tax
I totally agree with you,I have the same anger.
It is completely rip off.
We are the people who contribute to the society more than the other and now we are getting penalized in the new rules.
Thank you to inform people.
Absolutely. We're the one being blamed when the government has mismanaged the country for the last 8 years
The negative to borrowing 60k against your rrsp is that it will put you 5 years behind on your retirement plan because once you get that mortgage your are at best just able to replace your rrsp you borrowed but unlikely going to be adding to it while paying a mortgage.
Correct but what’s an alternative? Never purchase home?
@realestatetaxtips would you know how capital gains affects a foreign property sale (with a country that has a tax agreement with Canada to prevent double taxation)? Thanks for your informative videos.
Same treatment as if the properties are located in Canada.
@RealEstateTaxTips thank you for confirming Cherry. Would you know if a wealth tax paid to foreign country (eg. $10K/Year to the Netherlands on investment property) can be deducted from Canadian capital gains tax when foreign property is sold? In Netherlands, there is no capital gains tax on sale of property but there is a high wealth tax on owing an investment property that must be paid annually to Dutch government.
Thanks for your honesty and frankness. Govt is making it harder for har working Canadians. Time to rethink Canada. Question. Does this apply to gain on margin act as well?
Can't agree more
Margin accounts are not exempt from capital gains so it should be affected as well.
Time to chill and lay flat and collect social security
Thank you very much for your honesty and professional information. I live in B.C. and am outraged at the Liberals and NDP for yet another massive tax grab. I love my country (born and raised here). I am retired and have been a business owner for many years. I have paid both personal and corporate taxes for decades. When I invest with my 'after tax' dollars and then if I'm lucky, I actually earn a profit - I'm taxed yet again! I have lost complete faith in all politicians (federal, provincial and even municipal). We are being taxed into oblivion. This country will soon acquire a negative reputation worldwide as a place NOT TO INVEST IN. My children and grandchildren are going to experience a reduction in their standard of living. Maybe it's time to think about leaving Canada or at least having our hard earned money leave.
Fantastic explanation. You provided an understandable excel example on how to explain this to clients when it comes up. Hope you don't mind that I am going to use your excel format (credit to the source of course 😉).
Does any one know if Pierre
Poilievre going to undo this nonsense capital gain changes ? I hope he does . The problem with taxes is usually when one government introduces them the future governments enjoy its income and won’t restore the original rules.
Election is Oct 2025 the latest. Even if he comes in power, we might not see it reverted immediately. :(
@@mdf3006 Watch your language here. Canadians are generally polite and respectful. Just because you have a different political view does not mean that you have the right to call others' opinion as "sociopath".
If you have issues, complain to your MP, complain to Justin Trudeau. If he's doing a great job, we wouldn't be at the lowest productivity rate according to Bank of Canada, would we?
@@mdf3006wow I'm not sure what worlds you're living in, but introducing a tax that's retroactive is going to hurt people who are trying to save for their families just a little bit more.
JT just makes me think of the abuse of the emergencies act, WE scandal, SNC Lavalin scandal, $6000 a night hotel rooms, Arrive can scam, him wearing blackface, then wearing the Indian garb, Aga Khan scandal, oh yeah, then 35 billion for the Trans mountain pipeline... I don't personally approve of any of these things, do you?
I'm open to learning where I'm mistaken but don't think I am 🤷♂️
Key take away from these last number of months including the disastrous budget…. The government hates you having money. Carbon taxes, wasteful spending, the budget BS etc. I wonder 💭 when Canadians will stop participating in this corruption? Move your assets out of Canada and stop filing. Stop giving money to the monster that wants you to be in a socialist hell. They can waste money like it is going out of style while you scrimp and save and then they steal it to waste or give to their corrupt buddies.
Trudeau has to go...
Totally agree with you Cherry.
If the govt is discouraging people from owning or investing properties. Their money maybe going to move out of Canada and invest somewhere where the tax is lower. Canada will become a poorer country over time.
Isn’t the first $250,000 personal capital gain is exempted? If 50% of the $250K is taxable income, then why the govt saying upto 250K personal gain is exempted?
Cherry i have to say, i started following you with this video as im starting my investement in real estate, your one of the most amazing ressources on this subject i researched. You are really clear, with amazing examples, now i have to listen to all your videos :)
Thank you, means a lot!
The less provocative number in all this is taxes effectively have gone from 26% to 37%. People think capital gains tax went from 50% to 67% - it didn’t. The tax inclusion rate did. Still sucks.
we have to vote Trudeau out, his team is not capable, Freeland doesn't have any financial background and this budget doesn't help Canada economy and promote hardworking. Very shortsight
Very helpful video. Thanks for explaining in detail.
🎻 honestly it should probably be higher when it comes to unimproved non-productive assets like real estate.
People love to complain about our lack of productivity in Canada… tax policies favouriting real estate is part of the reason…
Principal Residence Exemption still available？Thanks
Yes for now
What about the capital gain on the sale of your principal residence ? Has this changed ?
No change! Tax Free
So do we never sell real estate? Just rent it out instead?
Yep, that's an option. Outlive this tax rule change is an option.
Always love to hear your point of view on tax. Great content as always.
Appreciate it!
Cherry, question please: With the inclusion rate increased to two-thirds for all capital gains realized by corporations, will the amount going to NERDTOH be computed as CapitalGain*(2/3)*0.3067? It would tiny consolation, as part of extra tax will be recovered when corporation distributes non-eligible dividend to the owner(s).
Coast to coast, Canada's toast. I wouldn't be surprised if CPP will be severely watered down in the next 5-10 years, and if they even do away with TFSAs soon.
I'm finding less and less reasons to stay here...digital nomad VISAs are looking very promising.
Someone made this very smart comment "The latest budget from the Liberal-NDP alliance once again targets small business owners, demonstrating a persistent yet misguided obsession with painting them as the wealthy elite. This echoes the 2017 debacle when the Liberal government smeared doctors as tax cheats, alongside their relentless targeting of Personal Services Businesses (PSBs). Wrapping these policies under the guise of "taxing the rich" reeks of hypocrisy. The reality is that most small business owners are not the privileged tycoons this government would have us believe; they are hardworking individuals who lack the financial muscle to fend off such fiscal onslaughts with expensive legal and accounting teams. Instead of acknowledging the genuine risk and investment these people bring to the economy, the government prefers to cast them as villains in their budgetary theater. Owning property or a small business isn’t a mark of avarice but a stab at financial security, often aiming for a modest retirement. To imply these individuals are akin to greedy landlords hiking rents obscenely is not just unfair-it's a cynical move to squeeze those who are easiest to target, not those who are truly wealthy."
Do you think house price will go down. I’m planning to invest $2m but it seems exist tax would be too much when or if I leave Canada.
Can I borrow against my stock portfolio and savings to offset taxes? The stock margin investment rate is 7% which is very high to make meaningful gains to offest the cost of interest.
This is what happens when Canadians vote in a PM who hires a finance minister who has a degree in journalism and literature. What a joke, you may also want to look up the education background of Canada’s health minister, history and political science. No wonder things are running so smoothly in this country.
There should be a grandfather clause for rules like these, how can you tell people to save fore retirement by investment for years and then change the rules just before people need to retire? 🤷♂️
The government is creating a system where houses aren't a commodity and instead a place to live. So someone bought a home decades ago for $60,000 now it's worth $1,000,000 they have made rental profits for 20-30 years.. boo hoo. There is so much money laundering from China into our real estate that this seems like a good start in policy so Canadian people can own 1 home once in their life at least
Just wait until your parents pass away and you inherit that house that has capital gains on it.
This is literally pulling the rug in middle class people who realize that investing is the only way to get ahead in this economy. Just working a 9-5 job isn’t enough anymore. The government should be lowering the barriers to investing, maybe reducing the CGT to incentivize more people to invest, and then reap the rewards. Increasing the CGT is very short sighted, and will make things worse for everyone.
How do we get rid of Trudeau, anything we can do as common folk? He is simply a horrible leader and possible person too.
Are your calculation for corporate tax correct? 50%. Are corporations not taxed more favourable at 33% in Ontario?
If a small business company for stock trading, can apply lifetime capital gains exemption. Thanks
This is exactly our use case.
I've a question, I own private REIT investments in Corporation for last 5-6 years and I get distribution(return of capital), the adjusted cost base has gone down, can I just sell the REIT units to trigger capital gain before June 25th and buy it back again after 30 days ?
Great Video. Notice how the Liberal voting base the Public Service is never penalized with their pensions for life and outrageous salaries.
Yes. They don't need to take responsibility of wasting the tax dollars, they turn around to find someone to foot their crazy spending.
Pretty hard to feel bad for the people this hits, it’s litterally only capital gains over 250k and only the gains not held in a registered account… so litterally people that are already in reasonable shape, it’s the people trying to buy a home and actually start to build their future that need the help
So you want my money so that you can build your future? I started with nothing and now that I’ve built it and now your entitled to it?
@@bobbergman5708 never said I was entitled to anything, I am saying you’re not entitled to ridiculous growth of capital assets that haven’t been earned (someone who bought a house for 200k is not entitled to 800k for that house that they did nothing other be born at the right time and get lucky timing)…. I’ve earned every last thing I’ve had, and due to sacrificing in a lot of areas I’m doing ok, but I’ve never had that kind of crazy luck and likely never will. Capital gains also don’t even apply to the crazy unearned appreciation on principal residences either! This new increase is only on people who are fortunate enough to have enough investments in non registered assets to even see 250k in capital gains (which is only taxed at 2/3 of income bracket with this hike and only on the gain not the principle, so not paying tax a 2nd time as some claim) So sorry no I don’t feel the least bit of empathy for that.
I have seen many responses like this and do not understand it. I bought a property 23 years ago, lived there for 7 years then kept it as a rental with hopes of one day using it as a large portion of my retirement. For YEARS it was cash negative but I persisted and invested money and time into the property, providing a good and very affordable home for my tenants. I knew property value increases would eventually pay off and I would recover my investment. Now I am a few years from retirement and the government wants a bigger piece. The government I understand, its comments that imply that as a person who was willing to risk EVERYTHING is somehow the problem and shouldn’t complain when they are forced to pay even more.
@@bobbergman5708 No body said we are entitled to anything. You seem to think you are entitled to a windfall return and not have to pay taxes on it....the fact remains that a large number of the people complaining bought investment properties and contributed to the mess we are in (obviously they are not the sole factor, but it is a factor none the less) and got massive returns based on lucky timing, and then think it's not fair when they have to pay tax on the money they are making off the very people they call entitled....I've owned multiple homes (was blessed to have family help me get started) and had to grind for every last dollar I have, and never once have I gotten the lucky 6 figure returns others have. And that's fine, but it also means I have zero emptathy for someone needing to pay a bit more on what is essentially a small lottery win.
U r not taking into account a low-mid income earner who has worked hard on owing an income property n depending on this one time sales event in one year to fund retirement and senior health care costs, thereby getting dinged big time. Not like staggered stock investment sales
Trudeau and his journalist finance minister are super annoying.
But….Canadians elected him. And not just once.
Ugh I hate that the government changed the rules on me. The same rules that will no longer work for young Canadians 😂
Can't wait for tokenization of property, sell 250000 per year.
Great explanation, thanks!
Thanks
The damage is done 😮
Cherry! Whatever invest your money is in, be it real easte or valuable possessions ,such as marriage! If you sell it like divorce . I'm just telling you divorce is not free! I don't buy and invest for anything that I don't need ! That is why I have everything, and I don't pay extra taxes!
Great job Cherry!
Thanks
Can we sell our condo/property investment into installment (80% +2O%) to avoid the over $250,000 new capital tax issue ?
Actually the inflation created by high government spending hurts the poor and middle class more than rich people.
@@ernstfischer8976 I agree. Look at our grocery bill and also the gas bill.
Potentially... the legislation hasn't come out yet. No proposed legislation. And there's always the concern of General Anti-avoidance Rule - which means CRA can impose a significant penalty if you do a transaction to simply avoid taxes.
@@RealEstateTaxTips your channel is great! 👍
@@RealEstateTaxTips The $250k limit is per person right? If 2 people owns the property, and the capital gain will need to be split 50/50. So if the gain is 300k, that means each person is 150K gain, which is under 250K threshold? Thanks for your great content as always 👍
Makes me mad too. If anything the capital gains tax should've been lowered or removed entirely. Anything over 50% is confiscation.
It feels like you missed the point of the 2024 budget. Or maybe your bias is in favour of landlords. The change to the capital gains tax is designed to make real estate investing less appealing to corporations which may result in families getting to buy a principle residence. This budget is trying to put real estate into the hands of owner occupants, and make landlording pay taxes more like traditional investments. That is also why the FHBP was increased from $35,000 to $60,000 per purchaser. I think the $250,000 at 50% then increase to 66.6% after is a good way to tax those that are reducing the pool of homes from low and middle income Canadians.
Well said... i hate what this govt has done as much as most people, but this is one of the few things I have no problem with and should actually gradually help the market a little for buyers.
Canadians complain about safety, complain about cars being stolen, complain about taxes.....when are the people gonna put a stop to the madness and protect themselves. How long can Canadians let themself get screwed from every angle. Like even simple self defense isnt allowed. time to stop complaining on socials and use your numbers to create change!
I live in Quebec and I think Quebec also taxes is in capital taxes
Only 0.3 % of Canadian taxpayers are impacted. Does not feel like much here. Mostly targeted for LLCs where many investment properties are incorporated. I am curious what is the impact on housing supply both short term and long term
Exactly.... i hate this govt as much as anyone from the west, but the only people upset over this either A)don't fully understand who this really impacts or B)Are part of the problem buying up all these investment properties and making huge returns on unearned gains. If you make over 250k on a property for having lucky timing, I don't feel even a little bad for you havng to pay tax on 2/3 of your profits.
Every landlord in the country is affected.
@@philip1065what about someone who has held a rental for 23 years as part of their retirement?
@@Ryanhwelton 1st: shoulda picked a better investment, the markets can get as good or better returns reliably.... 2nd: can still take those funds out using mortgage (then can claim the interest cost as tax deduction) and not pay capital gains (only payable when sold), finally the difference in capital gains paid is going to be pretty stinking minimal in relation to the amount of profit being made, and if its really big, then the house is being sold for enough to warrant it anyways.... There are many reasons why the housing market has gotten stupid, but the amount of investment in it is certainly a large part, housing being such a large part of investment strategy is a major factor in why our economy as a whole is not strong.....Just get tired of seeing the complete lack of compassion for the younger generations needing to just buy A home. My wife and I make about quarter of a mill per year and even on those salaries I don't know how a lot of people would afford something. It is nearly impossible for anyone that isn't in a seriously high paying field to buy a home without significant help from someone, and that is a very sad state of affairs.
@@Ryanhwelton They can still take that rental equity out with a mortgage (and then write off the interest)...capital gains only hit once the property is sold. If it's bought and paid for over 23 years it should be cashflow positive anyways and contribute similiar to a pension. What you are talking about here (and the above reply to my comment) also is not who this law is really targeting anyways, the people who get hit hardest by this don't own 1 home, or even 1 home and 1 rental as you have stated, but multiple rentals, then got lucky with market appreciation and are now upset that they have to pay a slightly higher portion of that unexpected and unearned gain back into the budget, that should (in theory) go to the programs to help the very people they profited off of.
Thanks Cherry. You’re amazing. Now, I’m discourage and worried about investing my hard earn money.
Hope you can make a video on how to try to offset capital gain taxation.
Capital gains tax should be renamed The inflation tax, That's mostly what it is at the end of the day. They devalue the money and claim you made gains.
Vote them out next year. Spread word to Asians in Canada. Days of voting liberal is over!
Hi Cherry, you look so sad with this changes. Im sorry! With this changes, Do you see any value for holding real estate in a corporation?
Trudeau says it is question of fairness. If that is the case why he did not he raise capital gains tax 9 years earlier during his first budget. It was not fair then and it is not fair now. Canada will lose investments which will be more than the taxes Trudeau will be collecting. Ripple effects on our economy will be drastic . Both Trudeau and Freeland needs to take high school level courses on economics. It is very sad when we choose politicians who are not qualified to their job. Both would have been thrown out if they worked for a private company.
But even if the inclusion rate is 67% instead of 50%, the tax on 600,000 capital gain will not be $200,000 when property is owned in corporation (as shown in this video). This is because capital gain in corporation is not added to your personal income and taxed the same. In your previous videos you said that it is better to own property as corporation because the tax on 50% of capital gain would be taxed something like 12% . The gain is not added to your personal income and taxed at the highest tax bracket. Please explain and advice on this.
If the corporation tax is only 12 -15% then the tax on $400,000 (67% of capital gain of $600,000) will only be $48,000 to $60,000. So this is still much less than what an ordinary individual will pay on their 50% inclusion.
A shitty budget from a really shitty government. What else could be expected of them...
As an individual I would look to reverse mortgage the property and withdraw my capital gains that way. Not sure can do but worth a look
100% unless sell before June 25... but then again, the actual legislation hasn't come out yet so ...even if we take a best guess, it may not be right.
Do not claim CCA 🙂↕️
I love your assessment. Keep up the great work. Thank you.
Much appreciated!
When you play monopoly at the end of the game all the pieces need to go back into the box in order to play again. It is time to put all the cards and pieces back in the box and start a new round. the winners always want the game to keep playing and never come to an end.
Sounds like you want revolution and WW3.
We deserve it. People voted Trudeau 3 times and that’s what you get. Remember, he studied drama and used a lot of tax dollars for his vacations.
I really thinking about other country for investment… best is to go away…
Sadly we are dinged on world wide income. The only way out is to become a non-resident of Canada - which in itself is also a process.
@@RealEstateTaxTips that is exactly what I’m looking for, I’m planning that since a bunch of time because this is going to be worst and worst, and that confirm what I tough, I will try to freeze this ASAP. This country is no longer a place to invest in!
@@RealEstateTaxTips Great job by the way, your explanations are one of the clearer I have seen.
Could you simply sell the shares of the corporation instead of selling the house?
You can but it is messy and not tax efficient either.
@RealEstateTaxTips could you use your capital gains exemption on the sale of shares though? This saving the tax on your first transactions