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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.
Did you not investment money you were making? We have a mathematically & economically ILLITERATES at the helm! That being said, we need more doctors due to our exploding emergency rooms!
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 :)
@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 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.
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
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 TH-cam 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?
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.
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.
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.
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 😉).
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 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!
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
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...
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?
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.
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?
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.
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?
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.
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.
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.
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).
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.
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 ?
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!
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.
Justin Trudeau is the most hated person in the world. Canadians hate him. The world leaders hate him. Sophie divorced him. The implosion of Canada will be his legacy.
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."
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.
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?
@@RealEstateTaxTips which is not bad, but applicable only for equipment purchased AFTER the budget day. So existing equipment can't be depreciated unfortunately
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.
Ironically, wasn't it Pierre E Trudeau who introduced the capital gains tax in 1972 because they had to pay for massive budget deficits....due to their overspending... does any of this sound familiar...
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.
If there are unrealized capital losses in a corporation, is it more advantageous to realize the capital loss before June 25, to be applied to future capital gains? Based on how capital losses are applied to capital gains when the inclusion rates are different (based on info on the CRA website), this would appear to be the case as the adjustment factor would be (67%/50%) 134% x net capital loss. Can you comment?
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.
@@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!
Even with the increased taxes, Trudope's government will be selling $228B debts in the current budget yr to pay for its spending, that's up from $203B and $185B in the last 2 fiscal yrs.
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.
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!
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 👍
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
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.
Could your mom "sell" you the property before Jun to lock in the full appreciation at 50% inclusion? Ignoring the fact whether it makes sense for you from a tax/income perspective.
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!
The goal is to make Canadian residential real estate investing unattractive… …and it’s working. Invest in profitable businesses. Residential real estate state is no longer profitable.
I'm sorry, the rule is inclusive of businesses as well. Not exclusive to real estate. And I also have businesses as well. This rule change also makes me rethink about reinvestment and growing my business.
Someone just made this very smart comment - I think you could appreciate: "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."
So where does the incentive to create more housing come from? Regulations already make it insanely expensive to build. Liberal philosophy revolves around a fixed pie. If no other house could ever be built in Canada (which inflation/redtape/government regulation seems to be attempting), then disincentivizing businesses to get involved might make sense, as it would reduce the potential buyers for a fixed number of houses. But if businesses are incentivized to create new houses/dwelling units, then the supply will naturally increase. Currently the government is stopping housing plus importing about a million immigrants a year... then is shocked when housing becomes expensive.
The cost will be added to customer-buyers. The more cost, the more tax harvesting. The election is next year at the latest. If conservatives are in charge, the capital gain tax may be reduced back to 50% or even lower.
Most of the Mom & Pop real estate investors are shared between husband & wife; they will most likely Not to exceed $500K ($250K each) Capital Gain in a year. The elephant in the room is the real estate investors holding the properties in Corporation for better taxation purpose; I guess you win some & you loss some.
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
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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.
Did you not investment money you were making?
We have a mathematically & economically ILLITERATES at the helm! That being said, we need more doctors due to our exploding emergency rooms!
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.
Our country is broken
absolutely! the trajectory is not good with these goons at the helm! i'm actively moving cash out of Canada
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!
Thanks Cherry. Now I have to rethink my real estate investment strategy.
Thank you❣️💪🗣️this is why need to know family inheritance tax laws, etc too- great work🥳
Well explained, thanks Cherry for laying this out and for giving your honest opinion which is shared by many, many people. This is infuriating.
@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 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
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
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 TH-cam 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?
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.
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.
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!
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.
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 😉).
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 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!
How does it affect corps with rental income? If you sell with a vtb can you offset the cap gains?
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
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...
Thank you for helping to digest the new, crappy budget.
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 ?
Always love to hear your point of view on tax. Great content as always.
Appreciate it!
Very good points, tax integration is completely broken
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
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?
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
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
If a small business company for stock trading, can apply lifetime capital gains exemption. Thanks
thank ou very good information
Thank you!
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
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?
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?
Very helpful video. Thanks for explaining in detail.
Are your calculation for corporate tax correct? 50%. Are corporations not taxed more favourable at 33% in Ontario?
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
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 love your assessment. Keep up the great work. Thank you.
Much appreciated!
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.
Great explanation, thanks!
Thanks
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).
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.
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 ?
How do you sell without tanking the market?
That depends on your market and the asset class you're selling and how much you're holding.
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
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.
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.
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.
I live in Quebec and I think Quebec also taxes is in capital taxes
Justin T is worse PM OF CANADA. Please add more video shows unlimited spending by LIBERALS
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!
A shitty budget from a really shitty government. What else could be expected of them...
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.
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?
Great video!
Thanks!
Justin Trudeau is the most hated person in the world. Canadians hate him. The world leaders hate him. Sophie divorced him. The implosion of Canada will be his legacy.
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."
This is exactly our use case.
No future Realestate investing for me in Canada…
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.
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
Blame each and every Liberal voter for this mess!
Making over $250K Capital Gain in a year is a mess! I love this mess.
Well, CCA for computer and network equipment will become basically Class 52 with 100% rate
Yep, absolutely.
@@RealEstateTaxTips which is not bad, but applicable only for equipment purchased AFTER the budget day. So existing equipment can't be depreciated unfortunately
With these high inflation and housing crisis, we need drastic tax reforms on taxing investors and cooperation.
Liberal SUCKS!
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.
Ironically, wasn't it Pierre E Trudeau who introduced the capital gains tax in 1972 because they had to pay for massive budget deficits....due to their overspending... does any of this sound familiar...
Sad
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.
Thank you for protecting the citizens of this land.
If there are unrealized capital losses in a corporation, is it more advantageous to realize the capital loss before June 25, to be applied to future capital gains? Based on how capital losses are applied to capital gains when the inclusion rates are different (based on info on the CRA website), this would appear to be the case as the adjustment factor would be (67%/50%) 134% x net capital loss. Can you comment?
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.
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.
Can't wait to vote out our greedy Communist government
Even with the increased taxes, Trudope's government will be selling $228B debts in the current budget yr to pay for its spending, that's up from $203B and $185B in the last 2 fiscal yrs.
Thank you. Truth.
Ugh I hate that the government changed the rules on me. The same rules that will no longer work for young Canadians 😂
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.
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!
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 👍
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 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.
Could your mom "sell" you the property before Jun to lock in the full appreciation at 50% inclusion? Ignoring the fact whether it makes sense for you from a tax/income perspective.
Can't wait for tokenization of property, sell 250000 per year.
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!
The goal is to make Canadian residential real estate investing unattractive…
…and it’s working.
Invest in profitable businesses.
Residential real estate state is no longer profitable.
I'm sorry, the rule is inclusive of businesses as well. Not exclusive to real estate.
And I also have businesses as well. This rule change also makes me rethink about reinvestment and growing my business.
Someone just made this very smart comment - I think you could appreciate:
"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."
Exactly.
So where does the incentive to create more housing come from? Regulations already make it insanely expensive to build. Liberal philosophy revolves around a fixed pie. If no other house could ever be built in Canada (which inflation/redtape/government regulation seems to be attempting), then disincentivizing businesses to get involved might make sense, as it would reduce the potential buyers for a fixed number of houses. But if businesses are incentivized to create new houses/dwelling units, then the supply will naturally increase. Currently the government is stopping housing plus importing about a million immigrants a year... then is shocked when housing becomes expensive.
Yup
Thank you Cherry for the timely update. I appreciate your help
You are so welcome
The cost will be added to customer-buyers. The more cost, the more tax harvesting. The election is next year at the latest. If conservatives are in charge, the capital gain tax may be reduced back to 50% or even lower.
I don’t know it’s probably just me but everything that’s happening now these days to make our life difficult and Unfair.
Most of the Mom & Pop real estate investors are shared between husband & wife; they will most likely Not to exceed $500K ($250K each) Capital Gain in a year. The elephant in the room is the real estate investors holding the properties in Corporation for better taxation purpose; I guess you win some & you loss some.
Yes, absolutely. Wrong in many different levels - especially since I'm an accountant and tax integration is kinda like our "governing rule".
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
People with cottages , small rentals , businesses sold , art , coins ,
Yep
if your mom's property is the primary resident of her, she would just apply the principal resident exemption and get 0 tax
What if you move to the property yourself for a year and then sell it after? It will be your primary and then you don't pay anything, right?
No. It is based on the # of years as your primary residence vs not.
No, it would only count as a primary residence exemption for the period she lived there, not the years when it was an investment property.
The damage is done 😮
How do we get rid of Trudeau, anything we can do as common folk? He is simply a horrible leader and possible person too.
It's time to send the asshole to Cuba.