The federal government of Canada has made significant changes to the capital gains tax in the 2024 federal budget. The capital gains inclusion rate, which determines how much of your capital gain is taxable, has been increased from 50% to 66%.  This change means that a larger portion of the profit made from the sale of assets such as real estate, stocks, or other investments will be subject to income tax.

For homeowners with multiple properties, this adjustment has several implications:

1. **Increased Tax Liability**: If you sell a secondary property (not your primary residence), a larger fraction of the gains will now be taxable. For instance, if you make a profit of $100,000 on the sale of a secondary property, $66,000 of that profit would now be taxable at your marginal tax rate, compared to $50,000 previously.

2. **Impact on Investment Strategies**: This increase might affect how property owners manage their investments. Homeowners might be more cautious about flipping properties or might delay selling properties to avoid higher taxes.

3. **Consideration for Rental Properties**: Those who own rental properties might see a decrease in their after-tax profit when they decide to sell, which could influence decisions about holding or selling such investments.

These changes aim to generate additional revenue for the government but could lead to shifts in the real estate market and investment behaviors. Property investors, particularly those with multiple properties, will need to reconsider their strategies and possibly seek financial advice to navigate these changes effectively.  If you'd like to read more on the Capital Gains Tax changes proposed by the Government of Canada you can click on this Link:  Capital Gain Tax Amendments