Hey guys, how about a free Mac or IPhone at the end of this year? Wealthsimple will give you a free Mac or IPhone 16 💻📱when you transfer $100,000 or more to Wealthsimple, promo ends December 13, 2024. Why not, if you were planning to invest anyway! Simply use my referral code: ZCZSZQ here: www.wealthsimple.com/invite, and make sure you register for the Mac/IPhone promo! *Note: You'll need to maintain your funds for 365 days after the funding period ends.
The internet has all the answers and also with so many RUclips sites now from legit people. If you are paying too much tax which is all subjective then you likely have done next to nothing to learn what to do! Every speak to a lawyer, a real accountant or speak with or ask for guidance from someone who has lots of $$$ (like +$5 million)?
You can always move to Russia where their interest rate is at (minimum) 21%. I heard they welcome immigrants there right now as their population is rapidly decreasing...
I'm so grateful that our taxes are increasing, those of us who have worked our asses off and managed to invest are now being penalized even more. Thank you trudeau. I'm so happy to see my hard earned tax money flow freely to ukraine and many other countries. Makes me so happy when I have to work weekends and nights too.
It is a lot of capital gains tax because -It doesn't count toward any CPP or benefits. -It doesn't account for lifetime or previous years losses (we aren't given a credit when losing money unless within 3 years) -It doesn't account for land taxes and renovation losses (10 year land tax could run you $120k itself) So realistically, you've been paying land tax, land transfer tax, renovation and previous losses costs without any tax credit but you're expected anytime you come out on top, to pay a capital gains tax on gains from an initial investment that was taxed already.
Capital Losses can be carried forward for the rest of your life and applied to protect future gains, indefinitely (not 3 years) They can also be carried backward, to claim back taxes you already paid on capital gains in the past, but only the past three years.
@@BCSimonYT If you had $50 000 in gains two years ago, $25 000 went on your tax return, and you paid whatever your marginal tax rate was. Say 30% or $7500. If you have $50 000 in losses this year, half can be applied against any gains from the previous three years, so $25 000 can be used to reduce your taxable income from 2 years ago (when you had $25 000 in taxable capital gains), so you get back the $7500 you paid. The math is symmetrical. Only 3 years backward, or indefinitely forward.
@@GK-yi4xv ah okay, thanks. I'm actually in the process of filing that myself. It still doesn't recoup my 10c lost on the dollar though, but that would be asking too much :D
Good explanation. One thing you didn't mention is that raising any taxes also raises inflation. As businesses have to pay more taxes, they raise prices to compensate, and that's regardless if it's a plumber, carpenter or grocery store.
That's not exactly true, although it can feel that way to the end consumer. Raising taxes does *not* raise inflation. Increasing the price of goods and services raises inflation. This is actually quite a big difference. However, because of the system that we live in, it might not feel any different to the average person. This is because businesses can just freely pass all their additional expenses, such as taxes, on to the consumer. This is why price ceilings, if coordinated properly with taxation (or a myriad of other mass wealth accumulation limiting policies), are not necessarily the boogeyman the political right make them out to be. They can actually be a way to raise taxes, which can be put back in to benefitting society in the form of transportation, healthcare, infrastructure, etc, while preventing corporations from using the guise of inflation to bump prices up a little extra and price gouge the consumer. There's a reason why our government and majority of people in western Capitalist Social Democracies are in debt and the 1% have gained more wealth than at any point in history.
If the government interfered with pricing imposing price caps, I'd run away in a hurry. They can't get government waste under control, and would bloat the alreasy massive buerocracy 100x larger to administrator and enforce the mess. The insane GST rebate of a measly $250.00 will cost us over $1B to process, imagine what $1B could do when put to good use, instead of used to spin wheels. The government is a massive waste machine, that mostly harms businesses rather than helps them.
I don't get why capital gains tax is so high? We work our whole lives for our property and then when we want to sell it, a 1/4 of the earnings are GONE. Not cool. Eliminate all taxes. Simplify shit!!!!!!!!!!!!!!!!!
It's great for the province's coffers ; ) It was higher in the late 80s to 2000. Here is an example on how one can be ahead: If you have a total income of 90K a year in BC. And you have an asset now worth 960K and originally the cost of the asset was 500K. Your capital gain is 460K. So your taxable gain is 265,007 with the inclusion rate. Tax on that gain would be 122,538 instead of 103,809, which is what is would have been before the introduction of the inclusive rate. Your net proceeds after tax would be 337,462 (460K minus 122,538 equals 337,462). So you would be paying 18,729 in more taxes than you would have before the inclusive rate came into affect. So in summary, you started out with an asset that cost you 500K and after selling your asset and paying the capital gains tax, you make net proceed of 337,262, which is about a 67 percent. Before the inclusion rate was introduced, you would have made 71 percent. Of course this is based on taking all federal and provincial taxes and surtaxes into account and the basic personal tax credit.
I love Canada but if offered a better paying job and less taxes in the US, I would certainly go. Because of irresponsible fiscal policies, the federal government doesn't have enough money and they now have to make up that difference through taxation..like was the 250$ cheque really necessary? Canada should take a page from Ireland and lower taxes to incentivize companies to establish here and increase productivity.
67% tax on anything is freaking absurd. And you are not done paying. After they take that 67%, you still have to pay gst and PST and beer tax and cigarette tax and gas tax as well as an other zillion taxes. At what point does it become oppressive? At what point do we admit we live in a failed state?
It was introduced in the 2024 federal budget ,but its amendment still needs to be passed into law. It remains in legal limbo and no certainly of a timeline when it will be passed .
FWIW the house that was the primary residence of the deceased in an estate is not subject to capital gains if it is liquidated as part of the estate settlement, and the funds are then passed to the beneficiary tax free.
Yes good video but that's an important missed point. Otherwise all people old/near death in a primary home would make efforts to sell it and capture the tax free gains and establish a higher cost base by buying again or just renting.
I am so glad I have everything in Canada! It has an excellent balance between capitalism, social programs, and consumer/labour protection. I fear that to pander to people like you, we are going to lose those benefits over time.
Max your TFSA with Tesla and Canadian tech (15% crpto exposure) and energy stocks. Max your RSP with US Dollar Stocks. Pray income taxes decrease so when you withdraw from your RSP after retirement you aren't shafted. Profit.
Thunderbay house would have been deemed disposed at fmv upon death, the son will be deemed to aqcuire the house at 400k so it he sells it at 415k, there is 15k taxable gain assuming not primary resident. That said, you can also delcare primary residence but not live there for up to 4 years so even if you rent it out and then sell the gains are still not taxable.
This is going to affect me when my Crypto breaks out from ATH and if I cash out all at once. I'm also a incorporated software developer consultant, so I just see Canada as eating away at my wealth. It seems no matter what smart moves I make I am always behind the curve to afford anything in this Country. I am well compared to most people, but I honestly feel poor, I don't live flashy, I live below my means. I save and watch every penny!
and that's the shitty part. you're obviously smarter than the average person and yet you're struggling. so now imagine the common peasant. they are f****ed. if it's worth it maybe move toa country that won't rob you for making smart investments. some countries have 0% capital gains tax.
hey friend do we just have to suck it up and pay the capital gains on our crypto? Anyone know how we can maybe leverage crypto through a corporation to get real estate and buy pay tax on what you use for the real estate? I’m not a business owner though.
No taxes at all on capital gains would be so powerful for the nation! Imagine all the investments it would attract! Sure hope PP gets in and axes the capital gains taxe
The middle and upper middle class are now paying the price for government policies incentivizing investment to extremes and we were warned about this as early as the early 90s that government creating more favourable tax treatment for capital gains would inevitable increase the wealth gap; and it has. What we are seeing is mostly the result of the polices that stemmed from supply side economics coming to a head due to the likes of Reaganite-like minded folk, neo-liberals, and Mulroney's ilk that supported policies over the decades that made investing in real estate more enticing than that of more important things for the betterment of the nation, its competition, and its economy. They did this with programs and policies that created more favourable tax treatment for capital gains and went to great lengths incentivizing investment more and more over the decades in hundreds of ways to the point of giving those gains a lower rate than personal income. No wonder domestic investors and foreign, plus common folk can’t resist residential real estate as an investment tool hence in part the insane housing crisis. The problem now is there is a growing indifference towards mortgage holders that became holders about 8 years ago, as a large segment of society is getting tired of welfare for mortgagers - homeowners with mortgages have been stealing from renters and savers since 2008 with their low inflation and cheap money/insanely low interest rates. PP is not going to axe the capital gains tax, as he knows it's great for provincial coffers.
@@mydogsbutler Are you kidding us? "Universal healthcare" hahahaha What a joke you are along with your healthcare. It Doesn't Work Anymore. The population has been tripled, the "care" is the same as it was 30 years ago. It's a freakin mess. You're waiting to see a "specialist" MONTHS!!!! Many families don't have even a GP. How old are you? Where are you living? Under a rock most probably, and you keep voting for turdeau. That explains everything. Support private healthcare, along with the public one, as in Quebec. We're dying here.
Also with inflation that 250k will affect more and more people over time. So it encourages the government to create more inflation so that they can tax you more.
@Hyperpandas Government will always have an inflationary policies because the they have huge debts and a spending problem. They are more terrified of deflation then inflation.
@@Oh_Sully It would take me to long to answer it completely. Basically economic stimulus is a fancy word for inflationary policy. The government wants enough inflation to erode their debts and spending but not so much to pass off voters. Was it intentional? Well they intentionally spent 600 billion dollars, then printed 40% of the money supply. You can say they didn't intend for inflation to increase as much, where they are upsetting the voter base. But there are articles that say the inflation was okay since the past decade has been low on inflation prior to the giant increase. Even talks about going forward of a 3.5 percent target instead a 2 percent target. However, if they did that before returning to a 2 percent target it would look bad, do they try to roll it back as low as they can without going negative. It's a very long topic
@@kevinmac6508 My question was in response to your claim that the 250k threshold on a higher capital gains inclusion rate encourages governments to "create more inflation so they can tax [us] more", and I added the recent bout of high inflation. The correct answer is, "no, that's ridiculous". High inflation generally leads to governments not getting reelected, even though governments dont have that much control over it. As to your later comments, you're conflating fiscal policies (taxing and spending) with monetary policy (what you're calling "money printing", but there's more to it). The former is controlled by governments, the latter by central banks. The two aren't coordinated and often work at cross purposes. Finally, everyone with any sense wants to avoid deflation because it's an economy killer. That's why central banks (not governments) generally try to keep inflation around 2%... not because they want inflation (indeed, keeping it low is one of the primary purposes of monetary policy) but because they need a little bit of cushion to avoid deflation (there's a lag between interventions and indicators).
Clickbait. Canada only levies income tax on HALF your capital gains, a huge advantage over the US, where 100% of your gains are taxed as ordinary income. In June that rate changed to taxing 2/3 of your capital gains, but ONLY for those capital gains over 250k. Still a good deal. And if you're making capital gains of over 250k, I'd say you're sitting pretty.
@@Krohmel Relatively is a good deal compared to what it was in the late 80s to the year 2000. Don't believe me, go punch in the numbers on a capital gains calculator and put in your annual income at 500K compared to 100K then 50K.
I wouldn't use the word slightly when describing a hike from one half to two thirds, even if it's after 250,000. It will hurt investment, and is not a good solution for our current deficit. We need to be encouraging any investment into industries and technologies that will enhance our productivity, that really should be our main priority. In 2023 we spent 80 billion on OAS, along with 25 billion on senior medicare, both of which don't operate like CPP where it's prepaid. This behemoth expenditure, which easily dwarfs all other government spending, is only going to get worse. For that reason, an inheritance tax is almost certainly necessary to reclaim some of these losses from our aging population. I would even go as far as to increase eligibility for full CPP payments from 65 to 67 too see a bit more an offset for OAS.
Under Mulroney, did the inclusion rate that was increased to 66.67% in 1988 and to 75% in 1990 hurt investment or detered investment? Did it get better after that when it dropped back to 50 percent in late 2000? Brings to mind the only balanced budgets in my lifetime were in 1969-70 and 1997-98. Both times under liberal governments. The largest deficits in history are now and back in the early 80s both under Liberal governments. And the longest consecutive deficits were under a conservative government. The Conservatives’ final budget in 1993 produced a deficit of about the same level that it was when Pierre Trudeau left office. That being said, balanced budgets are not necessary as history shows, but politicians love to say we need to seek a balanced budget knowing they have more of a symbolic value than that of necessity. One only has to look at a history of acts aimed at forcing balanced budgets make recessions longer and deeper by requiring tax increases or spending cuts during hard times, plus they can be manipulated through accounting gimmicks. Two tier OAS should not exist; dumb move by Trudeau.
@@rps1689 I was born during Chretien and only started learning about politics when Harper was in power. I was only aware that capital gains was introduced in the 70s, and I have not looked at the play by play of capital gains taxation in Canada. I would also say policy is never isolated and there was other reasons that made Canada attractive to investors in spite of those numbers, but it's something I'll certainly look into, thanks. If you look at what I was saying, I never proposed a complete balance of the budget. Maybe you thought that because of the current rhetoric happening right now, which is understandable. To be clear, the world runs on debt. There is such a thing as too large of a deficit, though. Since 2008, when adjusted for inflation, national debt has doubled. After pensions, the largest payment is debt interest at over 60 billion. I was really highlighting that the current pattern of the budget given the cost of pensions is only going to increase, so some sort of action is needed to rectify that. Having more space in the budget can only be a good because 'gimmicks' such as quantitative tightening and easing should not be relied on too heavily so we don't inflate or deflate the economy too much, and there are areas of social spending that need critical attention, too.
@@geronimo4393 I never thought you were proposing a balanced budget; it just came to mind about balanced budgets when I was carrying on. Politicians to a great extent do not want us to focus on how government should be spending on whom and for what; they rather see us fixated on the false premise that our grandchildren will have to pay off some mythical credit card that today's society has overcharged to. That being said, federal debt is more of a form of quasi-money in circulation. Investors do value the securities making up the federal debt in the same fashion that we value money-as a safe store of wealth and a medium of exchange. The notion of having to pay back money already in circulation makes little sense in this context. Of course, not having to worry about "paying back" the federal debt does not mean there is nothing to be concerned about. An ongoing issuance of debt that is not met by a corresponding growth in the demand for debt comes to mind, that manifests itself as a higher rate of inflation. So far the country’s overall economic health is not bad enough to have caused a technical recession… yet.
@@geronimo4393 Harper years are interesting. Harper had it relatively easier. He didn't have to deal with covid, global inflation, the housing crisis, not to mention corrupt corporate price gouging during a national emergency and the naked greed of profiteering in spot markets. Under the Harper years the economy worsened compared to the previous 20 years, but employment growth increased, but mostly non full time and lower paying jobs. But it did fine compared to foreign advanced economies, which at the time were facing broken financial systems and the collapse of their housing markets. Harper could have done a better job at dealing with the weak external demand, but it relatively worked out in the end as the following recession was less severe in Canada, but that is in spite of Harper, as Canada already had for decades the soundest banking system in the world and regulatory bodies in place that other nations didn’t have. Canada’s overall economic performance during the Harper years was largely driven by external forces and even though his government did deliver on its low-tax balanced-budget promise while actually increasing program spending. This accomplishment was facilitated by the greatly reduced public debt charges that arose from previous budget surpluses from a liberal government and a sharp fall in interest rates - neither of which was the result of Harper government actions. Those tax cuts lowered level of public services that could easily have been provided directly or indirectly via transfers to provinces; that being said lower taxes in relation to GDP worked toward supporting long-term growth. Credit where credit is due though; his government delivered better per capita real disposable income growth than its predecessors, but at the cost of worse employment and output growth. The irony is the debt position was already solid, but his government unduly sacrificed growth in order to improve it.
It's predominantly designed to tax the average person who made money on investment properties during the property boom. It's targeting directly those who thought they were smart with their money to save for retirement.
Good video explanation about capital tax. One more thing is that if you are buying a property as investment (flipping, improving) if you sell this home less than 365 days occupancy this doesn't trigger capital tax, it becomes a business income which is taxed at 100% inclusion rate. Additionally, in ottawa, we now have VUT vacan unit tax, so if your property is vacant for more than 152 days (i believe) additional 1% property tax is applied to your property.
This perspective feels a bit tone-deaf given that these policies are designed to discourage house flipping, not promote it. Not all regulations should prioritize maximizing individual profits, especially when it comes to essential assets like housing. When discussing necessities such as food, shelter, and water, it’s crucial to address not only the economic viewpoint but also the social impact. If maximizing profit is the only goal, then perhaps real estate isn’t the ideal investment. It’s particularly surprising that, even amid a housing crisis, profitability and indiscriminate construction often overshadow considerations like the type and affordability of housing being developed.
While the capital gains tax went up for Doctors or corporations, the Corporate tax rate is only 11.5% so they're still WAY ahead versus the average citizen who doesn't have a corporation. And this is only if they have over $500k income, or it's only 3.2% in Ontario.
I don't know where you are getting your information from, but you are wrong. The 11.5% you are talking about is for small business active income under $500K. If you are a doctor or other profession, you don't even qualify for the small business rate. In Ontario, the corporate tax rate is 26.5%. That is what the corporation is taxed at. Then, if you move any funds out of the corporation they are taxed again. Either as wages, dividends, or capital gains at your tax bracket in the year you receive the funds. Therefore, you are taxed twice.
First, the value of an asset gets pumped by inflation. Then, part of it is taken away by capital gains tax (although the real value is unchanged). That is soo wrong!
Thank you for this video. Please do a video or a series of video from tax perspective for ordinary people if they opt for non-residency like non-resident Canadian? and following up which countries are better to take residency and countries that have tax treaty with Canada?
We love our condo but we will be leaving soon. Originally, we want to keep it and make it as our secondary home so that we can come back and forth half the year. Unfortunately, it will be categorized as a secondary home. If the secondary home will sit empty for awhile, we will have to pay for empty home tax of 2% of its assessment value each year. If we sell the condo as a secondary home without renting it out, the capital gains excemption of a primary home will be gone. So for the first 250k of the capital gains, 50% of it will be taxed then the 250k upwards after that will be taxed at 66.7%. All of that will be added to the personal tax. If all is beyond 250k$ then we will be paying 33% & 20% for federal & provincial taxes. The take home would be significantly smaller than just selling it all as a primary home without the capital gains issue... If we just rent out our property, it becomes a business property. We will be taxed monthly for the income. Then if we decide to sell it, we will be taxed 13% of the property value... This is our undersanding of the tax implications for each option we take for the future of our home...
THANK YOU for speaking about this!😊 Sadly, Canada's recent capital gains tax increases have caused a significant loss of highly skilled workers (surgeons, doctors, dentists, etc) to leave Canada for USA Mexico Thailand, etc.
Yeah, it's mind blowing how the government doesn't realize what the macro, long-term impacts are. In the short term, more dollars in, in the long-term-???😂
@@JayB-JayB the real reason why Doctors in Alberta are leaving are because of bad faith negotiating from the UCP combined with terrible working conditions along with uncertainty going forward with regards to healthcare accessibility in the province.
Nice video. In your NVDA example, it is not obvious that FX is included. If the gain is US$500k (at a high level), the tax is much higher than you illustrated. Also, have heard enough of "No sympathy for you if you are part of the 0.13%."... this country will never fulfill its potential.
DOGE, have you looked into BitBuy (under Coinbase) Canadian Crypto broker? Why would you ever want DOGE? It went through its manipulation stages a short couple of years ago. Not hard to find if the "Internet" is used and a search is entered. There are other CDN. crypto brokers who offer DOGE and many others. The U.S.A. is being restricted by the CDN. financial institutions and not allowing CDN.'s to have a U.S. based crypto brokerage unless they have a real office in Canada (liek stock market brokerages). The big CDN. banks are controlling their monopoly in Canada.
Under Trudeau: 300% increase in federal servants, 13% year over year increases in salary, and can't get fired. These are unelected members who do redundant work. Most don't add value to society. All while skilled labour in trades (ie. construction & plumbing) are in constant demand
Great video on capital gains. But I think you got the family home example wrong. The $500K gain in house value is not taxable when the son inherits the house even if he doesn't make it his primary residence. However, the gain above the value at time of death would be taxable later.
It's important to know how to survive and thrive regardless of who your politicians are, but honestly... I really can't wait for our current Federal Liberal/NDP government to be voted out😅 The Liberal/NDP coalition has decimated Canada in 8 short years. I think many others want them gone too😅
who do you propose to replace JT? PP is way worse. no real plans. no real goals. his own party members fear retaliation if they criticize him. he just makes inflammatory rhetorics.
These taxes are not the issue. The issue is the level of corruption that makes improper use of this capital. If we start to see heavy investments in public transit, education, meals for kids in schools, more hospitals, more walkable city infrastructure, housing, etc then people will feel their material lives improve. Right now the issue is that if taxes increase but there's nothing to show for it on the other end, it causes people to be upset and unhappy with their lives continuously getting worse instead of better.
I agree to a point. I feel very demotivated because the more I earn, the less I take in for myself, there's not much point earning more money when up to 50% of it vanishes. The worst part, is as you say, despite paying massive amounts of tax, very little comes back in return due to massive waste and corruption, which makes the thievery even more infuriating.
Where in the hell do you think all your taxes are going! Public sector salaries and benefits!!!! Unions are killing Canadians. You only benefit if you work for the government! Everyone else will just have to keep,paying more in taxes so public sector salaries workers can keep getting increases every year. It’s become ridiculous. And leading government officials will never stand up to public sector unions because they are to strong when it comes time to vote them out!
Im so done with Canada... cost of living is already so high and taxes are just getting higher! It's so important to learn how to pay less taxes especially in Canada
Capital gains is a tax on inflation. It only started in 1972. If you bought an asset for $100 in 1972 and sold it for $700 today you would be assessed a capital gain of $600. Sounds good till you factor in inflation and find out that your gain in constant currency is exactly ZERO. You will be taxed on all of that supposed gain. Gain that is all due to the devaluation of the currency. A tax on inflation.
If you held an asset from 1972, and those are your total returns, I hate to break it to you but you invested in a lemon. In 1980 if you invested 100 dollars here are the returns (reinvested dividends) - Mcdonalds: $1,915,903 - Coca Cola: $33,056 - Walmart: $242,064 - The New York Times: $5,336 - Boeing: $12,450 - Chevron: $8,864 - IBM: $3,969 - Southwest Airlines: $20,209
If you bought a house for 100k and you give it to your son at whats worth 500k you have to pay capital gain on 400k. Which will put your kids into mortgage debt if neither of you have money to pay the capital gain tax. Your hard earned money and canadian dream become the government's asset.
@jasonmacfarlund2703 well if its an estate that is not.. or a small business, commercial property etc it applies. the government has been leeching off the corporate tax, property taxes all these years and still get taxed when you pass down your hard earn to your own family.
The capital gains has changed because it used to be a flat 20%, which benefited the rich. Since now its a PERCENTAGE of your capital gains that is then taxed based on your INCOME, those with HIGHER INCOME pay more tax on their capital gains, those that make less income pay LESS tax on their capital gains. When you do the calculation, its roughly 12.5% for those in a normal income bracket, which is GREAT for lower income people. The 67% applies only to the next $250,000 in capital gains, and even that comes to roughly 25%...still not that bad. So lower income pays less in tax...as it should be.
They announced a 250$ check for next year, almost everyone claps. But they'll lose way more later, but they still clap from hearing of the incoming check...
Seems like most of the people in this comment section have never been outside Canada and don't understand what the rest of the world is going through, thinking Canada is the sole island on fire in the middle of a thriving world. I invite you to travel and see how quickly you will come running back
Exactly! Inflation is in fact a hidden tax onto itself. And they manage to tax your taxes though capital gains taxes. But you are not done paying. Once you got what little is left, you still have to pay more taxes with gst, pst, beer tax, cigarette tax, gas tax, carbon tax, and a zillion other taxes.
The only good thing that came from canada the past 2 years is the FHSA account... Anything you put in and take out is automatically taxed at a lower rate and any capital gains made in it are not subject to the same capital gains tax.
God speed to all of us who choose to remain in Canada. The insane amount of tax we pay here only to have unreliable and unacceptable public institutions like healthcare, roads, safety etc. It's all crumbling away. I am thankful for my TFSA its the one saving grace, selling all my rental portfolio next year going to stomach that capital gains tax and take my investment income and leave the country!
Canadians never back down from a challenge and if you run away your cowardice will show. You don't build a country in day and we always have bumps in the road but to give up when it's hard shows you lost your canadian spirit. If you don't like how the country running fight for change by voting, posting ideas on social, make shorts about issues like this, get involed in local groups and talk to people because your personal bias can be the reason for so much hate towards our country. Never back from a challenge if you don't believe me ask a senior what their biggest regret is in life.
Thank you very much if you can share more similar vids that would be awesome. They tax too much instead of just spending responsibility especially since they are not a reserve currency. Can you please do a video on tax deferrals example i think you can use your gain to buy pension or rrsp to defer taxes or reduce your taxes for the year you have a high capital gain sell of over $250k
If you inherited a $500,000.00 house from your parents and there is no inheritance tax, wouldn't the evaluation for capital gains start when you took possession? After all, it was your parents' principal residence for most of that increase. You could sell it right away or rent it out and pay the increase in value as a capital gain. Am I wrong about this?
There is another nasty side effect. Consider that after you have cashed in your investments, under the new rules (which are yet to be passed into law), you'll have significantly less money left over after the additional taxes are included, this means you will have less money to re-invest back into the Canadian economy. They should, at the very least, allow for a tax-free re-investment, provided it is done within a certain time frame, and they could even stipulate that it must be a majority owned Canadian investment to qualify. The so-called tax breaks, such as a TFSA are too puny to matter. For corporations, the situation is much worse, there are no breaks what-so-ever. The only benefit a corporation has, is that their income is taxed at a slightly lower rate than for individuals, and corporations are allowed a much wider range of expensive deductions (personal expenses have no meaningful deductions). What it means for a corporation, is at least more money can be re-invested back into the economy, that despite the gains being 100% taxable as income when cashed out. The bottom line is, the government is taxing mostly all the wrong things, and are doing it in highly damaging ways, such as the "retroactive tax" that we're discussing.
I know a few doctors in Canada and they hate being taxed. Most doctors prefer the US, the main issue is that US are more 'racist' than Canada. Actually the brain drain is primarily to the US, Canadian doctors are not rushing to India or Belgium or England.
Great presentation. Canada is a great country to exploit, welfare, healthcare, social services. I would never start business in Canada again. If you are young just do whatever it takes to move to USA do not waste your time here. Also, keep in mind the exit tax...
From someone who started a business many years ago, I agree, don't waste your time in Canada, get things working in the USA asap. Canada is a laggard, and also has a tiny market compared to the USA. Taxes in USA also suck, it's not much better, but the amount of money you can earn makes up for it.
The US is a great place to live if you are in top twenty percent of income earners who earn more and pay less in taxes than Canadian counterparts... If not, Canada is better. If living in a major city average rents are higher in the US. You can also enjoy paying more than double for the healthcare despite the US does not have universal healthcare and less services in general so rich people can pay less taxes. Despite paying far more for health care, America has had a lower life expectancy than Canada for decades. America also has substially more crime. For instance the US has a 300 percent higher homocide rate than Canada while the alleged land of the free incarcerates at 5 times the rate of Canada. Most international rankings put average Canadians as having a higher standard of living than average Americans.
Starting a business is one of the few ways you can still find ways to reduce your taxes in Canada... But yes leaving Canada can be a good option to build more wealth someone else if you are able to.
@@mydogsbutler I agree, these are good points. However, if you are top 20% earner you can live wherever you want. I don’t mind paying high taxes. Providing that this money goes back to me as quality services and infrastructure and is not used to feed the freeloaders. Which the last seems to be the case in Canada. The healthcare system in Canada is not designed for working people. The wait times are insane and if you are sick you must travel to USA to see a real doctor. Essentially, healthcare works great for those who are young and healthy. In US you can easily find a less diverse neighborhood where the crime rate is much lower. More like 1 homicide per 100 years. Versus in Canada in any larger or smaller city you can be stubbed, shot or set on fire. Unless you are willing to travel very far. I watch the morning news, and Kiev seems to be a safer place to live than the Toronto area. The ranking of the cities really has nothing to do with reality. I saw the lists including Abu Dhabi, UAE or Nairobi as the best cites to live in.
I wouldn't talk about politics, except you said “a new government that softens that rule”. It's important to note that 1. the other party has been spreading a lot of the misinformation about this tax change, and 2. that same party previously had changed the inclusion rate to 67% for all capital gains. They are pretending to be for the people, but are only using this situation to get votes, nothing more. As for the rest of the discussion, you failed to give the full picture. Inheriting a house: Unless someone dies unexpectedly, willing your house to someone is, to be frank, poor tax planning. Neither cash gifts nor cash inheritances are taxable so there are ways to avoid the increase in capital gains tax. Also, since your principal residence is not subject to capital gains tax, selling your property before dying would save both yourself and the inheritor taxes. Multiple properties: Nobody buys a property just for the rental income, they are hoping for capital gains, which typically exceed inflation. It is intended to be income so why not treat it as such. Doctors and lawyers: They were not previously allowed to incorporate, but when that changed, they hid their income in the corporations. They reported salaries that were far below what they would accept if they were working in a hospital. If they had actually reported proper salaries, while charging a reasonable amount from the corporation for overhead and profit, they probably wouldn't see a change like this. Note that corporate tax rates are also lower than personal tax rates so they save a lot of tax money either way. As for the brain drain, we should be looking at those who return to Canada after they discover the costs of running a practice in the US. With a few exceptions, notably plastic surgery, US doctors make similar incomes to Canadian doctors primarily due to the cost of managing insurance. It baffles me why there is an inclusion rate at all. All income should be taxed at the appropriate income tax rates. Historically this whole arrangement was to benefit the wealthy because common folk had no capital gains. What we should be doing is taxing all income the same; whether it's a business or individual; whether it's a salary, dividends, or capital gains, then reducing the tax rates for the bottom two brackets (below $110k income). This would give a much greater benefit where it's needed most. Nobody likes taxes, but we all like having roads to drive on, sewers to take our waste, and police to provide protection and enforce the law. Corporations will come if there is profit to be made so we need to stop pandering. If they don't, it leaves space for small Canadian businesses to thrive, which keeps money in Canada. Europe has shown us that you can be profitable while paying reasonable taxes, having high labour standards, and protecting the environment. One last point, we can't talk about the reduction of productivity in Canada without mentioning how the reduction of publicly funded research directly affected Canada's position as a leader in high tech and other industries. “They” said private industry will fund innovation, but that only happens if the corporations see high profit opportunities. Canada's R&D laid the groundwork for many ideas to become profitable and companies took it from there.
@@CRuM770 well said. This change would hardly factor into a prospective professionals consideration to immigrate to Canada. This is fear mongering at its best.
Brings to mind south of the border; where touch screen displays, the internet and Siri are the products of public research funding hence Steve Jobs most successful product would not exist if it weren’t for the billions of dollars that the US government spent on research and development. Apple in its early stages received federal funding. Ironically venture capitalists were only interested in Apple after they got the funding secured.
My understanding is that the capital gains tax hike is still not in effect. It was in the budget, but got taken out of the budget and made its own bill because Trudeau kept trying to draw Poilievre into talking about the capital gains tax in the house of commons but Poilievre kept on ignoring talking about until after it became its own bill, and a vote taken on it. Then when the STDC scandal broke out, the conservatives tried to get the government to release these documents to the RCMP, I'm not exactly sure on the exact process in Parliament, but the Speaker of the house was forced to stop all government business until they release the documents unredacted to the RCMP and the capital gains tax hike bill was still in the senate when it got stuck there since all government bills get paused until the documents get released, so the tax hike is still not in effect, and if we get an election before it gets passed, there is no tax hike.
That's true. Anybody has any reference to when that got approved separately? officially it sounds like its in effect. But @Martmi29 has a great point. I also remember it was taken out in the budget.
You are correct, the cap gains tax is still not in effect. What may happen, is it never gets passed into law, and as soon as a new election is called, yhe bill dies. When PP takes over, the unpassed bill can be simply be ignored, and left to remain dead. The uncertainty, and the criminal retroactive nature of this insidious tax increase, is part of what makes it such a horrible policy. It's as if Trudeau is intentionally ruining Canada's economy, almost nothing he has fone benifits Canada. We have a PM, who never had to manage his own financial affairs, he receives "free money" from his trust fund, and someone else manages it, snd everything else in his pathetic life. Canada is just a play thing to Trudeau, he's using it to stroke his ego, get tickets to Taylor Swift concerts, and play dress up when traveling to other countries. Trudeau is a really sick man.
I think that the tax should be much higher - for wealthy elites who are moving their money over here and using our communities as a safety deposit box.
I don't understand blanket changes like this. If anything the capital gains tax should only effect the real estate market and money raised should go directly into R&D spending to get us back on our feet. How are we supposed to develop our economy in these conditions? Just another reason my partner and I are trying to take our graduate degrees elsewhere.
THE LAW IS NOT YET IN EFFECT. There is a step in the process of a law becoming fully active. It is called “Royal Assent”. I spoke with 5 different CRA agents on the same day (last week) about capital gains for an investment. One agent admitted that the Royal Assent was not yet received, hence currently the inclusion rate is not yet 66%. When I asked how long it would take for Royal Assent to be received, they said probably next year. Given the Trump presidency with potentially damaging benefits of 25% trade tariffs, it’s hard to say if this law will ever be enacted due to its detrimental effects on businesses.
No you are wrong. The law is not yet active. There is a final stage in the passing of this law that requires “Royal Assent”. This has not yet been achieved. This means that the window is not actually closed. Nobody knows when the law will actually come into affect. It’s very important that people do their homework and research. I’m personally disappointed in our leadership because of the mass scare this caused for many investors when in fact these rules didn’t affect their investment decisions. You can still safely sell your property at the current time without the increased inclusion rate. When will it truly change? The CRA agents couldn’t say when it would happen “Next Year”.
If this tax sticks then in a generation most capital gains will be over 250,000. My town still has a luxury tax on house purchases over 200,000 but now they call it by another name.
Inclusion rates have bounced around throughout recent Canadian history. In the 90s under the Liberals, it was 2/3 on all gains. I believe it was also 75% before that. The conservatives dropped it to 50% across the board in the 2000s. It will probably change again, depending on who's in power.
They should Drop the capital gains tax on all investments for people investing with after tax dollars! Canada just keeps taxing everything, over and over! This takes away incentive from most Canadians. Tax the Ultra rich , top 5% richest. Let’s see if Pierre will bring they’d capital gains taxes down! Trudeau is Destroying Canada! No wonder professionals are leaving!
tax is not the problem, the problem is they are just gobbling it up and we see nothing from that. our healthcare is in dire straits, education is worse and worse every year, our infrastructure is on hiatus, so where do all these taxes go?
The capital gains tax change is literally what you're asking for with "Tax the Ultra rich , top 5% richest". Or are you under the impression that people making over 250k in capital gains/year represent the struggling? The "ultra rich" get there with their capital gains.
If someone is fortunate enough to collect a capital gain over $250,000 they should feel gratitude. Canadian Patriots will feel gratitude and would happily pay this tax.
@@Krueger444it sounds like you skipped the video and also consider anyone who makes gains on investments over 250k as ultra rich.. wouldn't it make sense to then also have 75% over x amount 80% over y amount and 90% over z amount? Thus ensuring people try to evade taxes and make thir money illegally or outside of Canada instead..? Cause that is what would happen if targeting the ultra rich instead of just anyone who isn't struggling too hard to be able to invest... crab bucket mentality sounds like
So you're telling me the money I made from my construction job was taxed once already, then I go to make gains in the crypto market with what little money I had left over gets taxed again. All the while I still live with my parents and I'm trying to find a way to buy my own place but the government is screwing me over with their excessive taxation???
If you put the money into a TFSA, your investment gains are tax-free, forever. If you've never used a TFSA, your unused (available) contribution limit is as much as nearly $100 000 (depending on your age)
@@King_of_Sofa lol you're so poor yet you still think this affects you. If you're making 250k+++ PROFITS per year on crypto (because that's the literal only way it would apply to you) you should quit your construction job and open up an exchange.
There’s a limit to the amount of tax some people are willing to pay. They’ll either work less or leave the country. Canada has many great attributes however its productivity is undermining things. Tall poppy syndrome.
People are leaving Canada in droves because of insane taxes (all sorts) and unemployment or low pay, hardly enough for mere survival - it's survival vs living! It has become impossible to survive in Canada as their economy sinks to rockbottom. It is also dangerous trying to survive in a place with no access to healthcare, in addition to being robbed of insane taxes!
It is FAR WORSE in the UNITED STATES< a failed model. Please don't grouch about Canada until you lived there, and you will see. Those that think Canada tax rate is much higher than the USA failed math class, which is about 85% of all Americans and Canadians
@@peterlohnes1 the tax rates are lower, but it leads to a much higher cost of living. Imagine not giving birth in a hospital because you can't afford it, or working for $7/hr in a "right to work" state.
@@peterlohnes1Wrong. Canadians earn 37% less on average than Americans, can write off any mortgage or loan interest payments and enjoy numerous other tax advantages; for example, they can set up a trust fund or non-profit to hold their investments and pay themselves a salary- TAX FREE. There’s no such thing in Canada. It sucks to be an investor here
tfsas do not save you from capital gains tax, the government at any point can decide that your investment in a tfsa made too much money and they now need to retroactively add it to your taxes for that fiscal year
Your thunderbay example is wrong. When his parents die the assets are deemed to be disposed at fair market value and Joe is deemed to have acquired that asset for a cost basis at today's value.
If you had 100,000 to buy nivida, consider yourself lucky. To have it turn into 500, 000, you got even luckier. Don't worry about paying the extra capital gains taxes. The problem with govt taxes is that the present and, in fact, past govts have not properly used taxes to spur econmic growth or improve healthcare or education. Taxes are used to redistribute wealth rather than to try and grow the economy. Corporate taxes are lower in Canada than the U.S. Indiviuals in Canada are taxed greater than the U.S. Draw your own conclusions.
i dont see a capital gains tax of over 250k as a problem this would combat those who buy and flip houses as many do and they do it cheaply to make the most profit..
The greatest con that people do to the working class is dangle the low statically possibly of their "imaged future wealth" to get the working class/middle class to rage against policies that would actually cause those with the greatest amount of means RIGHT NOW to pay their fair share. If you are in the minority that will bank over $250,000 in capital gains, you can AFFORD a good tax accountanr to offset your taxes.
High income earners already pay most of the tax. Living and working in Canada is already a bad deal for high income earners due to high taxes. Why should a high income earner stay in Canada if they can make $100k more after tax by moving to the United States? How can a country thrive if it depends on highly skilled professionals sticking around despite it not being in their best interest?
@@MrAnimus Then Move to the states. The things you save in taxes, you end up buying 10x that in out of pocket expenses in the US... Healthcare, education etc can literally bankrupt you in the US.
@@Queenb2001 Telling high income earners like doctors and engineers to move the states is not a winning strategy for a country. They pay most of the taxes and provide a lot of economic value.
Subscribed. YOU for PM. Hopefully we get a new government that revises this....doubtful I know. Paying such high rates of tax on already taxed capital that has been placed at risk is counter intuitive at best. To raise it from its already previous high amount is greed at its finest. Thank you Liberals......that was sarcasm
As taxes rise, those affected start leaving for more tax friendly countries because they can. Instead of more taxes being collected there now becomes a short fall and the middle class foots the bill ..
So i was someone who didn't care about paying taxes and was proud to pay taxes...but recently i started to think about making a business and i soon realized that Canadian tax is kinda aggressive....i understand we are kinda in the middle of the spectrum b/n social and capital but its not a good start for a small business like mine...and also i invested on some stocks and my money kinda grew quite a bit and now im worried about the amount of taxes that i have to pay......it feels like im being ripped of and im scared to liquidate my money in fears that it will trigger a tax alert...God help me...
Lol. In germany we have a 1000€ tax free socket every year (not cumuitive over lifetime) and then pay 26.5% on it. In addition we have like 60% in taxes and social security once you hit 20k yearly employment income. If you life soley of from your capital gains depending on how much you make every year you have to oay up to 1600€ per month for social security shenanigance. Canada seems to be antax heaven.
Beats 100% like in the US. It has also been as high as 75% in Canada not that long ago, raised from 50% by Conservatives. "From 1972 to 1987, the capital gains inclusion rate was one-half (50 per cent). In 1988, the inclusion rate was raised to two-thirds (66.67 per cent). In 1990, the inclusion rate was further raised to three-quarters (75 per cent). From February 28, 2000, to October 17, 2000, the inclusion rate was two-thirds. Since October 18, 2000, the inclusion rate has been one-half." Who was the PM in 1988 when the rate was increased from 50 to 66.67%, just like Trudeau did in June, 2024? Brian Mulroney, Conservative. He then raised it even farther to 75%, in 1990. Who was PM in 2000 when it was lowered back to 50%? Jean Chretien, Liberal.
I hope the idea that people will go where they are treated best gets into Canadians heads. I’m tired of hearing how certain people need to “pay their fair share” or that “they make enough”. Canada is not the only country in the world. Why should a world class professional stay in Canada when they could move to the United States and make 100s of thousands of dollars more after tax?
How does this affect someone who has rented out his own property and then living in a rental apartment? My condo one and only property in Toronto is rented while I am currently living in Montreal in an apartment due to family situation. Will the capital gain tax affect me because my condo was a primary residence but now rented and I am also renting
hmmm....your Thunder Bay example maybe incorrect. The parent's house is deemed to be disposed at the time of their passing and I would agree is not subject to any capital gains as it is their principle residence. As it has been deemed to be disposed, it is however subject to probate and at the transfer of the inheritance, the value of the home at the time of the deemed disposition is the value that is carried forward as the inheritance value. Should the child decide to that home in Thunder Bay any capital gains will be calculated from the valuation at transfer date or the date of passing. So, in your example if the home is valued at $500k at the time of passing and the child sells the house later say $600k the capital gains is only $100k not from the parent's original purchase price. That is my understanding from an estate point of view. This is similar if the house was passed onto the child it has to be done in an "arms length" transaction or market value and any increase thereafter is subject to the capital gains.
100% of capital gains should be taxed, for everyone. There is a class of people who provide no value and hoard money who made the rule that only 50% of their profits should be taxed… the tax rate should be higher too
Let me summarize who this will affect: 1. You own 2 houses and planning to sell one. 2. You have more than 250k annual investment capital gain (say 10% return then you need $2.5 million invested). Does this affect you?
It also affects employees of tech start-ups (the demographic politicians all over the world claim to be begging for more of). Many such employees receive below-standard pay (compared to their qualifications and abilities) in return for receiving stock options in their start-ups which will pay off big if the company succeeds (and be worthless if it doesn't). When they actually cash in those options (triggering capital gains taxes), they now take a much bigger tax hit, so they are looking elsewhere even more than previously.
Gains made in your TFSA are always untaxed. Outside of the TFSA, this change would not impact your 40k of capital gains - you'd be taxed on 20k. What this change does is for someone making, say, 300k in capital gains. Previously, you'd pay tax on 150k of that, but under the new changes, you'd be paying on 125 (50% of 250) + 33.5 (67% of 300-250) = 158.5k. Assuming a roughly 50% tax bracket at that income level, you're looking at a roughly $4k increase in your tax bill (again, on a 300k capital gain).
40k cap gain would be around 8k with a 40% marginal rate. TFSA limit is about 93k if you're maxed out. Also making 40k of capital gain means you made 10% off a 400 000k investment in a non-registered account.
Pollievre is a Randroid whose policies amount to trolling Trudeau rather than explaining what he would do to solve actual problems. For instance, cutting carbon tax will only take money out of government coffers and reward ICE use. It wouldn't address co2. He has no policy for dealing with co2. Physics isn't going to change because conservatives evade this issue.
@@robertomartinez8966 You are right, it's good cop, bad cop.....two sides of the same coin.... Morons following the spawn of satan... then they divide us.... gays vs straight, whites vs blacks, now us vs the indians and the latest. World us Palestine. I refuse to list to their total bull shit. Right is right, wrong is wrong.. The children of satan has control of the media, banks and our government. these politicians are deluded.
Right on with your analysis. This is one of the dumbest, short-sighted moves by the liberal/NDP government in my 44 years of business spanning institutional venture capital, investment banking and co-founder of six companies. The liberal/NDP government has never seen a tax it doesn’t like. Unfortunately, it would appear that they do not possess the requisite education and experience, collectively, to understand the longer term consequences of their policies. Then again, politics is a short-term game - particularly for those that are incompetent.
Our government is out of control. I'm happy to not take any capital gain until this policy is more friend to taxpayers. If the next electoral does not change it will move on.
Inheritance related taxes... Ensuring the poor can't afford what was inherited to them so they are forced to sell it to pay the government based on a wild Fair Market Value preventing them from owning what they were given.
Absolute robbery 67 percent is pathetic. First time someone has to pay that they will leave and never pay a single dollar of tax again here. I’m leaving by 2029
Hey guys, how about a free Mac or IPhone at the end of this year? Wealthsimple will give you a free Mac or IPhone 16 💻📱when you transfer $100,000 or more to Wealthsimple, promo ends December 13, 2024. Why not, if you were planning to invest anyway! Simply use my referral code: ZCZSZQ here: www.wealthsimple.com/invite, and make sure you register for the Mac/IPhone promo! *Note: You'll need to maintain your funds for 365 days after the funding period ends.
i love paying insane amount of taxes and not have access to good public transportation or healthcare. truly the Canadian dream
Haha, good one.
😂👍
Everyone is a sucker here.
The internet has all the answers and also with so many RUclips sites now from legit people. If you are paying too much tax which is all subjective then you likely have done next to nothing to learn what to do! Every speak to a lawyer, a real accountant or speak with or ask for guidance from someone who has lots of $$$ (like +$5 million)?
You can always move to Russia where their interest rate is at (minimum) 21%. I heard they welcome immigrants there right now as their population is rapidly decreasing...
I'm so grateful that our taxes are increasing, those of us who have worked our asses off and managed to invest are now being penalized even more. Thank you trudeau.
I'm so happy to see my hard earned tax money flow freely to ukraine and many other countries. Makes me so happy when I have to work weekends and nights too.
100% accurate
Hey, someone has to care and pay for all the useless migrants right?
Really? You made over 250k in capital gains this year? Congrats!
something really needs to improve with the management of our taxes...
@@NVanHiker Not hard to do in crypto these days
It is a lot of capital gains tax because
-It doesn't count toward any CPP or benefits.
-It doesn't account for lifetime or previous years losses (we aren't given a credit when losing money unless within 3 years)
-It doesn't account for land taxes and renovation losses (10 year land tax could run you $120k itself)
So realistically, you've been paying land tax, land transfer tax, renovation and previous losses costs without any tax credit but you're expected anytime you come out on top, to pay a capital gains tax on gains from an initial investment that was taxed already.
Capital Losses can be carried forward for the rest of your life and applied to protect future gains, indefinitely (not 3 years)
They can also be carried backward, to claim back taxes you already paid on capital gains in the past, but only the past three years.
They make casinos look like a winning proposition
@@GK-yi4xv do they cut the capital loss in half instead of pay back the full taxes paid on the loss amount?
@@BCSimonYT If you had $50 000 in gains two years ago, $25 000 went on your tax return, and you paid whatever your marginal tax rate was. Say 30% or $7500.
If you have $50 000 in losses this year, half can be applied against any gains from the previous three years, so $25 000 can be used to reduce your taxable income from 2 years ago (when you had $25 000 in taxable capital gains), so you get back the $7500 you paid.
The math is symmetrical. Only 3 years backward, or indefinitely forward.
@@GK-yi4xv ah okay, thanks. I'm actually in the process of filing that myself. It still doesn't recoup my 10c lost on the dollar though, but that would be asking too much :D
Good explanation.
One thing you didn't mention is that raising any taxes also raises inflation.
As businesses have to pay more taxes, they raise prices to compensate, and that's regardless if it's a plumber, carpenter or grocery store.
Good point. Most extra costs businesses have to pay are rolled over to the end customer, the effect is just lagging.
That's not exactly true, although it can feel that way to the end consumer. Raising taxes does *not* raise inflation. Increasing the price of goods and services raises inflation. This is actually quite a big difference.
However, because of the system that we live in, it might not feel any different to the average person. This is because businesses can just freely pass all their additional expenses, such as taxes, on to the consumer.
This is why price ceilings, if coordinated properly with taxation (or a myriad of other mass wealth accumulation limiting policies), are not necessarily the boogeyman the political right make them out to be. They can actually be a way to raise taxes, which can be put back in to benefitting society in the form of transportation, healthcare, infrastructure, etc, while preventing corporations from using the guise of inflation to bump prices up a little extra and price gouge the consumer. There's a reason why our government and majority of people in western Capitalist Social Democracies are in debt and the 1% have gained more wealth than at any point in history.
Well, most services costs here in Kelowna went through the roof! And I’m talking AC maintenance and stuff like that, nothing crazy.
If the government interfered with pricing imposing price caps, I'd run away in a hurry. They can't get government waste under control, and would bloat the alreasy massive buerocracy 100x larger to administrator and enforce the mess. The insane GST rebate of a measly $250.00 will cost us over $1B to process, imagine what $1B could do when put to good use, instead of used to spin wheels. The government is a massive waste machine, that mostly harms businesses rather than helps them.
@@KickaHippyPK"Increasing the price of goods and services raises inflation." Yes, to cover the increases a various costs such as... corporate taxes.
I don't get why capital gains tax is so high? We work our whole lives for our property and then when we want to sell it, a 1/4 of the earnings are GONE. Not cool. Eliminate all taxes. Simplify shit!!!!!!!!!!!!!!!!!
It's great for the province's coffers ; )
It was higher in the late 80s to 2000.
Here is an example on how one can be ahead:
If you have a total income of 90K a year in BC. And you have an asset now worth 960K and originally the cost of the asset was 500K. Your capital gain is 460K. So your taxable gain is 265,007 with the inclusion rate. Tax on that gain would be 122,538 instead of 103,809, which is what is would have been before the introduction of the inclusive rate. Your net proceeds after tax would be 337,462 (460K minus 122,538 equals 337,462). So you would be paying 18,729 in more taxes than you would have before the inclusive rate came into affect. So in summary, you started out with an asset that cost you 500K and after selling your asset and paying the capital gains tax, you make net proceed of 337,262, which is about a 67 percent. Before the inclusion rate was introduced, you would have made 71 percent. Of course this is based on taking all federal and provincial taxes and surtaxes into account and the basic personal tax credit.
I love Canada but if offered a better paying job and less taxes in the US, I would certainly go. Because of irresponsible fiscal policies, the federal government doesn't have enough money and they now have to make up that difference through taxation..like was the 250$ cheque really necessary? Canada should take a page from Ireland and lower taxes to incentivize companies to establish here and increase productivity.
The cheque was necessary to buy votes.
@@funkspinna ....and it's a bandaid to a mortally wounded.
The fact that we, as Canadians, allow this insane amount of taxes for basically 0 return is crazy. It is chasing away investment and innovation.
If you think that's bad, a lot of countries tax inheritance at 50% like Japan - so if you inherit a house, the tax is 50%. So we are way better off.
Better off than a more tax oppressive government is not better.
67% tax on anything is freaking absurd. And you are not done paying. After they take that 67%, you still have to pay gst and PST and beer tax and cigarette tax and gas tax as well as an other zillion taxes. At what point does it become oppressive? At what point do we admit we live in a failed state?
Wow, such a well thought out comment. Clearly you are a rational and well-educated person hahaha.
You aren't paying 67% tax. 67% of your capital gains above 250k is counted towards taxable income.
It was introduced in the 2024 federal budget ,but its amendment still needs to be passed into law. It remains in legal limbo and no certainly of a timeline when it will be passed .
FWIW the house that was the primary residence of the deceased in an estate is not subject to capital gains if it is liquidated as part of the estate settlement, and the funds are then passed to the beneficiary tax free.
Yes good video but that's an important missed point. Otherwise all people old/near death in a primary home would make efforts to sell it and capture the tax free gains and establish a higher cost base by buying again or just renting.
I am so glad I have nothing in Canada! Leaving Canada was one of the very best decisions of my life!
and where did you go?
I am so glad I have everything in Canada! It has an excellent balance between capitalism, social programs, and consumer/labour protection. I fear that to pander to people like you, we are going to lose those benefits over time.
@@CRuM770canada is full of sheep and pavement poopers, why are you bragging
@@CRuM770lol OK 😂
Out of curiousity what country did you move to?
Max your TFSA with Tesla and Canadian tech (15% crpto exposure) and energy stocks.
Max your RSP with US Dollar Stocks.
Pray income taxes decrease so when you withdraw from your RSP after retirement you aren't shafted.
Profit.
yea im also 100% in TESLA lets go
All these tax without services are a good way to make you sad to be Canadian. I have seen doctors trained here move to buffalo New York. So sad
Thunderbay house would have been deemed disposed at fmv upon death, the son will be deemed to aqcuire the house at 400k so it he sells it at 415k, there is 15k taxable gain assuming not primary resident. That said, you can also delcare primary residence but not live there for up to 4 years so even if you rent it out and then sell the gains are still not taxable.
Great info and very well presented - thanks for this!
This is going to affect me when my Crypto breaks out from ATH and if I cash out all at once.
I'm also a incorporated software developer consultant, so I just see Canada as eating away at my wealth.
It seems no matter what smart moves I make I am always behind the curve to afford anything in this Country.
I am well compared to most people, but I honestly feel poor, I don't live flashy, I live below my means. I save and watch every penny!
Thanks Trudeau for this
Depends. Do you hold the crypto in your corp?
The whole point of crypto is to be outside the system
and that's the shitty part. you're obviously smarter than the average person and yet you're struggling. so now imagine the common peasant. they are f****ed. if it's worth it maybe move toa country that won't rob you for making smart investments. some countries have 0% capital gains tax.
hey friend do we just have to suck it up and pay the capital gains on our crypto? Anyone know how we can maybe leverage crypto through a corporation to get real estate and buy pay tax on what you use for the real estate? I’m not a business owner though.
No taxes at all on capital gains would be so powerful for the nation! Imagine all the investments it would attract! Sure hope PP gets in and axes the capital gains taxe
The middle and upper middle class are now paying the price for government policies incentivizing investment to extremes and we were warned about this as early as the early 90s that government creating more favourable tax treatment for capital gains would inevitable increase the wealth gap; and it has.
What we are seeing is mostly the result of the polices that stemmed from supply side economics coming to a head due to the likes of Reaganite-like minded folk, neo-liberals, and Mulroney's ilk that supported policies over the decades that made investing in real estate more enticing than that of more important things for the betterment of the nation, its competition, and its economy. They did this with programs and policies that created more favourable tax treatment for capital gains and went to great lengths incentivizing investment more and more over the decades in hundreds of ways to the point of giving those gains a lower rate than personal income. No wonder domestic investors and foreign, plus common folk can’t resist residential real estate as an investment tool hence in part the insane housing crisis.
The problem now is there is a growing indifference towards mortgage holders that became holders about 8 years ago, as a large segment of society is getting tired of welfare for mortgagers - homeowners with mortgages have been stealing from renters and savers since 2008 with their low inflation and cheap money/insanely low interest rates.
PP is not going to axe the capital gains tax, as he knows it's great for provincial coffers.
Buy a primary residence and live there
One can only hope, till then turdeau is getting worse by the day. If not for this turban guy....
No taxes on capital gain would mean cutting services. Which services to propose cutting? Univeral healthcare?
@@mydogsbutler Are you kidding us? "Universal healthcare" hahahaha
What a joke you are along with your healthcare. It Doesn't Work Anymore. The population has been tripled, the "care" is the same as it was 30 years ago. It's a freakin mess. You're waiting to see a "specialist" MONTHS!!!! Many families don't have even a GP. How old are you? Where are you living? Under a rock most probably, and you keep voting for turdeau. That explains everything. Support private healthcare, along with the public one, as in Quebec. We're dying here.
Also with inflation that 250k will affect more and more people over time. So it encourages the government to create more inflation so that they can tax you more.
You figure the government chose to create the recent boutique of inflation, do you? That inflation was the goal?
@Hyperpandas Government will always have an inflationary policies because the they have huge debts and a spending problem. They are more terrified of deflation then inflation.
@@kevinmac6508 You should be a politician. You're great at not really answering the question 😂
@@Oh_Sully It would take me to long to answer it completely. Basically economic stimulus is a fancy word for inflationary policy. The government wants enough inflation to erode their debts and spending but not so much to pass off voters. Was it intentional? Well they intentionally spent 600 billion dollars, then printed 40% of the money supply. You can say they didn't intend for inflation to increase as much, where they are upsetting the voter base. But there are articles that say the inflation was okay since the past decade has been low on inflation prior to the giant increase. Even talks about going forward of a 3.5 percent target instead a 2 percent target. However, if they did that before returning to a 2 percent target it would look bad, do they try to roll it back as low as they can without going negative.
It's a very long topic
@@kevinmac6508 My question was in response to your claim that the 250k threshold on a higher capital gains inclusion rate encourages governments to "create more inflation so they can tax [us] more", and I added the recent bout of high inflation. The correct answer is, "no, that's ridiculous". High inflation generally leads to governments not getting reelected, even though governments dont have that much control over it.
As to your later comments, you're conflating fiscal policies (taxing and spending) with monetary policy (what you're calling "money printing", but there's more to it). The former is controlled by governments, the latter by central banks. The two aren't coordinated and often work at cross purposes.
Finally, everyone with any sense wants to avoid deflation because it's an economy killer. That's why central banks (not governments) generally try to keep inflation around 2%... not because they want inflation (indeed, keeping it low is one of the primary purposes of monetary policy) but because they need a little bit of cushion to avoid deflation (there's a lag between interventions and indicators).
Clickbait. Canada only levies income tax on HALF your capital gains, a huge advantage over the US, where 100% of your gains are taxed as ordinary income. In June that rate changed to taxing 2/3 of your capital gains, but ONLY for those capital gains over 250k. Still a good deal. And if you're making capital gains of over 250k, I'd say you're sitting pretty.
Thanks for the clarity!
Still a good deal? You're defending increased taxation. What's it like being a certified retard?
@@Krohmel Relatively is a good deal compared to what it was in the late 80s to the year 2000.
Don't believe me, go punch in the numbers on a capital gains calculator and put in your annual income at 500K compared to 100K then 50K.
wtf do you think the inclusion rate means...Maybe watch the video
WHOOSH
I wouldn't use the word slightly when describing a hike from one half to two thirds, even if it's after 250,000. It will hurt investment, and is not a good solution for our current deficit. We need to be encouraging any investment into industries and technologies that will enhance our productivity, that really should be our main priority.
In 2023 we spent 80 billion on OAS, along with 25 billion on senior medicare, both of which don't operate like CPP where it's prepaid. This behemoth expenditure, which easily dwarfs all other government spending, is only going to get worse. For that reason, an inheritance tax is almost certainly necessary to reclaim some of these losses from our aging population. I would even go as far as to increase eligibility for full CPP payments from 65 to 67 too see a bit more an offset for OAS.
Under Mulroney, did the inclusion rate that was increased to 66.67% in 1988 and to 75% in 1990 hurt investment or detered investment? Did it get better after that when it dropped back to 50 percent in late 2000?
Brings to mind the only balanced budgets in my lifetime were in 1969-70 and 1997-98. Both times under liberal governments. The largest deficits in history are now and back in the early 80s both under Liberal governments. And the longest consecutive deficits were under a conservative government. The Conservatives’ final budget in 1993 produced a deficit of about the same level that it was when Pierre Trudeau left office. That being said, balanced budgets are not necessary as history shows, but politicians love to say we need to seek a balanced budget knowing they have more of a symbolic value than that of necessity. One only has to look at a history of acts aimed at forcing balanced budgets make recessions longer and deeper by requiring tax increases or spending cuts during hard times, plus they can be manipulated through accounting gimmicks.
Two tier OAS should not exist; dumb move by Trudeau.
@@rps1689 I was born during Chretien and only started learning about politics when Harper was in power. I was only aware that capital gains was introduced in the 70s, and I have not looked at the play by play of capital gains taxation in Canada. I would also say policy is never isolated and there was other reasons that made Canada attractive to investors in spite of those numbers, but it's something I'll certainly look into, thanks.
If you look at what I was saying, I never proposed a complete balance of the budget. Maybe you thought that because of the current rhetoric happening right now, which is understandable. To be clear, the world runs on debt.
There is such a thing as too large of a deficit, though. Since 2008, when adjusted for inflation, national debt has doubled. After pensions, the largest payment is debt interest at over 60 billion. I was really highlighting that the current pattern of the budget given the cost of pensions is only going to increase, so some sort of action is needed to rectify that. Having more space in the budget can only be a good because 'gimmicks' such as quantitative tightening and easing should not be relied on too heavily so we don't inflate or deflate the economy too much, and there are areas of social spending that need critical attention, too.
@@geronimo4393 I never thought you were proposing a balanced budget; it just came to mind about balanced budgets when I was carrying on.
Politicians to a great extent do not want us to focus on how government should be spending on whom and for what; they rather see us fixated on the false premise that our grandchildren will have to pay off some mythical credit card that today's society has overcharged to. That being said, federal debt is more of a form of quasi-money in circulation. Investors do value the securities making up the federal debt in the same fashion that we value money-as a safe store of wealth and a medium of exchange. The notion of having to pay back money already in circulation makes little sense in this context. Of course, not having to worry about "paying back" the federal debt does not mean there is nothing to be concerned about. An ongoing issuance of debt that is not met by a corresponding growth in the demand for debt comes to mind, that manifests itself as a higher rate of inflation.
So far the country’s overall economic health is not bad enough to have caused a technical recession… yet.
@@geronimo4393 Harper years are interesting.
Harper had it relatively easier. He didn't have to deal with covid, global inflation, the housing crisis, not to mention corrupt corporate price gouging during a national emergency and the naked greed of profiteering in spot markets.
Under the Harper years the economy worsened compared to the previous 20 years, but employment growth increased, but mostly non full time and lower paying jobs. But it did fine compared to foreign advanced economies, which at the time were facing broken financial systems and the collapse of their housing markets. Harper could have done a better job at dealing with the weak external demand, but it relatively worked out in the end as the following recession was less severe in Canada, but that is in spite of Harper, as Canada already had for decades the soundest banking system in the world and regulatory bodies in place that other nations didn’t have.
Canada’s overall economic performance during the Harper years was largely driven by external forces and even though his government did deliver on its low-tax balanced-budget promise while actually increasing program spending. This accomplishment was facilitated by the greatly reduced public debt charges that arose from previous budget surpluses from a liberal government and a sharp fall in interest rates - neither of which was the result of Harper government actions.
Those tax cuts lowered level of public services that could easily have been provided directly or indirectly via transfers to provinces; that being said lower taxes in relation to GDP worked toward supporting long-term growth.
Credit where credit is due though; his government delivered better per capita real disposable income growth than its predecessors, but at the cost of worse employment and output growth.
The irony is the debt position was already solid, but his government unduly sacrificed growth in order to improve it.
It's predominantly designed to tax the average person who made money on investment properties during the property boom. It's targeting directly those who thought they were smart with their money to save for retirement.
Good video explanation about capital tax. One more thing is that if you are buying a property as investment (flipping, improving) if you sell this home less than 365 days occupancy this doesn't trigger capital tax, it becomes a business income which is taxed at 100% inclusion rate. Additionally, in ottawa, we now have VUT vacan unit tax, so if your property is vacant for more than 152 days (i believe) additional 1% property tax is applied to your property.
Thanks for adding that! It's really important to be aware to not be surprised by an even higher tax bill!
This perspective feels a bit tone-deaf given that these policies are designed to discourage house flipping, not promote it. Not all regulations should prioritize maximizing individual profits, especially when it comes to essential assets like housing. When discussing necessities such as food, shelter, and water, it’s crucial to address not only the economic viewpoint but also the social impact. If maximizing profit is the only goal, then perhaps real estate isn’t the ideal investment. It’s particularly surprising that, even amid a housing crisis, profitability and indiscriminate construction often overshadow considerations like the type and affordability of housing being developed.
While the capital gains tax went up for Doctors or corporations, the Corporate tax rate is only 11.5% so they're still WAY ahead versus the average citizen who doesn't have a corporation. And this is only if they have over $500k income, or it's only 3.2% in Ontario.
I don't know where you are getting your information from, but you are wrong. The 11.5% you are talking about is for small business active income under $500K. If you are a doctor or other profession, you don't even qualify for the small business rate. In Ontario, the corporate tax rate is 26.5%. That is what the corporation is taxed at. Then, if you move any funds out of the corporation they are taxed again. Either as wages, dividends, or capital gains at your tax bracket in the year you receive the funds. Therefore, you are taxed twice.
First, the value of an asset gets pumped by inflation. Then, part of it is taken away by capital gains tax (although the real value is unchanged). That is soo wrong!
Thank you for this video. Please do a video or a series of video from tax perspective for ordinary people if they opt for non-residency like non-resident Canadian? and following up which countries are better to take residency and countries that have tax treaty with Canada?
We love our condo but we will be leaving soon. Originally, we want to keep it and make it as our secondary home so that we can come back and forth half the year. Unfortunately, it will be categorized as a secondary home. If the secondary home will sit empty for awhile, we will have to pay for empty home tax of 2% of its assessment value each year. If we sell the condo as a secondary home without renting it out, the capital gains excemption of a primary home will be gone. So for the first 250k of the capital gains, 50% of it will be taxed then the 250k upwards after that will be taxed at 66.7%. All of that will be added to the personal tax. If all is beyond 250k$ then we will be paying 33% & 20% for federal & provincial taxes. The take home would be significantly smaller than just selling it all as a primary home without the capital gains issue... If we just rent out our property, it becomes a business property. We will be taxed monthly for the income. Then if we decide to sell it, we will be taxed 13% of the property value... This is our undersanding of the tax implications for each option we take for the future of our home...
Thanks for sharing your personal experience. This is a concrete example of how the new changes would affect real lives!
THANK YOU for speaking about this!😊
Sadly, Canada's recent capital gains tax increases have caused a significant loss of highly skilled workers (surgeons, doctors, dentists, etc) to leave Canada for USA Mexico Thailand, etc.
Yeah, it's mind blowing how the government doesn't realize what the macro, long-term impacts are. In the short term, more dollars in, in the long-term-???😂
Yeah and more are leaving, We have a Great Communist Government! Let’s get rid of our Clown Trudeau and Freeland
Who told you that? Who invented that fake statistic?
@@JayB-JayB the real reason why Doctors in Alberta are leaving are because of bad faith negotiating from the UCP combined with terrible working conditions along with uncertainty going forward with regards to healthcare accessibility in the province.
Proof??
Nice video. In your NVDA example, it is not obvious that FX is included. If the gain is US$500k (at a high level), the tax is much higher than you illustrated.
Also, have heard enough of "No sympathy for you if you are part of the 0.13%."... this country will never fulfill its potential.
And yet the cap. gain tax was at 75% in the recent past. This 66.67% is easier to minimize.
The government should cut the waste before raising our taxes again. How do we get DOGE in Canada? 😒
All for it! That would require a franchise, perhaps lol
Start with electing Pierre next year lol.
No he’s not perfect, but probably best choice given what we have to work with.
DOGE, have you looked into BitBuy (under Coinbase) Canadian Crypto broker?
Why would you ever want DOGE? It went through its manipulation stages a short couple of years ago.
Not hard to find if the "Internet" is used and a search is entered.
There are other CDN. crypto brokers who offer DOGE and many others.
The U.S.A. is being restricted by the CDN. financial institutions and not allowing CDN.'s to have a U.S. based crypto brokerage unless they have a real office in Canada (liek stock market brokerages). The big CDN. banks are controlling their monopoly in Canada.
Under Trudeau: 300% increase in federal servants, 13% year over year increases in salary, and can't get fired. These are unelected members who do redundant work. Most don't add value to society. All while skilled labour in trades (ie. construction & plumbing) are in constant demand
Are you talking about DOGE the crypto or are you talking about Department Of Government Efficiency... which leads back to the crypto DOGE?
Great video on capital gains. But I think you got the family home example wrong. The $500K gain in house value is not taxable when the son inherits the house even if he doesn't make it his primary residence. However, the gain above the value at time of death would be taxable later.
The property value is much lower than market price. So tax is still paid.
Great video. Thanks!
It's important to know how to survive and thrive regardless of who your politicians are, but honestly... I really can't wait for our current Federal Liberal/NDP government to be voted out😅 The Liberal/NDP coalition has decimated Canada in 8 short years. I think many others want them gone too😅
😂 It's about time! I can't see why it won't happen with how things are going!
Canada has become a joke! Can’t wait for Trudeau to be gone !!!
who do you propose to replace JT? PP is way worse. no real plans. no real goals. his own party members fear retaliation if they criticize him. he just makes inflammatory rhetorics.
These taxes are not the issue. The issue is the level of corruption that makes improper use of this capital. If we start to see heavy investments in public transit, education, meals for kids in schools, more hospitals, more walkable city infrastructure, housing, etc then people will feel their material lives improve. Right now the issue is that if taxes increase but there's nothing to show for it on the other end, it causes people to be upset and unhappy with their lives continuously getting worse instead of better.
I agree to a point. I feel very demotivated because the more I earn, the less I take in for myself, there's not much point earning more money when up to 50% of it vanishes. The worst part, is as you say, despite paying massive amounts of tax, very little comes back in return due to massive waste and corruption, which makes the thievery even more infuriating.
Where in the hell do you think all your taxes are going! Public sector salaries and benefits!!!! Unions are killing Canadians. You only benefit if you work for the government! Everyone else will just have to keep,paying more in taxes so public sector salaries workers can keep getting increases every year. It’s become ridiculous. And leading government officials will never stand up to public sector unions because they are to strong when it comes time to vote them out!
We must use this tax money to house and feed countless useless immigrants and provide free sex change surgeries to youth
so you dont see high prices for literally eveyrthing an issue? id have to disagree.. majority or a larg eportion live below the poverty level
"The issue is the level of corruption..." - If you have any evidence of corruption why have you not reported it to the police?
Im so done with Canada... cost of living is already so high and taxes are just getting higher! It's so important to learn how to pay less taxes especially in Canada
Talk about your perspective about Bitcoin please
The video on bitcoin is coming up pretty soon, in the next 1-2 weeks, stay tuned!
you invest in bitcoin youre a retard..just give me your money ill take it too
Great video!
Maybe you could look into Canadian tax residency as one of your future video topics, as many people are trying to give it up
Thank you! If I ever get to that point myself, I'll cover it!
Capital gains is a tax on inflation. It only started in 1972. If you bought an asset for $100 in 1972 and sold it for $700 today you would be assessed a capital gain of $600. Sounds good till you factor in inflation and find out that your gain in constant currency is exactly ZERO. You will be taxed on all of that supposed gain. Gain that is all due to the devaluation of the currency. A tax on inflation.
Lol. That's so hilariously inaccurate.
If you held an asset from 1972, and those are your total returns, I hate to break it to you but you invested in a lemon.
In 1980 if you invested 100 dollars here are the returns (reinvested dividends)
- Mcdonalds: $1,915,903
- Coca Cola: $33,056
- Walmart: $242,064
- The New York Times: $5,336
- Boeing: $12,450
- Chevron: $8,864
- IBM: $3,969
- Southwest Airlines: $20,209
If you bought a house for 100k and you give it to your son at whats worth 500k you have to pay capital gain on 400k. Which will put your kids into mortgage debt if neither of you have money to pay the capital gain tax. Your hard earned money and canadian dream become the government's asset.
@holhydro If it becomes your son's primary residence, then this does not apply.
@jasonmacfarlund2703 well if its an estate that is not.. or a small business, commercial property etc it applies. the government has been leeching off the corporate tax, property taxes all these years and still get taxed when you pass down your hard earn to your own family.
The capital gains has changed because it used to be a flat 20%, which benefited the rich. Since now its a PERCENTAGE of your capital gains that is then taxed based on your INCOME, those with HIGHER INCOME pay more tax on their capital gains, those that make less income pay LESS tax on their capital gains. When you do the calculation, its roughly 12.5% for those in a normal income bracket, which is GREAT for lower income people. The 67% applies only to the next $250,000 in capital gains, and even that comes to roughly 25%...still not that bad. So lower income pays less in tax...as it should be.
67% only applies to capital gains above $250 000. The first $250 000 is subject to a 50% inclusion rate.
Can you do a video on the proposed savings account tax?
They announced a 250$ check for next year, almost everyone claps.
But they'll lose way more later, but they still clap from hearing of the incoming check...
Seems like most of the people in this comment section have never been outside Canada and don't understand what the rest of the world is going through, thinking Canada is the sole island on fire in the middle of a thriving world. I invite you to travel and see how quickly you will come running back
You have no idea what you’re talking about.
Taxing capital gains is often not a tax on increased value but rather a tax on inflation!!
Exactly! Inflation is in fact a hidden tax onto itself. And they manage to tax your taxes though capital gains taxes.
But you are not done paying. Once you got what little is left, you still have to pay more taxes with gst, pst, beer tax, cigarette tax, gas tax, carbon tax, and a zillion other taxes.
At what point do we admit we live in a failed state?
The only good thing that came from canada the past 2 years is the FHSA account... Anything you put in and take out is automatically taxed at a lower rate and any capital gains made in it are not subject to the same capital gains tax.
God speed to all of us who choose to remain in Canada. The insane amount of tax we pay here only to have unreliable and unacceptable public institutions like healthcare, roads, safety etc. It's all crumbling away. I am thankful for my TFSA its the one saving grace, selling all my rental portfolio next year going to stomach that capital gains tax and take my investment income and leave the country!
Canadians never back down from a challenge and if you run away your cowardice will show. You don't build a country in day and we always have bumps in the road but to give up when it's hard shows you lost your canadian spirit. If you don't like how the country running fight for change by voting, posting ideas on social, make shorts about issues like this, get involed in local groups and talk to people because your personal bias can be the reason for so much hate towards our country. Never back from a challenge if you don't believe me ask a senior what their biggest regret is in life.
Thank you very much if you can share more similar vids that would be awesome. They tax too much instead of just spending responsibility especially since they are not a reserve currency. Can you please do a video on tax deferrals example i think you can use your gain to buy pension or rrsp to defer taxes or reduce your taxes for the year you have a high capital gain sell of over $250k
If you inherited a $500,000.00 house from your parents and there is no inheritance tax, wouldn't the evaluation for capital gains start when you took possession? After all, it was your parents' principal residence for most of that increase. You could sell it right away or rent it out and pay the increase in value as a capital gain. Am I wrong about this?
There is another nasty side effect. Consider that after you have cashed in your investments, under the new rules (which are yet to be passed into law), you'll have significantly less money left over after the additional taxes are included, this means you will have less money to re-invest back into the Canadian economy. They should, at the very least, allow for a tax-free re-investment, provided it is done within a certain time frame, and they could even stipulate that it must be a majority owned Canadian investment to qualify. The so-called tax breaks, such as a TFSA are too puny to matter. For corporations, the situation is much worse, there are no breaks what-so-ever. The only benefit a corporation has, is that their income is taxed at a slightly lower rate than for individuals, and corporations are allowed a much wider range of expensive deductions (personal expenses have no meaningful deductions). What it means for a corporation, is at least more money can be re-invested back into the economy, that despite the gains being 100% taxable as income when cashed out. The bottom line is, the government is taxing mostly all the wrong things, and are doing it in highly damaging ways, such as the "retroactive tax" that we're discussing.
These capital gains taxes do not include inflation.
I know a few doctors in Canada and they hate being taxed. Most doctors prefer the US, the main issue is that US are more 'racist' than Canada. Actually the brain drain is primarily to the US, Canadian doctors are not rushing to India or Belgium or England.
Great informative video! thanks
Minor point, you would not pay CCP on the capital gains income.
Great presentation. Canada is a great country to exploit, welfare, healthcare, social services. I would never start business in Canada again. If you are young just do whatever it takes to move to USA do not waste your time here. Also, keep in mind the exit tax...
From someone who started a business many years ago, I agree, don't waste your time in Canada, get things working in the USA asap. Canada is a laggard, and also has a tiny market compared to the USA. Taxes in USA also suck, it's not much better, but the amount of money you can earn makes up for it.
The US is a great place to live if you are in top twenty percent of income earners who earn more and pay less in taxes than Canadian counterparts... If not, Canada is better. If living in a major city average rents are higher in the US. You can also enjoy paying more than double for the healthcare despite the US does not have universal healthcare and less services in general so rich people can pay less taxes. Despite paying far more for health care, America has had a lower life expectancy than Canada for decades. America also has substially more crime. For instance the US has a 300 percent higher homocide rate than Canada while the alleged land of the free incarcerates at 5 times the rate of Canada. Most international rankings put average Canadians as having a higher standard of living than average Americans.
Starting a business is one of the few ways you can still find ways to reduce your taxes in Canada... But yes leaving Canada can be a good option to build more wealth someone else if you are able to.
@@mydogsbutler I agree, these are good points. However, if you are top 20% earner you can live wherever you want.
I don’t mind paying high taxes. Providing that this money goes back to me as quality services and infrastructure and is not used to feed the freeloaders. Which the last seems to be the case in Canada.
The healthcare system in Canada is not designed for working people. The wait times are insane and if you are sick you must travel to USA to see a real doctor. Essentially, healthcare works great for those who are young and healthy.
In US you can easily find a less diverse neighborhood where the crime rate is much lower. More like 1 homicide per 100 years. Versus in Canada in any larger or smaller city you can be stubbed, shot or set on fire. Unless you are willing to travel very far. I watch the morning news, and Kiev seems to be a safer place to live than the Toronto area.
The ranking of the cities really has nothing to do with reality. I saw the lists including Abu Dhabi, UAE or Nairobi as the best cites to live in.
The taxes in this country is ridiculous
I wouldn't talk about politics, except you said “a new government that softens that rule”. It's important to note that 1. the other party has been spreading a lot of the misinformation about this tax change, and 2. that same party previously had changed the inclusion rate to 67% for all capital gains. They are pretending to be for the people, but are only using this situation to get votes, nothing more.
As for the rest of the discussion, you failed to give the full picture.
Inheriting a house:
Unless someone dies unexpectedly, willing your house to someone is, to be frank, poor tax planning. Neither cash gifts nor cash inheritances are taxable so there are ways to avoid the increase in capital gains tax. Also, since your principal residence is not subject to capital gains tax, selling your property before dying would save both yourself and the inheritor taxes.
Multiple properties:
Nobody buys a property just for the rental income, they are hoping for capital gains, which typically exceed inflation. It is intended to be income so why not treat it as such.
Doctors and lawyers:
They were not previously allowed to incorporate, but when that changed, they hid their income in the corporations. They reported salaries that were far below what they would accept if they were working in a hospital. If they had actually reported proper salaries, while charging a reasonable amount from the corporation for overhead and profit, they probably wouldn't see a change like this. Note that corporate tax rates are also lower than personal tax rates so they save a lot of tax money either way.
As for the brain drain, we should be looking at those who return to Canada after they discover the costs of running a practice in the US. With a few exceptions, notably plastic surgery, US doctors make similar incomes to Canadian doctors primarily due to the cost of managing insurance.
It baffles me why there is an inclusion rate at all. All income should be taxed at the appropriate income tax rates. Historically this whole arrangement was to benefit the wealthy because common folk had no capital gains. What we should be doing is taxing all income the same; whether it's a business or individual; whether it's a salary, dividends, or capital gains, then reducing the tax rates for the bottom two brackets (below $110k income). This would give a much greater benefit where it's needed most.
Nobody likes taxes, but we all like having roads to drive on, sewers to take our waste, and police to provide protection and enforce the law. Corporations will come if there is profit to be made so we need to stop pandering. If they don't, it leaves space for small Canadian businesses to thrive, which keeps money in Canada. Europe has shown us that you can be profitable while paying reasonable taxes, having high labour standards, and protecting the environment.
One last point, we can't talk about the reduction of productivity in Canada without mentioning how the reduction of publicly funded research directly affected Canada's position as a leader in high tech and other industries. “They” said private industry will fund innovation, but that only happens if the corporations see high profit opportunities. Canada's R&D laid the groundwork for many ideas to become profitable and companies took it from there.
@@CRuM770 well said. This change would hardly factor into a prospective professionals consideration to immigrate to Canada. This is fear mongering at its best.
Brings to mind south of the border; where touch screen displays, the internet and Siri are the products of public research funding hence Steve Jobs most successful product would not exist if it weren’t for the billions of dollars that the US government spent on research and development. Apple in its early stages received federal funding. Ironically venture capitalists were only interested in Apple after they got the funding secured.
My understanding is that the capital gains tax hike is still not in effect. It was in the budget, but got taken out of the budget and made its own bill because Trudeau kept trying to draw Poilievre into talking about the capital gains tax in the house of commons but Poilievre kept on ignoring talking about until after it became its own bill, and a vote taken on it. Then when the STDC scandal broke out, the conservatives tried to get the government to release these documents to the RCMP, I'm not exactly sure on the exact process in Parliament, but the Speaker of the house was forced to stop all government business until they release the documents unredacted to the RCMP and the capital gains tax hike bill was still in the senate when it got stuck there since all government bills get paused until the documents get released, so the tax hike is still not in effect, and if we get an election before it gets passed, there is no tax hike.
That's true. Anybody has any reference to when that got approved separately? officially it sounds like its in effect. But @Martmi29 has a great point. I also remember it was taken out in the budget.
You are correct, the cap gains tax is still not in effect. What may happen, is it never gets passed into law, and as soon as a new election is called, yhe bill dies. When PP takes over, the unpassed bill can be simply be ignored, and left to remain dead. The uncertainty, and the criminal retroactive nature of this insidious tax increase, is part of what makes it such a horrible policy. It's as if Trudeau is intentionally ruining Canada's economy, almost nothing he has fone benifits Canada. We have a PM, who never had to manage his own financial affairs, he receives "free money" from his trust fund, and someone else manages it, snd everything else in his pathetic life. Canada is just a play thing to Trudeau, he's using it to stroke his ego, get tickets to Taylor Swift concerts, and play dress up when traveling to other countries. Trudeau is a really sick man.
I think that the tax should be much higher - for wealthy elites who are moving their money over here and using our communities as a safety deposit box.
lol canadians really like to fantasize. have you travelled to the balkans or eastern europe lately? i bet you can't afford
Just give the Government all your sht and forget about taxes! Tent cities are at every highway exit, live the Canadian dream!
I don't understand blanket changes like this. If anything the capital gains tax should only effect the real estate market and money raised should go directly into R&D spending to get us back on our feet. How are we supposed to develop our economy in these conditions? Just another reason my partner and I are trying to take our graduate degrees elsewhere.
THE LAW IS NOT YET IN EFFECT. There is a step in the process of a law becoming fully active. It is called “Royal Assent”. I spoke with 5 different CRA agents on the same day (last week) about capital gains for an investment. One agent admitted that the Royal Assent was not yet received, hence currently the inclusion rate is not yet 66%. When I asked how long it would take for Royal Assent to be received, they said probably next year. Given the Trump presidency with potentially damaging benefits of 25% trade tariffs, it’s hard to say if this law will ever be enacted due to its detrimental effects on businesses.
It is already in effect as per June 25, 2024. You can google it.
No you are wrong. The law is not yet active. There is a final stage in the passing of this law that requires “Royal Assent”. This has not yet been achieved. This means that the window is not actually closed. Nobody knows when the law will actually come into affect. It’s very important that people do their homework and research. I’m personally disappointed in our leadership because of the mass scare this caused for many investors when in fact these rules didn’t affect their investment decisions. You can still safely sell your property at the current time without the increased inclusion rate. When will it truly change? The CRA agents couldn’t say when it would happen “Next Year”.
If this tax sticks then in a generation most capital gains will be over 250,000. My town still has a luxury tax on house purchases over 200,000 but now they call it by another name.
Inclusion rates have bounced around throughout recent Canadian history. In the 90s under the Liberals, it was 2/3 on all gains. I believe it was also 75% before that. The conservatives dropped it to 50% across the board in the 2000s.
It will probably change again, depending on who's in power.
Purpose of this is to seize peoples property when they pass away because of inflation increasing the value of it.
They should Drop the capital gains tax on all investments for people investing with after tax dollars! Canada just keeps taxing everything, over and over! This takes away incentive from most Canadians. Tax the Ultra rich , top 5% richest. Let’s see if Pierre will bring they’d capital gains taxes down!
Trudeau is Destroying Canada! No wonder professionals are leaving!
tax is not the problem, the problem is they are just gobbling it up and we see nothing from that. our healthcare is in dire straits, education is worse and worse every year, our infrastructure is on hiatus, so where do all these taxes go?
The capital gains tax change is literally what you're asking for with "Tax the Ultra rich , top 5% richest".
Or are you under the impression that people making over 250k in capital gains/year represent the struggling?
The "ultra rich" get there with their capital gains.
If someone is fortunate enough to collect a capital gain over $250,000 they should feel gratitude. Canadian Patriots will feel gratitude and would happily pay this tax.
No way in hell PP will take that away my dude, he'll come up with some bs reasons but he won't say no to 5 Billions extra tax income.
@@Krueger444it sounds like you skipped the video and also consider anyone who makes gains on investments over 250k as ultra rich.. wouldn't it make sense to then also have 75% over x amount 80% over y amount and 90% over z amount? Thus ensuring people try to evade taxes and make thir money illegally or outside of Canada instead..? Cause that is what would happen if targeting the ultra rich instead of just anyone who isn't struggling too hard to be able to invest... crab bucket mentality sounds like
So you're telling me the money I made from my construction job was taxed once already, then I go to make gains in the crypto market with what little money I had left over gets taxed again. All the while I still live with my parents and I'm trying to find a way to buy my own place but the government is screwing me over with their excessive taxation???
dont worry you wont make anything in crypto its a scam
@sonnyc3826 I'm willing to find out for myself. Got to risk it for the biscuit, haha
If you put the money into a TFSA, your investment gains are tax-free, forever.
If you've never used a TFSA, your unused (available) contribution limit is as much as nearly $100 000 (depending on your age)
@@King_of_Sofa lol you're so poor yet you still think this affects you. If you're making 250k+++ PROFITS per year on crypto (because that's the literal only way it would apply to you) you should quit your construction job and open up an exchange.
@@Cdot4585 respectfully, I will decline your advice
There’s a limit to the amount of tax some people are willing to pay. They’ll either work less or leave the country. Canada has many great attributes however its productivity is undermining things. Tall poppy syndrome.
People are leaving Canada in droves because of insane taxes (all sorts) and unemployment or low pay, hardly enough for mere survival - it's survival vs living! It has become impossible to survive in Canada as their economy sinks to rockbottom. It is also dangerous trying to survive in a place with no access to healthcare, in addition to being robbed of insane taxes!
It is FAR WORSE in the UNITED STATES< a failed model. Please don't grouch about Canada until you lived there, and you will see. Those that think Canada tax rate is much higher than the USA failed math class, which is about 85% of all Americans and Canadians
@@peterlohnes1 the tax rates are lower, but it leads to a much higher cost of living. Imagine not giving birth in a hospital because you can't afford it, or working for $7/hr in a "right to work" state.
@CRuM770 imagine buying health insurance and not having to wait 12 months for a knee surgery.
No more voting for Libtards! This means you in Toronto
@@peterlohnes1Wrong. Canadians earn 37% less on average than Americans, can write off any mortgage or loan interest payments and enjoy numerous other tax advantages; for example, they can set up a trust fund or non-profit to hold their investments and pay themselves a salary- TAX FREE. There’s no such thing in Canada. It sucks to be an investor here
tfsas do not save you from capital gains tax, the government at any point can decide that your investment in a tfsa made too much money and they now need to retroactively add it to your taxes for that fiscal year
Your thunderbay example is wrong. When his parents die the assets are deemed to be disposed at fair market value and Joe is deemed to have acquired that asset for a cost basis at today's value.
If you had 100,000 to buy nivida, consider yourself lucky. To have it turn into 500, 000, you got even luckier. Don't worry about paying the extra capital gains taxes. The problem with govt taxes is that the present and, in fact, past govts have not properly used taxes to spur econmic growth or improve healthcare or education. Taxes are used to redistribute wealth rather than to try and grow the economy. Corporate taxes are lower in Canada than the U.S. Indiviuals in Canada are taxed greater than the U.S. Draw your own conclusions.
i dont see a capital gains tax of over 250k as a problem this would combat those who buy and flip houses as many do and they do it cheaply to make the most profit..
The greatest con that people do to the working class is dangle the low statically possibly of their "imaged future wealth" to get the working class/middle class to rage against policies that would actually cause those with the greatest amount of means RIGHT NOW to pay their fair share. If you are in the minority that will bank over $250,000 in capital gains, you can AFFORD a good tax accountanr to offset your taxes.
High income earners already pay most of the tax. Living and working in Canada is already a bad deal for high income earners due to high taxes. Why should a high income earner stay in Canada if they can make $100k more after tax by moving to the United States? How can a country thrive if it depends on highly skilled professionals sticking around despite it not being in their best interest?
@@MrAnimus Then Move to the states. The things you save in taxes, you end up buying 10x that in out of pocket expenses in the US... Healthcare, education etc can literally bankrupt you in the US.
@@Queenb2001 Telling high income earners like doctors and engineers to move the states is not a winning strategy for a country. They pay most of the taxes and provide a lot of economic value.
more taxes = negative economic growth less taxes = positive economic growth.
Around the globe, governments are failing to do their job, and who gets punished? Citizens with higher taxes.
you can designate your higher capital gain value property as principal residence and you don't need to live there for whole year.
Subscribed. YOU for PM. Hopefully we get a new government that revises this....doubtful I know. Paying such high rates of tax on already taxed capital that has been placed at risk is counter intuitive at best. To raise it from its already previous high amount is greed at its finest. Thank you Liberals......that was sarcasm
As taxes rise, those affected start leaving for more tax
friendly countries because they can. Instead of more taxes being collected there now becomes a short fall and the middle class foots the bill ..
People that use housing as investment should be paying the maximum amount of tax.
So i was someone who didn't care about paying taxes and was proud to pay taxes...but recently i started to think about making a business and i soon realized that Canadian tax is kinda aggressive....i understand we are kinda in the middle of the spectrum b/n social and capital but its not a good start for a small business like mine...and also i invested on some stocks and my money kinda grew quite a bit and now im worried about the amount of taxes that i have to pay......it feels like im being ripped of and im scared to liquidate my money in fears that it will trigger a tax alert...God help me...
Lol. In germany we have a 1000€ tax free socket every year (not cumuitive over lifetime) and then pay 26.5% on it. In addition we have like 60% in taxes and social security once you hit 20k yearly employment income. If you life soley of from your capital gains depending on how much you make every year you have to oay up to 1600€ per month for social security shenanigance.
Canada seems to be antax heaven.
Beats 100% like in the US. It has also been as high as 75% in Canada not that long ago, raised from 50% by Conservatives.
"From 1972 to 1987, the capital gains inclusion rate was one-half (50 per cent).
In 1988, the inclusion rate was raised to two-thirds (66.67 per cent).
In 1990, the inclusion rate was further raised to three-quarters (75 per cent).
From February 28, 2000, to October 17, 2000, the inclusion rate was two-thirds.
Since October 18, 2000, the inclusion rate has been one-half."
Who was the PM in 1988 when the rate was increased from 50 to 66.67%, just like Trudeau did in June, 2024? Brian Mulroney, Conservative. He then raised it even farther to 75%, in 1990. Who was PM in 2000 when it was lowered back to 50%? Jean Chretien, Liberal.
Conservatives is worse than Liberal???
Something I will never have to worry about, but rich people are trying really hard to get me to care about.
I hope the idea that people will go where they are treated best gets into Canadians heads. I’m tired of hearing how certain people need to “pay their fair share” or that “they make enough”. Canada is not the only country in the world. Why should a world class professional stay in Canada when they could move to the United States and make 100s of thousands of dollars more after tax?
This is the main reason for increasing inflation.
Go where you're treated best... and it's definitely not Canada.
In Switzerland you pay 0. In some US States you pay 20% Federal, 10% State and 5% City; 35%. So you are fortunate.
Canada pays about 40 cent sor more on a dollar tax, then when you spend youre taxed again.
But there is a cantonal capital gains tax on selling Swiss non-movable assets.
How does this affect someone who has rented out his own property and then living in a rental apartment? My condo one and only property in Toronto is rented while I am currently living in Montreal in an apartment due to family situation. Will the capital gain tax affect me because my condo was a primary residence but now rented and I am also renting
hmmm....your Thunder Bay example maybe incorrect. The parent's house is deemed to be disposed at the time of their passing and I would agree is not subject to any capital gains as it is their principle residence. As it has been deemed to be disposed, it is however subject to probate and at the transfer of the inheritance, the value of the home at the time of the deemed disposition is the value that is carried forward as the inheritance value. Should the child decide to that home in Thunder Bay any capital gains will be calculated from the valuation at transfer date or the date of passing. So, in your example if the home is valued at $500k at the time of passing and the child sells the house later say $600k the capital gains is only $100k not from the parent's original purchase price. That is my understanding from an estate point of view. This is similar if the house was passed onto the child it has to be done in an "arms length" transaction or market value and any increase thereafter is subject to the capital gains.
100% of capital gains should be taxed, for everyone. There is a class of people who provide no value and hoard money who made the rule that only 50% of their profits should be taxed… the tax rate should be higher too
Let me summarize who this will affect: 1. You own 2 houses and planning to sell one. 2. You have more than 250k annual investment capital gain (say 10% return then you need $2.5 million invested). Does this affect you?
It also affects employees of tech start-ups (the demographic politicians all over the world claim to be begging for more of). Many such employees receive below-standard pay (compared to their qualifications and abilities) in return for receiving stock options in their start-ups which will pay off big if the company succeeds (and be worthless if it doesn't).
When they actually cash in those options (triggering capital gains taxes), they now take a much bigger tax hit, so they are looking elsewhere even more than previously.
after hearing your thoughts, i guess it's too high. what is the government's reason for raising this tax anyway?
They are broke because they have been spending and pocketing too much, so they want to take more from you.
What has Canada done to earn this kind of taxes of my investments. We need new representation!
So, basically, if I made $ 40,000 cap gains, it would taxed on $ 26,640 and the rest non taxed? Considering TFSA limit is $40,000?
Gains made in your TFSA are always untaxed. Outside of the TFSA, this change would not impact your 40k of capital gains - you'd be taxed on 20k. What this change does is for someone making, say, 300k in capital gains. Previously, you'd pay tax on 150k of that, but under the new changes, you'd be paying on 125 (50% of 250) + 33.5 (67% of 300-250) = 158.5k. Assuming a roughly 50% tax bracket at that income level, you're looking at a roughly $4k increase in your tax bill (again, on a 300k capital gain).
40k cap gain would be around 8k with a 40% marginal rate.
TFSA limit is about 93k if you're maxed out.
Also making 40k of capital gain means you made 10% off a 400 000k investment in a non-registered account.
@Krueger444 that's bullshit from the government. Thank you for the comment.
@@DavidDubord ok makes sense.
100% voting for pollievre
Viva Pierre!
He will be worse. You'll see
Pollievre is a Randroid whose policies amount to trolling Trudeau rather than explaining what he would do to solve actual problems. For instance, cutting carbon tax will only take money out of government coffers and reward ICE use. It wouldn't address co2. He has no policy for dealing with co2. Physics isn't going to change because conservatives evade this issue.
@@johnm8657 Worst than who? You clearly are not talking about Mr Trudope, are you?
@@robertomartinez8966 You are right, it's good cop, bad cop.....two sides of the same coin.... Morons following the spawn of satan... then they divide us.... gays vs straight, whites vs blacks, now us vs the indians and the latest. World us Palestine. I refuse to list to their total bull shit. Right is right, wrong is wrong.. The children of satan has control of the media, banks and our government. these politicians are deluded.
From the graphic, it looks like you are paying a 67% tax on capital gains! Very misleading.
Right on with your analysis. This is one of the dumbest, short-sighted moves by the liberal/NDP government in my 44 years of business spanning institutional venture capital, investment banking and co-founder of six companies. The liberal/NDP government has never seen a tax it doesn’t like. Unfortunately, it would appear that they do not possess the requisite education and experience, collectively, to understand the longer term consequences of their policies. Then again, politics is a short-term game - particularly for those that are incompetent.
Our government is out of control. I'm happy to not take any capital gain until this policy is more friend to taxpayers. If the next electoral does not change it will move on.
It should be zero on capital gains. We pay enough tax on income and property tax.
Inheritance related taxes... Ensuring the poor can't afford what was inherited to them so they are forced to sell it to pay the government based on a wild Fair Market Value preventing them from owning what they were given.
Absolute robbery 67 percent is pathetic. First time someone has to pay that they will leave and never pay a single dollar of tax again here. I’m leaving by 2029