Big news for Canadians! Prime Minister Mark Carney says he will not go ahead with the plan to raise capital gains taxes. This decision is a big change to what the Liberal government had planned in the 2024 budget.
What Is a Capital Gain?
A capital gain happens when you sell something like a house (except your principal residence) , a stock, or a business and make money from it. Right now, only half of that money is taxed. But the government wanted to change that to two-thirds for people making over $250,000 in capital gains per year. That would mean more taxes for many Canadians.
Why Was the Tax Hike Canceled?
The plan to increase the capital gains tax was supposed to start on June 25 of last year. But it got a lot of pushback from small business owners, tech leaders, doctors, and other professionals. They said it would hurt jobs, investments, and even health care.
Many people, including the Canadian Medical Association, were worried. They said doctors, who often save for retirement using corporations, would be hit hard. With a doctor shortage already happening in Canada, this tax could make it worse.
Prime Minister Carney said that canceling the hike will help small businesses grow and encourage investment in Canadian communities. “It will help job creation and boost private investment,” he said.
What Will Happen Instead?
The Liberals still plan to increase the lifetime capital gains exemption. This means if you sell small business shares or farm or fishing property, you can now make up to $1.25 million in gains without paying tax on it. This is more than the old limit of $1 million. The government says it will bring in a law to make this official later on.
What About People Who Already Paid?
Some people or businesses might have already paid more tax because they thought the new rules were starting. The Canada Revenue Agency (CRA) says it will look at those cases again and fix them if needed.
Final Thoughts
This decision is a big win for Canadian entrepreneurs, doctors, farmers, and anyone who wants to invest in their future. The change shows that the government is listening and wants to support growth rather than slow it down with new taxes.
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