Finally we have a video and voice of reason about this capital gains change. I’ve seen way too much BS and misinformation about this… just to stir up panic and drama for views🤦♀️ thanks Adrian 🎉
Hey @CanadianTShirt I am new to your channel this year and learned a lot! I appreciate your videos; they greatly help me grow into adulthood! Unfortunately, this is a difficult time for everyone, and people get angry thanks to misinformation, lack of knowledge, and so much spilling out on your channel. I want you to know that your videos are great, and they improve me as a person financially each day! Ignore all the heat and keep on doing what you are doing! 😊👍 I am only wondering how you can keep more of your money as a high-income earner. The high-income earners' tax bracket seems high, so what are your tips? As I grow older and try to be successful, I need to be mindful of my money. Please let me know. I'd love to chat with you. Have a great day, Adrian! ✌️😎👍
I won't say any names, but there's some rich gentrifier spouting hate and misinformation about the subject. You have to be so careful when doing reaserch
9% increase is massive. A government who exists off taxation and has a spending problem then increases a very important vehicle of investment for Canadians by 9% and that isn’t an issue to you? Give your head a shake if you truly feel that way. Great video, well laid out but I do not agree with you. If I reduce my level of comfort to save money, then take that money and risk it by putting it into an asset. Pay for all the maintenance, wear and tear and upkeep on said asset. Then sell it in the future, why should the government be entitled to an additional 9%? Did I also mention that property taxes, gas, electricity and water have also all increased? So where does that taxing stop?
Absolutely correct. Most Canadians aren’t angry because of paying taxes or a rise in taxes, we are absolutely PiSSED that the money raised is squandered, mismanaged and embezzled over seas or to Liberal politicians/donors and not actual Canadians that need help now especially with preparing for retirement . If we were receiving value for what we put in, 90% of us wouldn’t be bitching even though this ONLY applies to less than 1% ……but is a start to taxing our primary house. Disappointed in you Canadian in a Tshirt, you made this sound overly positive instead of correcting misinformation yet addressing that we are severely taxed with it not being applied properly to our elderly and youth …those that led the way and those that will come in after us currently making the system run. Shame on you
The problem is our government does not use the tax payers money effectively though. Our health case system is atrocious and we just sent $5b to Ukraine
You got that right, we NEED more accountability on government spending through all levels of government: federal, provincial and municipal. It's rare to see any progress there though
Well, people keep electing Provincial governments for some time (who decide where and how to allocate tax money within healthcare) that have made deep cuts to health spending and poor planning. That is what austerity is. 🤷♀️
I feel like people need a little bit more self-awareness when they publicly complain about paying taxes on $300K worth of profit... you'll be all right lol
Are you insane? This is UA-cam on the Internet and you are obligated to misrepresent this information. What compelled you to explain this correctly? --> Great job! You're awesome!
@@CanadianTShirt I was called a "poor" when I pointed out that only 2% of Canadians have incomes greater than $250K (yes, CG is different-ish) and the other 98% don't care about the 2%ers crocodile tears.
It’s not a big deal in your example of making 300k profit on a cottage (only 50k over the exemption) but if you make 1.25 million you pay tax on 67% of a million I’m hearing stories about doctors that are very upset who invested in a cottage many years ago which is worth a lot more now and were going to sell it for retirement Some speculate that more doctors will leave Canada and cause even more of a doctor shortage
Maybe it shouldn’t have been retroactive and just for new properties and/or buy/sell dated transactions? Because in that case, said doctors should sell asap and move that money away from the country or similar.
I hear what you're saying but that would be extremely unfair and most of the population would be rightfully pissed. Basically all the younger people who don't already have accumulated large assets would pay the higher price but the older generations who have already built up, would get a tax break... I doubt that would pass
@@CanadianTShirt Favourable for whom? All money directed to personal use; wages, bonuses, and profit incentives are taxed by our government. The capital "gains tax" is not really a gain but becomes a ball and chain for a business that wants to re-invest profits to grow the company. Of course, that action makes the company worth more...another gain. I am a former business owner, retired, and I hated this tax. It is really a double taxation. Those private property investments are only worth more because their owners invested back into the property. Now they face a huge tax bill because they thought that was investing in the future. What the hell, is favourable about blind-siding these investors. Our governments are playing loose with money invested into retirement. It will soon devolve into taxing the assumed value "gained" on an investment. This will be our private homes soon today. Make the right stand and rid ourselves of this unfair double taxation.
Honestly at this point, I don't really feel the desire to make another video on this topic.... I usually LOVE answering questions and engaging with everyone in the comments. But this time, a good chunk of the comments are just awful and discouraging. It really sucks but oh well, welcome to 2024 I guess 🤷♂️
@@CanadianTShirt please don't stop making videos! You're always a balanced and trustworthy source of information, and I deeply appreciate the work and education you provide! I'm personally interested in how it will affect doctors who are professionally incorporated like myself. I can't believe that people are being so hateful online... please don't let it affect you, it's a small but loud minority.
Thank you I appreciate those kind words! And don't worry, I absolutely WILL continue to make tax videos! I just miss the days when I would present numbers and people would learn and listen. Now it seems like 20% of people get personally offended and lash out when I say "this is the tax rate at this tax bracket..." 🤷♂️
I hear you but remember these taxes aren't new. Capital Gains tax has been around since 1972 and we've seen it much higher in the past, it had an inclusion rate of 75% throughout the 90s!
But yes I hear you, it is definitely frustrating if you are now forced to pay this higher tax unexpectedly. That's why it's SO important to keep informed and come up with a plan to minimize your tax bill and make the most of your money!
Ya it's been a rollercoaster when you look through the history. Basically every decade or so, they do a massive shift in capital gains. For us, we've had no changes for the past 24 years until now
And at least, they are "softening" the blow by only changing above the $250K threshold. In previous decades, they didn't have that and it was a massive and sudden change
Thank you very much for the video. Does this affect residents and non-residents alike? Specifically a non-resident holding shares in a Canadian Corporation that pays dividends quarterly
It gets much trickier with farm properties, especially if you lived on it as well! Since it's your residence plus your business. I'm not an expert in this regard but there are several exemptions when it comes to farmland. I would suggest talking to an accountant who specializes in farm land. Good luck! =)
You're not alone! A ton of people are confused by this new change and frankly, the government has done an awful job of spelling it out. That's what I try to do! =)
@@CanadianTShirt I wish, as a former Canadian and US tax accountant, it is appalling the very large amount of Canadians who have no idea about their income, investments, etc. or who think Capital Gains tax is new! Or that most Canadians will never have this apply to them! 😮 I really believe that people need to take personal responsibility to learn and understand the minimum amount about western economies and how capitalism works/economics/taxation. 😊 cheers!
It is very frustrating and I wish the government did a better job of spelling this out, instead misinformation and rage-baiting has taken over the public narrative. But thank you for being so engaged and leaving so many comments! And keeping it respectful! 🙏
Excellent level-headed summary, Adrian. Instead of being sucked into rage-bait, people need to realize that the tax burden has increasingly been pushed onto the shoulders of the middle class over the last 40+ years. This tax change is a pretty mediocre attempt at reversing that trend. This won't affect the vast majority of people who are acting so outraged.
I appreciate those kind words, it has been very frustrating seeing so much insincere, fake outrage over this... and sadly so many people fall for it... You should NEVER blindly believe anything you see online (including my videos!) You should always double check these numbers for yourself
It seems to me that it would be more fair to allow you amortize the gain by the number of years you opened the asset? That way, a family that has owned property for many years could more easily transfer it to their children without having to come up with some way to pay the tax all in one year while still curbing speculation.
I think the problem people have is the fact our government is mismanaging tax funds. There seems to be no accountability, restraint or even review of how funds are allocated. You don’t give booze to an alcoholic. You offer to those that drink responsibly.
That is true and we should demand more accountability across all levels of government, federal, provincial and municipal. But that doesn't mean that we just sit on our hands and do nothing. The government should continue to propose new legislation (like this) AND work on more transparency and accountability. Unfortunately, I don't see much progress on that front, from any political party
I have some concerns about the increase taxes. The corporations will need to recoup their losses and the price of that is reflected in goods. That and the fact liberals have a big spending problem is worrisome. I fail to see how adding additional taxes in the current economy helps Canadians in the long run.
Oh you're not increasing the tax rate on corporate income! Corporate income is still taxed SUPER low in Canada (among the lowest in the world) This change only affects capital gains so investments in a corporation. And most corporations do NOT invest, literally only 12% of corporations have capital gains
It really shouldn't because the vast majority of a corporation's income does NOT come from capital gains. It comes from business income (actually selling a product or service) And that is not affected at all
Well ya, any income you earn is taxed. So if you receive a bonus or you work overtime and thus you earn above your regular salary, that income will get taxed the same as regular income
@@Reza19691348 not sure about that one because in many cases there is more then one inheriting a property they want to sell. And one of them may not own any property but selling it. Many scenarios.
@@Reza19691348 not sure about that one..more then one person can inherit property they want to sell and many cases one of them never owned any property but wanting to sell..many scenarios and not that straight forward I'm assuming.
Inheritance can get tricky since it depends on many many things. But essentially, everything that you receive will be tax-free on your end. But most of the assets of the deceased will trigger a deemed disposition, meaning they will be taxed as if they sold the assets right at their death. This tax is paid by the estate and you receive what is left. Again the amount you receive is tax free, it doesn't count as income for you
Most of the regular exemptions also apply for the estate. The big one being the principal residence. That is tax free but if they had a second property (cottage or rental property) that would be taxed as if they sold it. I hope that helps! =)
Watch my example where I break down how much of the capital gain is taxable. If you sell a second house and make a profit of $300K, first you take $250K and half of that is taxable ($125K) then your remaining $50K, 2/3 of that is taxable so $33K. So in total, your taxable income on that sale will be $158K
So that $158K plus your salary and any other income will fill up the tax brackets (each bracket will be taxed at that given rate) In my example, I made the math simpler by assuming you were already at the highest tax bracket. I hope that helps!
Thank you SO much for this video. I’ve seen so many people either legitimately misinterpreting the new rules or purposefully twisting it to make it sound worse than it actually is, just for political reasons. You explain it all brilliantly. 👏
It is incredibly frustrating when you see so much blatant misinformation or disingenuous trying to stir up outrage... let's stick to truth and solve real problems rather then get riled up over fiction
That's what I try to do! It's been so frustrating seeing all the misinformation the past few weeks but the government is equally responsible... They are so bad at explaining these things to everyday people...
Has anything changed for medical corporations? I just started practicing and just opened a medical corporation I just started investing with corporation at the start of this year.
@@epictetus3406everybody gets taxed on their retirement in Canada if they have an rsp. Doctors are seriously in the 1% and their ability to earn is far greater than 99% of Canadians. As is their ability to shelter from tax. Fact.
Sorry I can't see the full discussion, I think UA-cam flagged some of the comments but yes if a doctor is incorporated, they are already benefiting from massive tax savings on their incomes. Instead of paying 45% or higher on their income, they literally pay only 12% BUT the downside is that investments are taxed much heavier in a corporation than personal. That is nothing new, it's always been that way
So if doctors want to incorporate, yes they can get all those benefits but they also have to deal with the downsides. You can't have it both ways. Instead they should plan it out better, take some money out of the corporation and invest on the personal side with their TFSA and RRSP etc. That's what I do and like you said, once you have a corporation (or even multiple ones) you have so many options available at you. Versus a regular employee who has no options, 100% of their income is fully taxed with no way around it
@@CanadianTShirt Well T-shirt is in the title! I thought you had laser correction though? Could use frames with no lenses - haha! Btw, I saw an eye-opening vid from Adriano yesterday about different tax rates. I had no idea interest was 50%! I'm very cautious but forget that, now waiting for 2 GIC to mature and then moving everything into high yield ETFs.
@@danderson5084 and yes interest income (savings, GICs, etc) is FULLY taxed. It's treated the same as employment income so it's taxed the worst! Dividends are taxed better (Canadian dividend even more so) and then capital gains are the best =)
So I take the risk of a large mortgage, risk bad tenents, risk high interest rates, cover costs that rent does not, and save what little I have to bring down the principal with a yearly payment, all with money that has already been taxed. Then, after taking all the risk and financial hardship, the gov't comes in to take a cut of the profit. Make it make sense.
I am a landlord and yes, that's part of the job. It comes with risks and expenses. And yes you are STILL well rewarded for that risk with very tax-favourable rates
And remember, you do NOT have to sell, no one is making you! These capital gains ONLY apply if you sell for a profit. If what you're describing is true and your rental income is less than your expenses then you are operating at a loss so you are NOT paying any taxes!
In fact, you are likely REDUCING your taxes from your regular job so I'm not sure what you're complaining about... you're literally getting free money from the government 🤷♂️
I've been delaying instant gratification by saving since childhood. I don't think my time should be taxed. No handouts here (including nepotism for jobs, a business or lucrative know how and tools, car etc.) or inheritance either (different story if that is the source of your wealth in my mind) I still have decades to be invested... taxes will likely be even higher then. Brutal.
Hi. If you sell a home for more than 500,000 would this affect your marginal rate? I am a low income earner -40,000 and trying to understand what the marginal rate would be for BC if I sold a rental property. Thanks.
Yes, look at my example and the TAXABLE INCOME portion of that profit would be added to your salary and other forms of taxable income. That WILL put you in a higher tax bracket, likely the top tax bracket even with a low income (just for the one year)
So you have a salary of $40K and you sold a house with a profit of $500K. Your first $250K of profit, only half is taxed as income. So that's $125K of taxable income. The remaining $250K will be 2/3 taxable so $167. So in total, your taxable income for the year would be very large: $40K + $125K + $167K = $332K That puts you in the top tax bracket in every province
But again this is only for that one year when you sold the property. Next year, you would return to the lower tax bracket of $40K or whatever your income is at that point. I hope that helps! =)
@@CanadianTShirt yes but for example. My meds cost over 10k a year. My province out of pocket maximum is 10k. So I would loose 10k automatically plus 20k in child subsidies
Investing in real estate is STILL one of the best investments you can make. And yes even with this change, it is still one of the most tax favourable forms of income! Don't let anyone discourage you
June 25th... is it? the law has yet to be updated... so maybe not. If you believe it is going up, I disagree that you should hold out for long term... look at your short term needs, or if you are retired and have good estate, you may want to look at paying the gains tax now at the lower rate, rather than your estate paying the higher rate in the future.
It's officially passed, it's happening. Obviously you have to do a deep dive into your personal situation, financial goals, time horizons all that stuff. But generally speaking, if you weren't planning on selling any time soon, I would not advice you to panic and rush and sell in a hurry to beat the deadline. Selling is a big deal, do it on your terms =)
Reply to Canadian in a tee-shirt. I never said to million per year in capital gains , i said 2 million after a ( life time of work ) , farmers, small business ect, ( that when they sell or pass on their property to their children should be exempt from Capital Gains ; moreover at least 2 million for a one time exemption, on property , investments, ect.,, then 5o percent capital gains added to your income which sets your tax income for the year. The middle -class are not making 2 million per year, the wealthiest are making fatr more Respectfully i don’t understand your math, my friend. Free-land said she was going hit the wealthy, for a little more. A little more can be a life time of work for the middle-class. A farming family for example, who feed the population, and pass on the farm to their children or the liquidated assets from the farm sale.This should be exempt from capital gains up to at least 2 million after a lifetime and generations of hard work 24/7 in many cases.
"Fairness" is a tricky thing to adjudicate when it comes to taxes but as far as tax increases go, this one is pretty clear on who it affects and who it doesn't
If you are mining crypto, that will be taxed as business income. But if you are buying crypto and selling it for a profit, that's the exact same as stocks so it will be taxed as capital gains
I don't have any personal experience with farm land so I only want to give advice on things I have expertise in. But there are many exemptions when it comes to farmland, especially if you lived on it as well as worked on it. So generally speaking, it will be taxed much less than other assets. Talk to an accountant who specializes on farm land. Good luck! =)
Why? Why ? Why would we pay $80k to the government??? We would have been maintaining and improving the house for years building equity into it. Why would we have to pay them anything??? It’s ridiculous. What happens if we die and give our children our rental house??? Why do they have to pay???
I get the frustration but by that logic, no investment income should be taxed then? Why should you pay taxes on dividends? Why should you pay taxes on interest?
Remember capital gains are by far the most favourable form of income! And you are only taxed on the PROFIT and only a portion of the profits! Versus a salary where you are taxed 100% on it
@@CanadianTShirt yes, but shopping at goodwill and never talking a vaca to buy the rental to give your children a future shouldn’t have to suffer for my sacrifice. Yes , they should look at it on a case to case basis , it’s not fair. My house will be worth more when I die and my kids get it because I held on to it and paid taxes and maintenance etc… why don’t small landlords get a tax break for creating housing????
@@CanadianTShirt I’m taxed every year on my rental, heavily because it increases my annual income ( I don’t see that money, it pays the mortgage, property tax , hydro) and then the govt is going to capital gains tax it again??? Absolutely RIDICULOUS.
As you get to the higher tax brackets, capital gains get better and better. But Canadian dividends are still taxed quite favourably, much better than regular income!
@@CanadianTShirt Ok. Ty. For some reason, I always thought dividends were taxed at a lower rate than capital gains lol. I have been carrying that concept with me for years and years haha.
I love this tax calculator for EY, you can see the tax rate of income vs dividends vs capital gains at different tax brackets =) www.eytaxcalculators.com/en/2024-personal-tax-calculator.html
But I don't expect any big drop anytime soon, I think we already experienced the market downturn since 2022 and we've been steady / slowly recovering since then
Usually find your videos informative, but this one is actually misleading. This is a death of thousand cuts. Just taking cottages, with the inflation this is equivalent of $100k threshold in 2010. Then you have all small/individual businesses such as doctors, plumbers, contractor, etc., who save for retirement in small companies as they have no other pension. Result of it will be that even more of them will move abroad, and those who stay will charge more for their services creating even more inflation. Looking at surface level and saying that this will affect only a tiny minority of just the rich is irresponsible and very misleading!
And this is just basic math. I'm sorry if you find numbers misleading... Capital gains are STILL by far the most tax efficient form of income. And remember we have had much HIGHER capital gains rates in the past. For the entire 90s, we had an inclusion rate of 75%.... way higher than today and all these businesses did NOT leave Canada then. They won't now, they're just complaining
And I'm in the exact same boat. I am self employed. I run two corporations. I don't have a pension but I understand how the tax system works. I know that investments inside a corporation have ALWAYS been taxed heavier than an individual. That's why you should NOT keep all your money in the corporation (just to try to skirt taxes) A smart plan would involve paying yourself some money to invest in your personal accounts, including the TFSA and RRSP
@@CanadianTShirt Again what you present is just surface level. Intriguing that you can do in depth analysis of 20 credit cards and keep track of which one to use for specific situations yet you don't understand and minimize the in depth répercussions and long term effects of taxes such as this.
You better do some more math on this. Your way off in understanding whats going on here. This will kill life-long Farming, small business who have created a nest egg for retirement over years and years. The Government officials make 250,000 n up( in one year), plus perks; and moreover a raise recently ; as well as having lucrative pensions in i believe 6 years of so called service. There should be no capital gains at all up to 2 million , as an example. You go after the people making 10’s and 100’s of millions per year, if Free-land , Singh and the rest are serious about taxing the. ( .013 percent at the top.) but you can bet the wealthiest will have built in loop-holes Hagd.✌️
As I said many times, even with this increase (above $250K) capital gains is still, by far, the MOST favourable type of income. So everyone including myself and including the wealthiest people in Canada will continue to invest and earn income this way
It's a more complicated situation and if you are doing a long term rental, probably not worth it since rental income is taxed MUCH worse in a corporation vs personal. The corporate strategy is usually better for flips instead
You should talk to an accountant who specializes in holding corporations. It certainly can work in certain situations but not every time. The details matter =)
But the short version is, instead of you selling the house and paying personal capital gains taxes. Your holding company would own the house and then you sell the company. That way you can claim the tax exemption. There's more to it than that but that's the strategy
"For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." - Winston Churchill.
By the way, we have had MUCH larger taxes in the past. Throughout the entire 90s decade, we had a capital gains inclusion rate of 75% Far higher than it is now, Canada seemed to survive
I really appreciate this explanation! I heard so much about the new capital gains tax on the news and from other content creators but it never was that clear until now. Thanks!
Great video, BUT just to be clear, if you make $300,000 income in Ontario, you would pay $127,000, NOT $160, 590, you don't pay 53.53% tax on the entire sum, we have a progressive tax system in Canada.
You are correct but I guess I should have made it clearer in my example. To make the math easier I said, let's assume we were already at the highest tax bracket with a salary of $250K
Then I compared what would happen if you salary increased by $300K vs an extra $300K of capital gains. So you're looking at a total income of $550K in this example, but the only relevant part is the new income in the top tax bracket. Hope that clears it up
Thanks man, I appreciate it. Honestly it's a minority but they are such a loud and vicious minority, it's sucking the joy out of this job and engaging with my community
But I guess that's 2024 for you.... years ago I would make a video saying "these are the tax brackets" and no problem. Now when I give people numbers, they get their feelings hurt and lash out 🤷♂️
@@CanadianTShirtyou explained it very well and logically. This will affect a small minority of rich Canadians. They should 😭 harder 😂😂😂😂 and why do most Canadians think Capital Gains Tax was just invented? The cognitive dissonance is shocking 😮
@CanadianTShirt Perhaps its because this Country has gone to shit because of voters like you. Or maybe you think 2 million Canadians going to food banks is a good idea. After all, socialists support bread lines. You love taxes so much you'll probably jump for joy when Trudeau and Jagmeet start taxing our Principal Residence
So if you bought $10K worth of stock and then sold it for $30K, you made a $20K capital gain. That amount is included in your tax return but only half of it, $10K is taxed as income
Hello! I love your content, it's very helpful. Question: If I make provincial political contributions in Canada (in my case, Alberta) can I get money back the way I do when I make federal political contributions? Please help!
If you actually support this government, its fiscal record, and upping of taxes instead of responsible, controlled spending, then I have zero to learn from your channel. Unsubbed.
I am JUST telling you the numbers. If the conservatives win the next election, I will do the EXACT SAME thing. Please be an adult and don't get offended by numbers and facts. These changes WILL happen, so get informed and prepare for it
So if your profit was $120K, only half of it is taxable so you would only pay tax on $60K of that income. That gets added to your taxable income for the year so the final tax bill will depend on your tax bracket. But essentially it's taxed HALF as much as your regular job =)
Thank you for those kind words! I really do appreciate it! Scrolling through some of the more unpleasant comments on here, I really wish they were a little more informed 🤷♂️
I'm not okay paying even more taxes on the money that I worked my ass off to pay for, on an already heavily taxed income. Not to mention with every single purchase made that us also subject to GST and PST depending on what province you live in. It's absolute bull.
I hear you but you're acting like capital gains tax was just invented.... it's been around since 1972 in Canada... and it was MUCH higher in the 90s as well
If you are selling a second home, I get it, you're frustrated to pay extra tax on that sale (assuming a profit above $250K) but these are the rules. We have to deal with it
Of course he wants to pay more taxes. Socialists love to redistribute wealth, except what they don't realize is eventually you always run out of other peoples money. This guy is gonna jump for joy when Jagmeet announces he will tax our principal residence. I say Jagmeet because we all know Jagmeet runs the show now.
Inheritance can get tricky since it depends on many many things. But essentially, everything that you receive will be tax-free on your end. But most of the assets of the deceased will trigger a deemed disposition, meaning they will be taxed as if they sold the assets right at their death. This tax is paid by the estate and you receive what is left. Again the amount you receive is tax free, it doesn't count as income for you
Most of the regular exemptions also apply for the estate. The big one being the principal residence. That is tax free but if they had a second property (cottage or rental property) that would be taxed as if they sold it. I hope that helps! =)
why do you say it's a down market now? housing market is still very hot now and the price is still very high. with interest rate going down, it's just gonna go up more
Oh it definitely depends on the region! Some markets are always hot, others are rather cool, even with the recent rate cut. My point was that you never want to be FORCED or pressured to sell when you're not ready!
But if it's less than $250K, then the inclusion rate remains at only 50% Meaning you take HALF of your profit and that get's taxed, at whatever tax bracket you're in
Capital gains are not always better than dividends provided by Canadian corporations. It all depends on your annual income. Question: - Would it be possible to make a video explaining how ETF dividend covered calls are tax efficient? Thanks
Eligible dividends can face negative taxation (and thus are better than capital gains) but only in the lowest tax bracket. This is very rare. For every other tax bracket, capital gains are taxed more favourably than dividends. But they are both great! =)
One of the things that is not taken into account with capital gains is that in most cases it’s not all profit. Inflation is baked into the “profit” portion, and that is why the 50% inclusion rate becomes more palatable. If you own a secondary residence like a cottage for 40 years, sure there is a different in purchase and sales value, but how much of that is inflation, how much tax should be pain on the lost value of the dollar?
💯 agree. This is especially worrying in an inflationary environment as we have seen in the last few years. Example a 3% inflation rate over 30 years equals 140% gain! That is extremely punitive to consider this a value appreciation.
Sure you ALWAYS have to keep inflation in mind when it comes with any investment or money decision, especially over years. But there's nothing special about capital gains in this regard. Inflation affects ALL forms of income equally
Whether you receive $10K in dividends or salary of capital gains, if inflation is at 3%, then that money has lost 3% of it's purchasing power over that year. Inflation isn't the reason why they're taxed differently
I don’t necessarily think capital gains is income in this regard though. If I buy something for 100k and 10 years later sell it for 150k. If inflation was 3.5% ish for those 10 years, the value of that asset in purchasing power hadn’t changed. The money out would buy the same amount of widgets that it would have 10 years prior, not real gain has happened. But now you have to pay capital gains tax on that differential value. That’s why I was always “okay with” the 50% inclusion rate as it was in my mind an acknowledgement of that fact without over complicating what the taxes should be. My thoughts anyway.
I'm still confused. :/ If I bought a house some yrs ago @ $500K and I sell @ $ 1.4 mill$ = $900K profit - $250k = $650 taxable? How much taxe$ will I end up paying? And selling a primary residence is tax free? How long do I have to reside in the primary residence? What if I sell my principal residence and take residence in the second property? What is Exemption 121? Thanks.
The ragebait was so bad on this one, even Pierre wouldn’t touch it. That being said, did you forget to read the instruction manual for your UA-cam account. I am pretty sure there is some stipulation in there that says clearly explaining the situation in a calm and concise manner is against the rules.
You're right..... My video did get flagged when I tried to upload it... I didn't have enough of a 😱 face and there weren't enough flame emojis in the thumbnail... 🔥🔥🔥
easy to call it a "Wealth tax" . Its the redefinition of what "Wealth" is now that's the Obiwan 'hand waive' in our face. Boomers had a 1,000,000 capital gains tax credit. Then I think Joe Carter dropped that to 500,000 in the late 80's or 90's. Boomers capital gains credit was an amount roughly 4x the value of their homes on average. Now, millennial home value is 4x the value of that tax credit. Complete reversal. Context !!
Well we still have over a $1 million capital gains tax exemption for business owners who open corporations. But it wouldn't make sense to give regular people giant capital gains exemptions on top of the hundreds of thousands of dollars of tax sheltered room available in their TFSA, RRSP, RESP etc
But you are right that it's important to look at the historical context of these changes! Especially over the decades! I only came to Canada in the 90s and back then, the capital gains inclusion rate was even higher than now at 75% so things certainly change over time!
What if I Sell stocks one Million and Make half a Million profit and spend all the money to buy another stock. Do I still have to pay capital gains on that half a million?
Yes you would, if you sell those stocks in a non-registered (taxable) account. If you sold a $1 Million in a tax sheltered account like a TFSA or RRSP, then no tax on that profit
But in a non-registered account once you sell a stock for a profit, you have triggered that taxable event for the year. It doesn't matter what you do with that money, whether you spend it, save it or reinvest it, you will have to pay taxes on that profit you realized
It's still very tax efficient since you get those tax deductions but no it has nothing to do with capital gains. Capital gains only happens when you SELL your rental property. Watch my TAX EXPLAINED video for more =) ua-cam.com/video/GShKBkv2xY8/v-deo.html
@humbledtraderofficial Thanks for your video as usual. I have a question If i have stocks in rrsp at institution A and want to transfer these stock to fhsa in another institution B. Can I do that? If yes. How they evaluate the stock value? The average cost price, or the current market price at the time of transfer.??
If you are transferring from RRSP at institution A to an RRSP at institution B, there's no tax involved since it's remaining inside an RRSP. And you can do an in-kind transfer, meaning you don't have to sell the assets! I go over all this in the video =)
@@CanadianTShirt I am going to watch the video. My question when transferring we should respect the room of 8000 contribution for tfsa. If we have to respect the room. At what price they evaluate the stock at the price I purchased or at the current price of the stock
Oh I WISH it was the price you purchased! No it is the current market value of the stock during the transfer. Basically it's treated the same way as if you sold the stock and transferred cash
Hi. I have a question regarding capital gains tax in BC. If I have been left my parents house in there will Is there any capital gains tax if I sell it? If so how much tax do I have to pay on the final sale price? Is it a percentage of the final price or do I have to claim this under my income tax ? Thank you for any information
One sec, if you had a cottage for 5 years and sold it for 300k more, then isnt that 60k per year? Its not like all the value came in that last year, shouldn't the gain of 60k be declared each year? Also what happens if you loose 100k on an asset, can that be used to offset the 300k?
I agree! As I've said in dozens of my previous tax videos, employment income is FULLY taxed at your highest marginal tax rate. That's why it's so important to not rely entirely on your salary. You need to start earning some investment and business income as well to get ahead =)
So, you are basically saying "invest more money in something to grow your money", then sit back and watch the gov't take even more of your money (67%) then they currently do from your employment income. Sounds like strange advise to me. I would advise putting your money into investments through a living trust fund. Look into this as the tax implications are great. Ask yourself why JT has a trust fund and you will understand.
@@rosskennedy1960 so you obviously didn't make it past 30 seconds into the video... if you did, you would learn that you are NOT taxed at 67% that is just the inclusion rate... and only above $250K in capital gains in a year. Please watch the video before you leave a comment, I thought that should go without saying 😂
Maybe you should do proper research before posting videos with ambiguous information. This should go without saying. Just because you buy into the "misinformation" does not mean that the people who actually do their research believe your spiel. You appear to simply be a liberal puppet.
Okay so my grandma passed away and apparently we have to pay tax on her rental house before we own it? Since we lived together with her in the main house that house isn’t taxed right but her rental house is taxed before it is ours?. Like how is the rental house taxed. The lawyer said once we sell it we have to pay the tax but how much is the tax?. The house was bought in 1950 and was paid of since 1969. Now it’s worth 850k.
Inheritance can get tricky since it depends on many many things. But essentially, everything that you receive will be tax-free on your end. But most of the assets of the deceased will trigger a deemed disposition, meaning they will be taxed as if they sold the assets right at their death. This tax is paid by the estate and you receive what is left. Again the amount you receive is tax free, it doesn't count as income for you
Most of the regular exemptions also apply for the estate. The big one being the principal residence. That is tax free but in your case, your grandma had a second property (rental property) that would be taxed as if they sold it
Again YOU don't pay the tax, your grandma's "estate" pays the tax and the you inherit whatever is left. You gain those assets without paying any taxes on your end
So if you chose to sell it today, you wouldn't make any capital gains. You "inherited it" for $850K and selling for about the same. No profit means no tax. But if you hold it and rent it out and then sell it years later for let's say $1 Million, then you would pay capital gains tax on the $150K worth of profit
So true, there's so much misinformation and mostly politically motivated propoganda about this. People who really deals in that kind of money wouldn't care paying a little extra in taxes.
I get that if you were about to sell a cottage, you're not happy about paying extra taxes on it now but some self-awareness is important. This is a GOOD problem to have and a fortunate position to be in
But the amount of articles and videos I've seen with blatant misinformation and rage-baiting about a 67% tax is honestly surprising... and a bunch of these posts don't even come from Canada 😅
selling stocks within a tax-free account can ABSOLUTELY affect you - just recently CRA slapped a guy with $600k tax bill for trading stocks in his TFSA, it's just a matter of how much or how often you trade.
Yes if you are day trading in a TFSA, that is NOT allowed because that is business income NOT investing. So do NOT day trade in a TFSA, you will be taxed and penalized. I talk about this in detail here in my TFSA MISTAKES video =) ua-cam.com/video/s4cBibLATOU/v-deo.html
You have an impeccable gift to explain any complicated matter in simple words so everyone can understand. Thank you, Adrian. I’m looking forward to the next video.
Yes you would immediately trigger a capital gains tax. If you sell your home that you live in to buy another one, it's tax free because of the principal residence exemption
But a cottage is a luxury / investment, so the exemption doesn't apply. If you sell a cottage to buy another one, you will be hit with a big tax if it grew in value
Please ask ALL chambers of commerce, boards of trades, professional associations and small business councils in Canada to host summits and must invite Trudeau's team of Liberals and Poilievre's team of Conservatives to be their key speakers on Capital Gain Tax increases. It's fair to hear the questions and answers from the people directly impacted by the Capital Gain Tax increases.
More News outlets should hire you. I did understand it but you did the best job at explaining it i have seen so far. Because if you ask me with the parameter they put 100 % would have been perfectly fine.
I would honestly love that! It's so frustrating how bad the government is at explaining these things to everyday people... And it's not a liberal or conservative thing, both sides suck at it... 😅
Finally we have a video and voice of reason about this capital gains change. I’ve seen way too much BS and misinformation about this… just to stir up panic and drama for views🤦♀️ thanks Adrian 🎉
Thank you Shay! I know exactly what you mean! My social media has been BOMBARDED with rage-baiting posts crying about "67% taxes in Canada..." 😱
You know better than most that in our world, fake outrage gets attention... we gotta do what we can to fight back and stick to the facts! 🙌
Hey @CanadianTShirt
I am new to your channel this year and learned a lot!
I appreciate your videos; they greatly help me grow into adulthood!
Unfortunately, this is a difficult time for everyone, and people get angry thanks to misinformation, lack of knowledge, and so much spilling out on your channel. I want you to know that your videos are great, and they improve me as a person financially each day!
Ignore all the heat and keep on doing what you are doing! 😊👍
I am only wondering how you can keep more of your money as a high-income earner.
The high-income earners' tax bracket seems high, so what are your tips?
As I grow older and try to be successful, I need to be mindful of my money.
Please let me know. I'd love to chat with you. Have a great day, Adrian! ✌️😎👍
I won't say any names, but there's some rich gentrifier spouting hate and misinformation about the subject. You have to be so careful when doing reaserch
Watch this Playlist for the MUST KNOW Changes and Info for 2024 🇨🇦
ua-cam.com/play/PLj8bU3AuW2qGLtqby707ARiDdyNZA7lTA.html
Important Changes to Tax Brackets, CPP, Carbon Tax, Tax Deductions and more!
9% increase is massive. A government who exists off taxation and has a spending problem then increases a very important vehicle of investment for Canadians by 9% and that isn’t an issue to you?
Give your head a shake if you truly feel that way. Great video, well laid out but I do not agree with you. If I reduce my level of comfort to save money, then take that money and risk it by putting it into an asset. Pay for all the maintenance, wear and tear and upkeep on said asset. Then sell it in the future, why should the government be entitled to an additional 9%?
Did I also mention that property taxes, gas, electricity and water have also all increased? So where does that taxing stop?
Absolutely correct. Most Canadians aren’t angry because of paying taxes or a rise in taxes, we are absolutely PiSSED that the money raised is squandered, mismanaged and embezzled over seas or to Liberal politicians/donors and not actual Canadians that need help now especially with preparing for retirement . If we were receiving value for what we put in, 90% of us wouldn’t be bitching even though this ONLY applies to less than 1% ……but is a start to taxing our primary house.
Disappointed in you Canadian in a Tshirt, you made this sound overly positive instead of correcting misinformation yet addressing that we are severely taxed with it not being applied properly to our elderly and youth …those that led the way and those that will come in after us currently making the system run. Shame on you
The problem is our government does not use the tax payers money effectively though. Our health case system is atrocious and we just sent $5b to Ukraine
You got that right, we NEED more accountability on government spending through all levels of government: federal, provincial and municipal. It's rare to see any progress there though
Well, people keep electing Provincial governments for some time (who decide where and how to allocate tax money within healthcare) that have made deep cuts to health spending and poor planning. That is what austerity is. 🤷♀️
I wish I had a capital gains “problem”.
I hear you buddy! 😉
I feel like people need a little bit more self-awareness when they publicly complain about paying taxes on $300K worth of profit... you'll be all right lol
@@CanadianTShirt Great video, you cleared up a lot of misrepresentations.
That's what I try to do! 🙏
Are you insane? This is UA-cam on the Internet and you are obligated to misrepresent this information. What compelled you to explain this correctly? --> Great job! You're awesome!
haha you certainly get more clicks when you rage bait... I've seen SO many posts and videos the past few weeks going ballistic on "67% Tax Rate!!!! 😱"
But even so, every time I make a tax video where I lay out the numbers, some people in the comments will lose their minds 😅
But thanks for the kind words and I'm glad you found my explanation helpful! 🙏
@@CanadianTShirt I was called a "poor" when I pointed out that only 2% of Canadians have incomes greater than $250K (yes, CG is different-ish) and the other 98% don't care about the 2%ers crocodile tears.
You will never see anyone cry online more than a rich person being "forced' to pay taxes 😅
It’s not a big deal in your example of making 300k profit on a cottage (only 50k over the exemption) but if you make 1.25 million you pay tax on 67% of a million
I’m hearing stories about doctors that are very upset who invested in a cottage many years ago which is worth a lot more now and were going to sell it for retirement
Some speculate that more doctors will leave Canada and cause even more of a doctor shortage
That's true! But again, if your investment grew to a million dollar in profits.... ya you gotta pay taxes on that. That's just the way it works
No one enjoys paying capital gains tax but remember it is still by far, the most tax favourable form of income!
Maybe it shouldn’t have been retroactive and just for new properties and/or buy/sell dated transactions?
Because in that case, said doctors should sell asap and move that money away from the country or similar.
I hear what you're saying but that would be extremely unfair and most of the population would be rightfully pissed. Basically all the younger people who don't already have accumulated large assets would pay the higher price but the older generations who have already built up, would get a tax break... I doubt that would pass
@@CanadianTShirt Favourable for whom? All money directed to personal use; wages, bonuses, and profit incentives are taxed by our government. The capital "gains tax" is not really a gain but becomes a ball and chain for a business that wants to re-invest profits to grow the company. Of course, that action makes the company worth more...another gain. I am a former business owner, retired, and I hated this tax. It is really a double taxation. Those private property investments are only worth more because their owners invested back into the property. Now they face a huge tax bill because they thought that was investing in the future. What the hell, is favourable about blind-siding these investors. Our governments are playing loose with money invested into retirement. It will soon devolve into taxing the assumed value "gained" on an investment. This will be our private homes soon today. Make the right stand and rid ourselves of this unfair double taxation.
Thank goodness somebody explained this in simple terms. So many financially illiterate people need to watch this channel.
That's what I try to do! It's been so frustrating seeing nonstop misinformation and rage-baiting about these tax changes...
These tax changes aren't super easy but the government should be doing a MUCH better job at breaking it down and communicating the facts 🤷♂
Very helpful. Thank you the well informed explanation!
I'm happy to hear that! Thank you! =)
Phew, I checked. I am safe ;-). Great video Adrian!
Thanks Candace!
Ya if you triggered a $250K capital gain this year, that would make one hell of a Blossom post 😉
Thank you, Looking forward for the corporation video
Honestly at this point, I don't really feel the desire to make another video on this topic.... I usually LOVE answering questions and engaging with everyone in the comments. But this time, a good chunk of the comments are just awful and discouraging. It really sucks but oh well, welcome to 2024 I guess 🤷♂️
@@CanadianTShirt please don't stop making videos! You're always a balanced and trustworthy source of information, and I deeply appreciate the work and education you provide! I'm personally interested in how it will affect doctors who are professionally incorporated like myself. I can't believe that people are being so hateful online... please don't let it affect you, it's a small but loud minority.
Thank you I appreciate those kind words! And don't worry, I absolutely WILL continue to make tax videos! I just miss the days when I would present numbers and people would learn and listen. Now it seems like 20% of people get personally offended and lash out when I say "this is the tax rate at this tax bracket..." 🤷♂️
Thanks for another great video
My pleasure! I'm glad you found it helpful! =)
Bottom line... too many taxes!
I hear you but remember these taxes aren't new. Capital Gains tax has been around since 1972 and we've seen it much higher in the past, it had an inclusion rate of 75% throughout the 90s!
But yes I hear you, it is definitely frustrating if you are now forced to pay this higher tax unexpectedly. That's why it's SO important to keep informed and come up with a plan to minimize your tax bill and make the most of your money!
@@CanadianTShirt oh wow I actually did not know capital gains was higher in the past. Thank you for the insight. Like and subscribe!
Ya it's been a rollercoaster when you look through the history. Basically every decade or so, they do a massive shift in capital gains. For us, we've had no changes for the past 24 years until now
And at least, they are "softening" the blow by only changing above the $250K threshold. In previous decades, they didn't have that and it was a massive and sudden change
Very nice explanation Adrian! I do not have Capital Gains Tax syndrome for now. I might have may be in the future!
I'm happy to help! And again don't worry! Selling an asset for a large profit, that's a GOOD problem to have! 😉
Thank you very much for the video. Does this affect residents and non-residents alike? Specifically a non-resident holding shares in a Canadian Corporation that pays dividends quarterly
If you live in Canada and are a taxable resident, then you pay the same Canadian taxes on your investment. It doesn't matter if you're a citizen or PR
If you live in another country, then it gets more complicated and it depends on which country since we have different tax treaties with each
@@CanadianTShirt I live in Trinidad &Tobago
As always super clear and nothing but facts. Thanks buddy.
I appreciate that Bruce! That's what I try to do! 🙏
thank you great info. What about a small farmer who wants to sell his land not incorporated. capital gains would be over 400k same rules apply ?
It gets much trickier with farm properties, especially if you lived on it as well! Since it's your residence plus your business. I'm not an expert in this regard but there are several exemptions when it comes to farmland. I would suggest talking to an accountant who specializes in farm land. Good luck! =)
Thank you for your fantastic explanation. Was confused about $250,000
You're not alone! A ton of people are confused by this new change and frankly, the government has done an awful job of spelling it out. That's what I try to do! =)
@@CanadianTShirt I wish, as a former Canadian and US tax accountant, it is appalling the very large amount of Canadians who have no idea about their income, investments, etc. or who think Capital Gains tax is new! Or that most Canadians will never have this apply to them! 😮 I really believe that people need to take personal responsibility to learn and understand the minimum amount about western economies and how capitalism works/economics/taxation. 😊 cheers!
It is very frustrating and I wish the government did a better job of spelling this out, instead misinformation and rage-baiting has taken over the public narrative. But thank you for being so engaged and leaving so many comments! And keeping it respectful! 🙏
Excellent level-headed summary, Adrian. Instead of being sucked into rage-bait, people need to realize that the tax burden has increasingly been pushed onto the shoulders of the middle class over the last 40+ years. This tax change is a pretty mediocre attempt at reversing that trend. This won't affect the vast majority of people who are acting so outraged.
I appreciate those kind words, it has been very frustrating seeing so much insincere, fake outrage over this... and sadly so many people fall for it... You should NEVER blindly believe anything you see online (including my videos!) You should always double check these numbers for yourself
I learned so much from this video. Thanks you 😊
I'm so happy to hear that! Thank you for those kind words! 🙏
It seems to me that it would be more fair to allow you amortize the gain by the number of years you opened the asset? That way, a family that has owned property for many years could more easily transfer it to their children without having to come up with some way to pay the tax all in one year while still curbing speculation.
That is an interesting idea but I don't see that ever happening, realistically...
So you buy a cottage 50 years ago for $40,000 the value increases by 400% so now you are taxed on $120,000?
I think the problem people have is the fact our government is mismanaging tax funds. There seems to be no accountability, restraint or even review of how funds are allocated. You don’t give booze to an alcoholic. You offer to those that drink responsibly.
People have always complained about how the govt spends money. Usually when they spend money on things you are against!
That is true and we should demand more accountability across all levels of government, federal, provincial and municipal. But that doesn't mean that we just sit on our hands and do nothing. The government should continue to propose new legislation (like this) AND work on more transparency and accountability. Unfortunately, I don't see much progress on that front, from any political party
I have some concerns about the increase taxes. The corporations will need to recoup their losses and the price of that is reflected in goods. That and the fact liberals have a big spending problem is worrisome. I fail to see how adding additional taxes in the current economy helps Canadians in the long run.
Oh you're not increasing the tax rate on corporate income! Corporate income is still taxed SUPER low in Canada (among the lowest in the world) This change only affects capital gains so investments in a corporation. And most corporations do NOT invest, literally only 12% of corporations have capital gains
For me, my concerns mainly stem with the disruption of tax integration for corporations. That's something that will need to get addressed
@@CanadianTShirt will that cause share prices to drop then?
It really shouldn't because the vast majority of a corporation's income does NOT come from capital gains. It comes from business income (actually selling a product or service) And that is not affected at all
@@CanadianTShirt thanks for the info. It would be nice though if the cost of goods went back to normal
There is also tax deduction if you work over the salary you are suppose to make which is 🤮
Well ya, any income you earn is taxed. So if you receive a bonus or you work overtime and thus you earn above your regular salary, that income will get taxed the same as regular income
What about the ones who inherit a home through an inheritance...many cases more then one person.. and want to sell? Cant find anyone mentioning this.
Wouldn't matter how you got it , it is under your name
@@Reza19691348 not sure about that one because in many cases there is more then one inheriting a property they want to sell. And one of them may not own any property but selling it. Many scenarios.
@@Reza19691348 not sure about that one..more then one person can inherit property they want to sell and many cases one of them never owned any property but wanting to sell..many scenarios and not that straight forward I'm assuming.
Inheritance can get tricky since it depends on many many things. But essentially, everything that you receive will be tax-free on your end. But most of the assets of the deceased will trigger a deemed disposition, meaning they will be taxed as if they sold the assets right at their death. This tax is paid by the estate and you receive what is left. Again the amount you receive is tax free, it doesn't count as income for you
Most of the regular exemptions also apply for the estate. The big one being the principal residence. That is tax free but if they had a second property (cottage or rental property) that would be taxed as if they sold it. I hope that helps! =)
Getting taxed 53.53% is madness!!!
Yes that's the highest marginal tax rate in Ontario. That's why it's so important to earn other sources of income besides your job!
so the taxable gain is added to the marginal tax rate bracket plus whatever is there remaining from the income in that bracket and then taxed?
No.
Watch my example where I break down how much of the capital gain is taxable. If you sell a second house and make a profit of $300K, first you take $250K and half of that is taxable ($125K) then your remaining $50K, 2/3 of that is taxable so $33K. So in total, your taxable income on that sale will be $158K
So that $158K plus your salary and any other income will fill up the tax brackets (each bracket will be taxed at that given rate) In my example, I made the math simpler by assuming you were already at the highest tax bracket. I hope that helps!
Thank you SO much for this video. I’ve seen so many people either legitimately misinterpreting the new rules or purposefully twisting it to make it sound worse than it actually is, just for political reasons. You explain it all brilliantly. 👏
It is incredibly frustrating when you see so much blatant misinformation or disingenuous trying to stir up outrage... let's stick to truth and solve real problems rather then get riled up over fiction
Great job explaining something than the people who created it.
That's what I try to do! It's been so frustrating seeing all the misinformation the past few weeks but the government is equally responsible... They are so bad at explaining these things to everyday people...
What about for medical corporations?
Has anything changed for medical corporations?
I just started practicing and just opened a medical corporation
I just started investing with corporation at the start of this year.
@@epictetus3406everybody gets taxed on their retirement in Canada if they have an rsp. Doctors are seriously in the 1% and their ability to earn is far greater than 99% of Canadians. As is their ability to shelter from tax. Fact.
Sorry I can't see the full discussion, I think UA-cam flagged some of the comments but yes if a doctor is incorporated, they are already benefiting from massive tax savings on their incomes. Instead of paying 45% or higher on their income, they literally pay only 12% BUT the downside is that investments are taxed much heavier in a corporation than personal. That is nothing new, it's always been that way
So if doctors want to incorporate, yes they can get all those benefits but they also have to deal with the downsides. You can't have it both ways. Instead they should plan it out better, take some money out of the corporation and invest on the personal side with their TFSA and RRSP etc. That's what I do and like you said, once you have a corporation (or even multiple ones) you have so many options available at you. Versus a regular employee who has no options, 100% of their income is fully taxed with no way around it
I'm not sure. I thought the black specs were a good look. Another informative vid, very clear!
I'll bring the glasses back once in a while! I like to mix it up! But don't worry the T-Shirts will ALWAYS remain 😎
But it's actually easier to film without glasses. I don't have to worry about glare being reflected off the lenses 😅
@@CanadianTShirt Well T-shirt is in the title! I thought you had laser correction though? Could use frames with no lenses - haha! Btw, I saw an eye-opening vid from Adriano yesterday about different tax rates. I had no idea interest was 50%! I'm very cautious but forget that, now waiting for 2 GIC to mature and then moving everything into high yield ETFs.
@@danderson5084 yes I have the same glasses but with fake lenses (just plain glass) so now it's just a fashion piece haha
@@danderson5084 and yes interest income (savings, GICs, etc) is FULLY taxed. It's treated the same as employment income so it's taxed the worst! Dividends are taxed better (Canadian dividend even more so) and then capital gains are the best =)
So I take the risk of a large mortgage, risk bad tenents, risk high interest rates, cover costs that rent does not, and save what little I have to bring down the principal with a yearly payment, all with money that has already been taxed. Then, after taking all the risk and financial hardship, the gov't comes in to take a cut of the profit. Make it make sense.
I am a landlord and yes, that's part of the job. It comes with risks and expenses. And yes you are STILL well rewarded for that risk with very tax-favourable rates
And remember, you do NOT have to sell, no one is making you! These capital gains ONLY apply if you sell for a profit. If what you're describing is true and your rental income is less than your expenses then you are operating at a loss so you are NOT paying any taxes!
In fact, you are likely REDUCING your taxes from your regular job so I'm not sure what you're complaining about... you're literally getting free money from the government 🤷♂️
Why is the government entitled to more of my gain then me? Are you insane? Do you have a degree in propaganda?
I have a mathematical physics degree... but I guess numbers count as propaganda in 2024.... 🤷♂️
I've been delaying instant gratification by saving since childhood. I don't think my time should be taxed. No handouts here (including nepotism for jobs, a business or lucrative know how and tools, car etc.) or inheritance either (different story if that is the source of your wealth in my mind) I still have decades to be invested... taxes will likely be even higher then. Brutal.
Hi. If you sell a home for more than 500,000 would this affect your marginal rate? I am a low income earner -40,000 and trying to understand what the marginal rate would be for BC if I sold a rental property. Thanks.
I think it affects your low income status for that year which can affect your meds and such
Yes, look at my example and the TAXABLE INCOME portion of that profit would be added to your salary and other forms of taxable income. That WILL put you in a higher tax bracket, likely the top tax bracket even with a low income (just for the one year)
So you have a salary of $40K and you sold a house with a profit of $500K. Your first $250K of profit, only half is taxed as income. So that's $125K of taxable income. The remaining $250K will be 2/3 taxable so $167. So in total, your taxable income for the year would be very large: $40K + $125K + $167K = $332K That puts you in the top tax bracket in every province
But again this is only for that one year when you sold the property. Next year, you would return to the lower tax bracket of $40K or whatever your income is at that point. I hope that helps! =)
@@CanadianTShirt yes but for example. My meds cost over 10k a year. My province out of pocket maximum is 10k. So I would loose 10k automatically plus 20k in child subsidies
Excellent video
Thank you! =)
So i cant buy mulitppe properties now. Sucks
You absolutely can, I do! I own two rental properties now. This tax change does NOT affect your rental income at all
But years (or decades) down the line when I eventually sell (for a significant profit) yes I will pay capital gains tax on that
Investing in real estate is STILL one of the best investments you can make. And yes even with this change, it is still one of the most tax favourable forms of income! Don't let anyone discourage you
You should compare investing in usa vs canada. I would buy a property in usa now
That's a great idea but I have no personal experience with investing in US real estate. I only want to make videos on things I have expertise in =)
Insider trading just got more expensive.
hahaha as if they ever get caught 😉
June 25th... is it? the law has yet to be updated... so maybe not. If you believe it is going up, I disagree that you should hold out for long term... look at your short term needs, or if you are retired and have good estate, you may want to look at paying the gains tax now at the lower rate, rather than your estate paying the higher rate in the future.
It's officially passed, it's happening. Obviously you have to do a deep dive into your personal situation, financial goals, time horizons all that stuff. But generally speaking, if you weren't planning on selling any time soon, I would not advice you to panic and rush and sell in a hurry to beat the deadline. Selling is a big deal, do it on your terms =)
Reply to Canadian in a tee-shirt. I never said to million per year in capital gains , i said 2 million after a ( life time of work ) , farmers, small business ect, ( that when they sell or pass on their property to their children should be exempt from Capital Gains ; moreover at least 2 million for a one time exemption, on property , investments, ect.,, then 5o percent capital gains added to your income which sets your tax income for the year.
The middle -class are not making 2 million per year, the wealthiest are making fatr more
Respectfully i don’t understand your math, my friend.
Free-land said she was going hit the wealthy, for a little more. A little more can be a life time of work for the middle-class. A farming family for example, who feed the population, and pass on the farm to their children or the liquidated assets from the farm sale.This should be exempt from capital gains up to at least 2 million after a lifetime and generations of hard work 24/7 in many cases.
The idea that this higher tax is for ‘fairness’ is BS.
I get that if you're selling a cottage or rental property, this extra tax is frustrating, again on amounts above $250K
"Fairness" is a tricky thing to adjudicate when it comes to taxes but as far as tax increases go, this one is pretty clear on who it affects and who it doesn't
It is extremely fair! And will affect a very small amount of people per capita.
@@Dee-JayW The small amount doesn’t constitute fairness, in itself.
what about crypto gains? there is an expectation that by the end of 2025 crypto some crypto investors will have 250 + profit after the bull run
Word of advice.. keep your crypto outside of Canada. This government is full of crooks and would do everything to make you pay
If you are mining crypto, that will be taxed as business income. But if you are buying crypto and selling it for a profit, that's the exact same as stocks so it will be taxed as capital gains
So yes if you were lucky enough to make a profit of $250K then just be strategic and spread it out! Don't sell it all in one year!
What if you live on a farm or acerage, aren't you taxed capital gains on land over a couple acres?
Yep. And farmers are not wealthy people, they just hold land. This is how the land grab works. UNDRIP.
I don't have any personal experience with farm land so I only want to give advice on things I have expertise in. But there are many exemptions when it comes to farmland, especially if you lived on it as well as worked on it. So generally speaking, it will be taxed much less than other assets. Talk to an accountant who specializes on farm land. Good luck! =)
Why? Why ? Why would we pay $80k to the government??? We would have been maintaining and improving the house for years building equity into it. Why would we have to pay them anything??? It’s ridiculous. What happens if we die and give our children our rental house??? Why do they have to pay???
I get the frustration but by that logic, no investment income should be taxed then? Why should you pay taxes on dividends? Why should you pay taxes on interest?
Remember capital gains are by far the most favourable form of income! And you are only taxed on the PROFIT and only a portion of the profits! Versus a salary where you are taxed 100% on it
@@CanadianTShirt do I pay property tax and land transfer tax on dividends???
@@CanadianTShirt yes, but shopping at goodwill and never talking a vaca to buy the rental to give your children a future shouldn’t have to suffer for my sacrifice. Yes , they should look at it on a case to case basis , it’s not fair. My house will be worth more when I die and my kids get it because I held on to it and paid taxes and maintenance etc… why don’t small landlords get a tax break for creating housing????
@@CanadianTShirt I’m taxed every year on my rental, heavily because it increases my annual income ( I don’t see that money, it pays the mortgage, property tax , hydro) and then the govt is going to capital gains tax it again??? Absolutely RIDICULOUS.
Are capital gains taxed higher than dividends?
Nope! Capital gains are the most tax efficient form of income, even better than Canadian dividends!
The only case where dividends are actually taxed better are in the lowest tax bracket. But this is very rare
As you get to the higher tax brackets, capital gains get better and better. But Canadian dividends are still taxed quite favourably, much better than regular income!
@@CanadianTShirt Ok. Ty. For some reason, I always thought dividends were taxed at a lower rate than capital gains lol. I have been carrying that concept with me for years and years haha.
I love this tax calculator for EY, you can see the tax rate of income vs dividends vs capital gains at different tax brackets =)
www.eytaxcalculators.com/en/2024-personal-tax-calculator.html
Capital gain tax is stupid. Shouldn’t be a thing
I get no one likes paying taxes on their profits but this is nothing new... we've had this tax since 1972
Is a market crash / recession coming to Canada?
There will ALWAYS be another crash and recession. That's part of the game, historically it occurs every decade or so. It's a question of when not if
But I don't expect any big drop anytime soon, I think we already experienced the market downturn since 2022 and we've been steady / slowly recovering since then
Thank you for the reply Sir, much appreciated. 👍
Happy to help! =)
Usually find your videos informative, but this one is actually misleading.
This is a death of thousand cuts. Just taking cottages, with the inflation this is equivalent of $100k threshold in 2010. Then you have all small/individual businesses such as doctors, plumbers, contractor, etc., who save for retirement in small companies as they have no other pension. Result of it will be that even more of them will move abroad, and those who stay will charge more for their services creating even more inflation.
Looking at surface level and saying that this will affect only a tiny minority of just the rich is irresponsible and very misleading!
Please watch the entire video first... I address most of those points...
And this is just basic math. I'm sorry if you find numbers misleading... Capital gains are STILL by far the most tax efficient form of income. And remember we have had much HIGHER capital gains rates in the past. For the entire 90s, we had an inclusion rate of 75%.... way higher than today and all these businesses did NOT leave Canada then. They won't now, they're just complaining
And I'm in the exact same boat. I am self employed. I run two corporations. I don't have a pension but I understand how the tax system works. I know that investments inside a corporation have ALWAYS been taxed heavier than an individual. That's why you should NOT keep all your money in the corporation (just to try to skirt taxes) A smart plan would involve paying yourself some money to invest in your personal accounts, including the TFSA and RRSP
@@CanadianTShirt Again what you present is just surface level. Intriguing that you can do in depth analysis of 20 credit cards and keep track of which one to use for specific situations yet you don't understand and minimize the in depth répercussions and long term effects of taxes such as this.
Hes a liberal
You better do some more math on this. Your way off in understanding whats going on here. This will kill life-long Farming, small business who have created a nest egg for retirement over years and years. The Government officials make 250,000 n up( in one year), plus perks; and moreover a raise recently ; as well as having lucrative pensions in i believe 6 years of so called service.
There should be no capital gains at all up to 2 million , as an example. You go after the people making 10’s and 100’s of millions per year, if Free-land , Singh and the rest are serious about taxing the. ( .013 percent at the top.) but you can bet the wealthiest will have built in loop-holes
Hagd.✌️
I'm sorry but what? You want people to make $2 million a year in capital gains before they pay a dollar in taxes?....
That literally only benefits the very richest people in the country.... I don't think that's going to be popular with the Canadian people
As I said many times, even with this increase (above $250K) capital gains is still, by far, the MOST favourable type of income. So everyone including myself and including the wealthiest people in Canada will continue to invest and earn income this way
Uh oh, I am screwed.
Ouch... are you planning on selling a second property this year?
I hope you don't mind sharing, I'm genuinely curious when people trigger this new inclusion rate
@@CanadianTShirt
No, my own home.
@@CanadianTShirt
My property exceeds the assessment by more than $300,000 per market-value. Seems I fall into that category.
Don't worry! If you sell your principal residence, it is TAX FREE!
Anyone that already pays taxes on everything and is happy about this is the most f'ed person ever...
No one is "happy about it" I'm just telling you the rules. These changes WILL happen in 2 weeks, so prepare for it
Can I make a rental a business to get the capital gain exemption
It's a more complicated situation and if you are doing a long term rental, probably not worth it since rental income is taxed MUCH worse in a corporation vs personal. The corporate strategy is usually better for flips instead
You should talk to an accountant who specializes in holding corporations. It certainly can work in certain situations but not every time. The details matter =)
But the short version is, instead of you selling the house and paying personal capital gains taxes. Your holding company would own the house and then you sell the company. That way you can claim the tax exemption. There's more to it than that but that's the strategy
Give Cesar what belongs to Cesar!
Leave Jesus out of this…the government is only lining their pockets and wasting our money. They do not care about the common good.
hahaha you get points for a Roman reference. If you take a look at the old computer games behind me, you can see that I'm a fan 😉
way to prevent us from been wealth Trudeau.
Bud, please as I said in the first 30 seconds "stick to facts, leave the politics out"
If you don't like it, fine! Then vote against it! But get informed and learn the facts, that's all I'm trying to do here 🤷♂️
How does this prevent you from gaining some wealth?
As I said many times in the video, even if you are above the $250K threshold, capital gains is STILL the most favourable form of income, by far
@@CanadianTShirtso these tax changes have nothing to do with politics? 😢
The communist in a t shirt
I'm sorry to hear this from you, after you've been a loyal subscriber for 3 years... 😕
But I was born in a communist country. Don't throw that word around if you don't know what it means
@CanadianTShirt dont worry im sticking around. Your videos are informative
I appreciate that! 🙏
"For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." - Winston Churchill.
Right... it's almost like the world economy has changed since 1940.... 🤷♂
By the way, we have had MUCH larger taxes in the past. Throughout the entire 90s decade, we had a capital gains inclusion rate of 75% Far higher than it is now, Canada seemed to survive
that's true... tax evasion has been a huge problem for decades
Umm... but how do you expect to have a successful UA-cam channel with a rational voice and no fear mongering in this day and age?
I wish you told me this sooner! 😂 I would have changed the thumbnail to a 😱 face and lots of fire in the background 🔥
I really appreciate this explanation! I heard so much about the new capital gains tax on the news and from other content creators but it never was that clear until now. Thanks!
Thanks buddy! I know there's been a ton of misinformation on this topic but I'm glad I was able to break it down for you! 🙏
Great video, BUT just to be clear, if you make $300,000 income in Ontario, you would pay $127,000, NOT $160, 590, you don't pay 53.53% tax on the entire sum, we have a progressive tax system in Canada.
You are correct but I guess I should have made it clearer in my example. To make the math easier I said, let's assume we were already at the highest tax bracket with a salary of $250K
Then I compared what would happen if you salary increased by $300K vs an extra $300K of capital gains. So you're looking at a total income of $550K in this example, but the only relevant part is the new income in the top tax bracket. Hope that clears it up
I'm sorry you're receiving some hate for this video. I've learned quite a bit from them. Keep creating!
Thanks man, I appreciate it. Honestly it's a minority but they are such a loud and vicious minority, it's sucking the joy out of this job and engaging with my community
But I guess that's 2024 for you.... years ago I would make a video saying "these are the tax brackets" and no problem. Now when I give people numbers, they get their feelings hurt and lash out 🤷♂️
@@CanadianTShirtyou explained it very well and logically. This will affect a small minority of rich Canadians. They should 😭 harder 😂😂😂😂 and why do most Canadians think Capital Gains Tax was just invented? The cognitive dissonance is shocking 😮
@CanadianTShirt Perhaps its because this Country has gone to shit because of voters like you. Or maybe you think 2 million Canadians going to food banks is a good idea. After all, socialists support bread lines. You love taxes so much you'll probably jump for joy when Trudeau and Jagmeet start taxing our Principal Residence
But if you buy a preconstruction home for 800,000 can you turn around and sell it for 800,000 was there a capital gain and if so, what am I taxed?
You are only ever taxed on the PROFIT! So if you sell for the same price you bought it for, you made zero profit and thus zero tax
Thanks so much Adrian. Very good explanation,
I'm happy to hear that! And thanks for sticking with me over all these years! 😊
If you do not have a job, how are the capital gains from your investments calculated? Is it calculated as annual income or just capital gains?
You file your capital gains that you earned in your non-registered account when you file your tax return
So if you bought $10K worth of stock and then sold it for $30K, you made a $20K capital gain. That amount is included in your tax return but only half of it, $10K is taxed as income
If you made above $250K in capital gains, then the new inclusion rate kicks in
Hello! I love your content, it's very helpful.
Question: If I make provincial political contributions in Canada (in my case, Alberta) can I get money back the way I do when I make federal political contributions? Please help!
I don't live in Alberta so I'm not an expert there but yes, most provinces offer a provincial tax credit if you make a political donation!
Check with the rules and limits in Alberta, they will be different than Ontario =)
And thanks for the kind words! 🙏
If you actually support this government, its fiscal record, and upping of taxes instead of responsible, controlled spending, then I have zero to learn from your channel. Unsubbed.
Buddy... literally the first 30 seconds what did I say? "we're going to stick to facts and numbers, leave the politics out of it"
I am JUST telling you the numbers. If the conservatives win the next election, I will do the EXACT SAME thing. Please be an adult and don't get offended by numbers and facts. These changes WILL happen, so get informed and prepare for it
If we sell investment property and earn a profit of around 120k CAD, will I be taxed and how much?
So if your profit is $120K, then you will be unaffected by these changes (they only kick in above $250K)
So if your profit was $120K, only half of it is taxable so you would only pay tax on $60K of that income. That gets added to your taxable income for the year so the final tax bill will depend on your tax bracket. But essentially it's taxed HALF as much as your regular job =)
Great video, too bad more Canadians can’t subscribe and get better informed.
Thank you for those kind words! I really do appreciate it! Scrolling through some of the more unpleasant comments on here, I really wish they were a little more informed 🤷♂️
And thank you so much Michele for supporting my channel with your membership! I'm loving that badge next to your name 😎
I'm not okay paying even more taxes on the money that I worked my ass off to pay for, on an already heavily taxed income. Not to mention with every single purchase made that us also subject to GST and PST depending on what province you live in. It's absolute bull.
I hear you but you're acting like capital gains tax was just invented.... it's been around since 1972 in Canada... and it was MUCH higher in the 90s as well
If you are selling a second home, I get it, you're frustrated to pay extra tax on that sale (assuming a profit above $250K) but these are the rules. We have to deal with it
You lost me when you said "I'm okay with paying more in taxes"...
When I sell a rental property and earn a profit above $250,000.... not a bad problem to have 😉
Of course he wants to pay more taxes. Socialists love to redistribute wealth, except what they don't realize is eventually you always run out of other peoples money. This guy is gonna jump for joy when Jagmeet announces he will tax our principal residence. I say Jagmeet because we all know Jagmeet runs the show now.
Right! Still, no one should have to keep paying more to satisfy bad spending habits.
How does it affect inheritance?
Inheritance can get tricky since it depends on many many things. But essentially, everything that you receive will be tax-free on your end. But most of the assets of the deceased will trigger a deemed disposition, meaning they will be taxed as if they sold the assets right at their death. This tax is paid by the estate and you receive what is left. Again the amount you receive is tax free, it doesn't count as income for you
Most of the regular exemptions also apply for the estate. The big one being the principal residence. That is tax free but if they had a second property (cottage or rental property) that would be taxed as if they sold it. I hope that helps! =)
why do you say it's a down market now? housing market is still very hot now and the price is still very high. with interest rate going down, it's just gonna go up more
Oh it definitely depends on the region! Some markets are always hot, others are rather cool, even with the recent rate cut. My point was that you never want to be FORCED or pressured to sell when you're not ready!
Selling an investment property is a HUGE decision! Make sure you do it on YOUR terms. Not because of outside pressure =)
so how much tax will they take if say your captial gains was less than 250k?
Make sure you watch the whole video including the example. I compare before and after the changes
But if it's less than $250K, then the inclusion rate remains at only 50% Meaning you take HALF of your profit and that get's taxed, at whatever tax bracket you're in
Capital gains are not always better than dividends provided by Canadian corporations. It all depends on your annual income. Question: - Would it be possible to make a video explaining how ETF dividend covered calls are tax efficient? Thanks
Eligible dividends can face negative taxation (and thus are better than capital gains) but only in the lowest tax bracket. This is very rare. For every other tax bracket, capital gains are taxed more favourably than dividends. But they are both great! =)
One of the things that is not taken into account with capital gains is that in most cases it’s not all profit. Inflation is baked into the “profit” portion, and that is why the 50% inclusion rate becomes more palatable.
If you own a secondary residence like a cottage for 40 years, sure there is a different in purchase and sales value, but how much of that is inflation, how much tax should be pain on the lost value of the dollar?
Exactly
💯 agree. This is especially worrying in an inflationary environment as we have seen in the last few years. Example a 3% inflation rate over 30 years equals 140% gain! That is extremely punitive to consider this a value appreciation.
Sure you ALWAYS have to keep inflation in mind when it comes with any investment or money decision, especially over years. But there's nothing special about capital gains in this regard. Inflation affects ALL forms of income equally
Whether you receive $10K in dividends or salary of capital gains, if inflation is at 3%, then that money has lost 3% of it's purchasing power over that year. Inflation isn't the reason why they're taxed differently
I don’t necessarily think capital gains is income in this regard though. If I buy something for 100k and 10 years later sell it for 150k. If inflation was 3.5% ish for those 10 years, the value of that asset in purchasing power hadn’t changed. The money out would buy the same amount of widgets that it would have 10 years prior, not real gain has happened.
But now you have to pay capital gains tax on that differential value.
That’s why I was always “okay with” the 50% inclusion rate as it was in my mind an acknowledgement of that fact without over complicating what the taxes should be.
My thoughts anyway.
Had to share this video today since misinformation is still ongoing!
Thank you so much for sharing! It's so frustrating how much blatant misinformation is out there.....
Even big publications or content creators, they're not even doing a simple Google search to double check before they post...
Hey, I really appreciate this clear rundown.
Thank you! I am glad that you found it helpful! =)
And I can see that you've been a subscriber for over 4 years! That is honestly INCREDIBLE! Thank you so much for sticking with me for all this time! 🙏
Hey, Can you recommend financial advisor for us ordinary low income people so be we can be financially smart. Thank you so much
I'm still confused. :/ If I bought a house some yrs ago @ $500K and I sell @ $ 1.4 mill$ = $900K profit - $250k = $650 taxable? How much taxe$ will I end up paying? And selling a primary residence is tax free? How long do I have to reside in the primary residence? What if I sell my principal residence and take residence in the second property? What is Exemption 121? Thanks.
The ragebait was so bad on this one, even Pierre wouldn’t touch it. That being said, did you forget to read the instruction manual for your UA-cam account. I am pretty sure there is some stipulation in there that says clearly explaining the situation in a calm and concise manner is against the rules.
You're right..... My video did get flagged when I tried to upload it... I didn't have enough of a 😱 face and there weren't enough flame emojis in the thumbnail... 🔥🔥🔥
Next time, I will do better. I promise 😉
easy to call it a "Wealth tax" . Its the redefinition of what "Wealth" is now that's the Obiwan 'hand waive' in our face. Boomers had a 1,000,000 capital gains tax credit. Then I think Joe Carter dropped that to 500,000 in the late 80's or 90's. Boomers capital gains credit was an amount roughly 4x the value of their homes on average. Now, millennial home value is 4x the value of that tax credit. Complete reversal. Context !!
Well we still have over a $1 million capital gains tax exemption for business owners who open corporations. But it wouldn't make sense to give regular people giant capital gains exemptions on top of the hundreds of thousands of dollars of tax sheltered room available in their TFSA, RRSP, RESP etc
But you are right that it's important to look at the historical context of these changes! Especially over the decades! I only came to Canada in the 90s and back then, the capital gains inclusion rate was even higher than now at 75% so things certainly change over time!
What if I Sell stocks one Million and
Make half a Million profit and spend all the money to buy another stock. Do I still have to pay capital gains on that half a million?
Yes you would, if you sell those stocks in a non-registered (taxable) account. If you sold a $1 Million in a tax sheltered account like a TFSA or RRSP, then no tax on that profit
But in a non-registered account once you sell a stock for a profit, you have triggered that taxable event for the year. It doesn't matter what you do with that money, whether you spend it, save it or reinvest it, you will have to pay taxes on that profit you realized
Love your explations. Short, simple and clear.
Thank you so much! That's what I try to do! =)
Do you pay capital gains if you rent out your home?
Nope! That's rental income, which is taxed essentially as business income. You're taxed on the NET income (revenue minus expenses)
It's still very tax efficient since you get those tax deductions but no it has nothing to do with capital gains. Capital gains only happens when you SELL your rental property. Watch my TAX EXPLAINED video for more =)
ua-cam.com/video/GShKBkv2xY8/v-deo.html
@humbledtraderofficial Thanks for your video as usual.
I have a question
If i have stocks in rrsp at institution A and want to transfer these stock to fhsa in another institution B.
Can I do that?
If yes.
How they evaluate the stock value?
The average cost price, or the current market price at the time of transfer.??
I have a WHOLE video tutorial showing you step by step how it's done! =)
ua-cam.com/video/Bf1zufNlQSk/v-deo.html
If you are transferring from RRSP at institution A to an RRSP at institution B, there's no tax involved since it's remaining inside an RRSP. And you can do an in-kind transfer, meaning you don't have to sell the assets! I go over all this in the video =)
@@CanadianTShirt I am going to watch the video.
My question when transferring we should respect the room of 8000 contribution for tfsa.
If we have to respect the room. At what price they evaluate the stock at the price I purchased or at the current price of the stock
Oh I WISH it was the price you purchased! No it is the current market value of the stock during the transfer. Basically it's treated the same way as if you sold the stock and transferred cash
Hi. I have a question regarding capital gains tax in BC. If I have been left my parents house in there will Is there any capital gains tax if I sell it? If so how much tax do I have to pay on the final sale price? Is it a percentage of the final price or do I have to claim this under my income tax ? Thank you for any information
One sec, if you had a cottage for 5 years and sold it for 300k more, then isnt that 60k per year? Its not like all the value came in that last year, shouldn't the gain of 60k be declared each year? Also what happens if you loose 100k on an asset, can that be used to offset the 300k?
THE GUY WITH $250k income is already paying double the income tax, 53.53% vs a guy with $40k income paying 24%.
I agree! As I've said in dozens of my previous tax videos, employment income is FULLY taxed at your highest marginal tax rate. That's why it's so important to not rely entirely on your salary. You need to start earning some investment and business income as well to get ahead =)
So, you are basically saying "invest more money in something to grow your money", then sit back and watch the gov't take even more of your money (67%) then they currently do from your employment income.
Sounds like strange advise to me. I would advise putting your money into investments through a living trust fund. Look into this as the tax implications are great. Ask yourself why JT has a trust fund and you will understand.
@@rosskennedy1960 so you obviously didn't make it past 30 seconds into the video... if you did, you would learn that you are NOT taxed at 67% that is just the inclusion rate... and only above $250K in capital gains in a year. Please watch the video before you leave a comment, I thought that should go without saying 😂
Maybe you should do proper research before posting videos with ambiguous information. This should go without saying.
Just because you buy into the "misinformation" does not mean that the people who actually do their research believe your spiel.
You appear to simply be a liberal puppet.
Thanks , I like your Explanation very well.
Thank you! I really appreciate that! 🙏
And thank you for supporting me with your membership! You're a gem! 💎
Okay so my grandma passed away and apparently we have to pay tax on her rental house before we own it? Since we lived together with her in the main house that house isn’t taxed right but her rental house is taxed before it is ours?. Like how is the rental house taxed. The lawyer said once we sell it we have to pay the tax but how much is the tax?. The house was bought in 1950 and was paid of since 1969. Now it’s worth 850k.
Inheritance can get tricky since it depends on many many things. But essentially, everything that you receive will be tax-free on your end. But most of the assets of the deceased will trigger a deemed disposition, meaning they will be taxed as if they sold the assets right at their death. This tax is paid by the estate and you receive what is left. Again the amount you receive is tax free, it doesn't count as income for you
Most of the regular exemptions also apply for the estate. The big one being the principal residence. That is tax free but in your case, your grandma had a second property (rental property) that would be taxed as if they sold it
Again YOU don't pay the tax, your grandma's "estate" pays the tax and the you inherit whatever is left. You gain those assets without paying any taxes on your end
Now that your grandma has effectively paid taxes on that rental house, you inherit it today as if you bought it at today's price, say $850K
So if you chose to sell it today, you wouldn't make any capital gains. You "inherited it" for $850K and selling for about the same. No profit means no tax. But if you hold it and rent it out and then sell it years later for let's say $1 Million, then you would pay capital gains tax on the $150K worth of profit
Thank you for a very clear explanation!
You're welcome! I'm happy to help! =)
So true, there's so much misinformation and mostly politically motivated propoganda about this. People who really deals in that kind of money wouldn't care paying a little extra in taxes.
I get that if you were about to sell a cottage, you're not happy about paying extra taxes on it now but some self-awareness is important. This is a GOOD problem to have and a fortunate position to be in
But the amount of articles and videos I've seen with blatant misinformation and rage-baiting about a 67% tax is honestly surprising... and a bunch of these posts don't even come from Canada 😅
Capital gain tax is less than income tax because you take the risk of having capital loss.
That's true! And capital loss is a double-edged sword. If you take on a loss, you can use it to reduce your tax bill =)
selling stocks within a tax-free account can ABSOLUTELY affect you - just recently CRA slapped a guy with $600k tax bill for trading stocks in his TFSA, it's just a matter of how much or how often you trade.
Yes if you are day trading in a TFSA, that is NOT allowed because that is business income NOT investing. So do NOT day trade in a TFSA, you will be taxed and penalized. I talk about this in detail here in my TFSA MISTAKES video =)
ua-cam.com/video/s4cBibLATOU/v-deo.html
@@epictetus3406 that gives them the freedom to pick anyone they want and say "you're day-trading", and good luck proving otherwise.
Crooks always win and we lose @@epictetus3406
You have an impeccable gift to explain any complicated matter in simple words so everyone can understand. Thank you, Adrian. I’m looking forward to the next video.
Thank you so much Enid! I always appreciate your kind words and support! 🙏
Great video, thank you, .... so technically if you want to sell a cottage to buy another one.. they screw you.
Yes you would immediately trigger a capital gains tax. If you sell your home that you live in to buy another one, it's tax free because of the principal residence exemption
But a cottage is a luxury / investment, so the exemption doesn't apply. If you sell a cottage to buy another one, you will be hit with a big tax if it grew in value
You know we are living in an unjust society when the most wealthy. Powerful. Decision makers, are less than 0.13% of Canadians
That's certainly not unique to Canada. The same phenomenon exists throughout history and all throughout the world
Please ask ALL chambers of commerce, boards of trades, professional associations and small business councils in Canada to host summits and must invite Trudeau's team of Liberals and Poilievre's team of Conservatives to be their key speakers on Capital Gain Tax increases. It's fair to hear the questions and answers from the people directly impacted by the Capital Gain Tax increases.
Feel free to reach out to your government representatives. That is totally within your right and it's their job to hear you out
More News outlets should hire you. I did understand it but you did the best job at explaining it i have seen so far. Because if you ask me with the parameter they put 100 % would have been perfectly fine.
I would honestly love that! It's so frustrating how bad the government is at explaining these things to everyday people... And it's not a liberal or conservative thing, both sides suck at it... 😅
So anyone who has an property inheritance is getting screwed