Sticker Shock: Canada's Crushing New Capital Gains Tax

May 30, 2024

Hello, savvy investors and entrepreneurial explorers! Buckle up, because today's financial forecast has a twist that’ll make you rethink your northern adventures. Spoiler alert: investing in Canada just got pricier than a moose riding a jet ski.

The Great Canadian Tax Hike

Picture this: you've held onto a piece of Canadian property for years, with dreams of cashing in on its $500,000 value. But wait! Canada’s latest proposal is to increase the capital gains tax from 50% to a jaw-dropping 67%. That's right—our friendly neighbors to the north want to take a chunk out of your profits bigger than a beaver's bite into a maple tree.

Math Time: The Painful Reality

Let’s break it down with some quick math. Selling that $500,000 property under the new tax rate means you’d owe a staggering $333,000 in taxes. Yes, you read that right. Suddenly, your hard-earned profit turns into the federal government's windfall. Is it even worth investing in Canada with these sky-high taxes? Your guess is as good as mine, but it sure makes the US's 20% rate look pretty darn good.

Donna's Sage Advice

Enter Donna Bordeaux, the mastermind at Calculated Moves. With her forward-thinking approach to accounting and knack for helping clients dodge financial headaches, Donna’s here to guide you through these turbulent times. If you're contemplating selling an investment, it might be wise to act fast before the taxman cometh with both hands outstretched.

A Chilling Effect on Investments

So, what exactly is a capital gain? It's the profit you make when you sell an investment—be it stocks, rental properties, or that charming piece of land. While Canadian homeowners might dodge the tax bullet when selling their primary residence, renting it out puts them back in the tax crosshairs. With a 67% rate looming, it’s enough to make even the most daring investor think twice about putting their money in Canadian soil.

Navigating Choppy Waters

At Calculated Moves, we understand the stress that comes with potential tax changes. We’re here to help you chart a course to smooth sailing and tranquil waters. Whether you’re a legacy-builder, modern entrepreneur, or running a family business, we're dedicated to boosting your profits, making great decisions, and keeping Uncle Sam off your back. After all, you’ve got better things to do than crunch numbers—like enjoying what you love.

Stay Informed and Stay Ahead

Keep your eyes peeled and your ears to the ground as we monitor these developments. Donna will keep you informed on the latest and greatest news, ensuring you're always one step ahead. Remember, there’s more to taxes than being on time, and there’s definitely more to life than business.

Curious about how Canada’s tax hike could impact your investments and what strategies can help you stay afloat? Dive into our full article for the comprehensive scoop!

What other tax-related topics would you like us to demystify in future posts?

Donna Bordeaux, CPA with Calculated Moves

Creativity and CPAs don’t generally go together.  Most people think of CPAs as nerdy accountants who can’t talk with people.  Well, it’s time to break that stereotype.  Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux.  They have over 50 years of combined experience as entrepreneurial CPAs.  They’ve owned businesses and helped business owners exceed their wildest dreams.   They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.