No, the proposed capital gains tax increase for 2026 was cancelled in March 2025, and the inclusion rate remains at 50%.
In the 2024 federal budget, the Canadian government proposed raising the capital gains inclusion rate from 50% to 66.67% (for gains above $250,000 for individuals and for all gains for corporations and most trusts). The policy was initially scheduled to begin on June 25, 2024, but was later deferred to January 1, 2026.
However, in March 2025, Prime Minister Mark Carney cancelled the proposal outright. That means real estate investors and individuals continue to pay tax on 50% of their realized capital gains. For example, if you sell a Toronto investment property and earn a $200,000 profit, $100,000 is taxable at your marginal income tax rate.
Although the increase will not take effect immediately, tax policy can still shift with future federal budgets. Real estate investors, especially those holding secondary properties, multiplexes, or downtown condos, should monitor federal updates and review strategies with accountants to prepare for potential changes.
At Fox Marin Real Associates, we work with clients and their financial advisors to integrate tax considerations into real estate decisions. With over $580M in sales, 1,000+ successful transactions, and 450+ five-star Google reviews, we provide the market insight and planning context investors need to make informed decisions in Toronto’s dynamic market.
Key takeaway: The 2026 capital gains tax increase has been cancelled; however, investors should remain vigilant for future federal policy changes that could impact real estate.
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