What changed · verified 24 July 2026
Canada's capital gains inclusion rate is still 50% — the 66.67% hike was cancelled, not enacted
The answer you’ll still hear
"Canada raised its capital gains inclusion rate to 66.67% — two-thirds of a gain above $250,000 is now taxable."
As of 21 March 2025, per the Prime Minister of Canada's announcement cancelling the proposed hike, Canada's capital gains inclusion rate stays at one-half (50%); the increase to two-thirds (66.67%) on individual gains over $250,000 was deferred in January 2025 and then cancelled outright, so it never became law and applies to no tax year.
What actually changed
The 2024 federal budget proposed raising the capital gains inclusion rate — the share of a gain that is taxable — from one-half to two-thirds, with the higher rate applying to the portion of an individual's gains above a $250,000 annual threshold, and to the first dollar for most corporations and trusts. Draft legislation was tabled, but it was never passed into law.
The proposal then unwound in two steps. On 31 January 2025 the Department of Finance Canada announced it was deferring the effective date from 25 June 2024 to 1 January 2026. Then on 21 March 2025 the Prime Minister's Office announced the increase was cancelled entirely — its release says the government 'will cancel the proposed increase' and that the inclusion rate will remain at one-half. The separate rise in the Lifetime Capital Gains Exemption to $1,250,000 was kept; only the inclusion-rate hike was scrapped.
The one point most stale write-ups miss: because the measure was deferred and then cancelled before ever being enacted, there is no year in which 66.67% applied — not 2024, not 2025, not 2026. Anyone told the higher rate 'took effect for gains realised after 25 June 2024' is working from budget-day coverage that history overtook. CRA's own line 12700 guidance for 2025 uses the one-half inclusion rate.
Who this hits
Anyone who realised a large capital gain — sold a business, a second property, or a concentrated stock position — in 2024, 2025 or 2026, especially with gains above the proposed $250,000 threshold, plus incorporated professionals and holding companies that would have faced two-thirds inclusion from the first dollar. It also hits anyone getting a quick tax estimate from an AI assistant: many were trained on 2024 budget-day coverage of the hike and will still apply 66.67%, quietly overstating the tax owed by a third on the affected gains.
The current number, for you
A chat assistant gets this wrong because the story has three chapters — proposed, deferred, cancelled — and models trained on the loud 2024 budget coverage often stop at chapter one, then confidently apply 66.67% to gains over $250,000. There is no calculation trick here, just the current rule: take your net capital gain, include one-half (50%) of it in income, and tax that at your marginal rate. The two-thirds inclusion rate was never law and applies to no year — if an estimate uses 66.67%, it is overstating your tax.
Sources
- Prime Minister of Canada — Carney cancels proposed capital gains tax increase (21 March 2025) ↗
- Department of Finance Canada — Government announces deferral of change to capital gains inclusion rate (31 January 2025) ↗
- CRA — Line 12700, Calculating and reporting your capital gains and losses (one-half inclusion rate) ↗
Rule changed: 21 March 2025 · last verified against primary sources: 24 July 2026