‘Get Woke’ Series: Do Capital Gains Count as Income?

Jan 10, 2020 | Market Updates

When is a Capital Gain Triggered?

A capital gain is triggered when the value of an asset increases compared to what was paid to acquire the asset.

In Canada, property owners may or may not have to pay tax relating to a capital gain on their real estate. They do not have to pay tax on the capital gain if the capital gain relates to their primary residence or a property that they designate as their primary residence.

Tax Relating to a Capital Gain

There is not a capital gains tax. Rather, the tax relating to a taxable capital gain works as follows: (Sale price minus the costs of selling) minus (purchase price PLUS the costs of acquisition) = the capital gain. Of this capital gain, 50% is taxable and therefore referred to as the taxable capital gain. The taxable capital gain is then added to the owner’s income for the year and their income tax rates then apply.

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