Faced with the concerns of certain plex owners, the Minister of Finance, Chrystia Freeland, affirms that the increase in capital gains tax proposed by the federal budget would only affect the better off.
The federal budget proposes that the capital gains inclusion rate increase from 50% to 66% from the threshold of $250,000, as of June 25. Quebec will also follow suit at the federal level.
Several Canadian media have reported criticism from plex owners, who consider themselves unfairly affected by this measure which targets the better off.
Mme Freeland argues that several terms of the tax measure protect middle-class owners. She mentioned, at a press conference in Montreal on Monday to promote her budget, that the capital gain on the main residence is not affected.
In other words, the owner-occupier of a plex would not pay tax on the proportion of the capital gain linked to his residence, only on the gains linked to the space he rents.
She points out that the taxation of the first annual tranche of capital gains of $250,000 remains unchanged. This also means that an owner couple would not be affected for the first $500,000 of the capital gain, she specifies.
“For us it was very important to target this change, not to the middle class, but especially to the better off,” she insists.