What you need to know about capital gains tax changes in 2025

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Background

On March 21, 2025, the government of Canada said it'd cancel the proposed increase to the capital gains inclusion rate. Previously, there was an announcement in the 2024 federal budget that would increase the capital gains inclusion rate.

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Current status

This means that the capital gains tax remains the same (at 50%). In addition, the government will maintain the increase in the Lifetime Capital Gains Exemption limit to $1,250,000 on the sale of small business shares and farming and fishing property. This information is subject to change.

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How will the announcement impact my tax return?

T1 - The CRA is providing relief on late-filing penalties and arrears interest for impacted T1 filers until Jun 2, 2025.

T2 - Corporations that followed the CRA's guidance and applied the two-thirds inclusion rate based on the September 23, 2024 NWMM tabled in Parliament will receive corrective reassessments to reverse the application of this rate

T3/TP646 - The CRA is providing relief on late-filing penalties and arrears interest for impacted T3 Trust filers until May 1, 2025.

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More information

CRA statement on Agency's late filing penalty relief.

Government of Canada statement on cancelling the proposed increase to the capital gains inclusion rate.

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