Canadian Capital Gains Inclusion Rate: 2024 to 2026 History

Canada’s capital gains inclusion rate has been 50% for individuals for decades — meaning only half of a realized capital gain is added to taxable income. Between April 2024 and March 2025, the federal government proposed, implemented under draft legislation, and then scrapped a significant increase to that rate. Understanding the full sequence matters if you filed a 2024 T1, claimed a capital gain or loss in that year, or are planning any disposition in 2026.

The 2024 Budget Proposal

On 2024-04-16, the federal government tabled Budget 2024 with a proposal to increase the capital gains inclusion rate from 1/2 (50%) to 2/3 (approximately 66.67%) for:

• Corporations and most trusts: on all capital gains, with no threshold
• Individuals: on the portion of capital gains exceeding $250,000 in a calendar year

Below the $250,000 annual threshold for individuals, the existing 50% inclusion rate would continue to apply. The $250,000 threshold was not indexed to inflation and applied to net capital gains in a single calendar year, not cumulative lifetime gains.

The proposed effective date for the higher rate was 2024-06-25 (the day after the Budget implementation date). This created an unusual situation where gains realized before June 25 and gains realized on or after June 25 within the same calendar year would be subject to different inclusion rates.

Effective Date and CRA Administrative Position

Because the Budget 2024 inclusion rate change was introduced as draft legislation rather than through a formal enacted bill that passed before June 25, there was legal uncertainty about its status. Despite this, the Canada Revenue Agency adopted an administrative position to:

• Apply the 2/3 inclusion rate to corporate gains on or after 2024-06-25
• Apply the split-rate regime to individual T1 filers for 2024 — 50% on the first $250,000 of net capital gains and 2/3 on the excess

The CRA issued updated T3, T2, and T1 schedules and guidance for the 2024 tax year reflecting the proposed rates. Individual filers with gains above the $250,000 threshold in 2024 were expected to use the blended calculation method when filing their 2024 T1.

The CRA’s Schedule 3 (Capital Gains and Losses) was revised to accommodate the split. Taxpayers who realized large capital gains deliberately before June 25, 2024, to lock in the 50% rate on a full-year basis were in a different position from those with gains straddling the date.

The 2025 Deferral and Scrap

Two pivots occurred in early 2025:

2025-01-31 — Deferral announced: The Department of Finance announced it was deferring the implementation of the higher inclusion rate to 2026-01-01 for corporations and trusts, citing the need for more consultation and the ongoing federal parliamentary situation. Individuals’ $250,000 threshold and split-rate 2024 treatment remained as previously communicated.

2025-03-21 — Full scrap: With the March 2025 federal Budget (and the federal election period approaching), Finance Canada confirmed it was not proceeding with the inclusion rate increase at all. The rate reverted to 50% for all taxpayers and all gain levels, for all years including 2024.

What Happened to 2024 Returns Filed Under the 2/3 Rate

Taxpayers who filed their 2024 T1 or T2 under the assumption the 2/3 rate would apply — and paid more tax as a result — could request a reassessment. The CRA’s position after the March 2025 scrap was:

• T1 (individuals): Taxpayers who reported gains above $250,000 and applied the 2/3 rate to the excess were entitled to file a T1 Adjustment (T1-ADJ) to claim a refund of the excess inclusion. The CRA would apply the 50% rate retroactively to the full 2024 year — no blended calculation required.
• Interest: Where overpayment had occurred and the CRA had received instalments or balance owing based on the higher rate, applicable refund interest would be paid.
• Corporate filers: Corporations that had already filed T2 returns applying the 2/3 rate had the option to request reassessment. Those that had not yet filed (within the extension window) could simply file at 50% from the outset.

If you had losses carried forward that were calculated under the 2/3 framework, those should be reviewed in light of the reversion to 50%.

2026 Confirmed at 50%

For 2026 and beyond, the capital gains inclusion rate is 50% for all Canadian taxpayers — individuals, corporations, and trusts — with no dollar threshold and no tiered rate. The failed 2024 proposal left no permanent legislative change.

On your 2026 Schedule 3, all net capital gains are included in income at 50%, and capital losses offset gains at the same 50% rate. There is no split calculation, no $250,000 band, and no need to track the date of disposition relative to any inclusion-rate boundary.

Use the Capital Gains 2026 Reconciler to see your actual tax bill versus what the scrapped proposal would have cost.