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

The higher rate was introduced through a Notice of Ways and Means Motion and draft legislation, but the bill was never passed by Parliament, so section 38 of the Income Tax Act kept its one-half inclusion rate throughout. The CRA initially said it would administer the proposal from 2024-06-25 as it normally does for announced measures, which left corporations and trusts with filing deadlines in late 2024 uncertain about which rate to report.

The 2025 Deferral and Scrap

Two pivots occurred in early 2025:

2025-01-31 — Deferral announced: The Department of Finance announced it was deferring, from 2024-06-25 to 2026-01-01, the date on which the inclusion rate would rise from one-half to two-thirds. The deferral applied to every taxpayer, so all capital gains realized before 2026-01-01, including all of 2024, stayed at the 50% inclusion rate.

2025-03-21 — Full scrap: Finance Canada announced it was not proceeding with the inclusion rate increase at all. The rate stays at 50% for all taxpayers and all gain levels.

What Happened to 2024 Returns

Because the deferral was announced before the individual filing season, 2024 T1 returns reported capital gains at the 50% inclusion rate. Corporations and trusts that had already filed a 2024 return using the two-thirds rate could amend it to the 50% rate.

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.