$2.5 Billion Wave of Real Estate Sales Incoming? Capital Gains Tax Increase Could Spark Market Activity

$2.5 Billion Wave of Real Estate Sales Incoming? Capital Gains Tax Increase Could Spark Market Activity
May 1, 2024

As Canada prepares for significant changes to capital gains taxation in 2024, both individuals and corporations are bracing for the impact on their assets, particularly real estate. This report provides an in-depth analysis of the expected changes, their projected revenue impact, and the resultant real estate market dynamics.

Capital Gains Inclusion Tax Changes

Starting June 25, 2024, Canada will see an increase in the capital gains inclusion rate from 50% to 66.67% for gains exceeding $250,000. This policy adjustment aims to increase government tax revenues by targeting higher-value transactions across both personal and corporate assets.

Projected Government Revenue from Tax Changes

The government anticipates substantial increases in tax revenues due to this policy change:

  • Corporate Income Tax Revenue: An increase of $4.945 billion is expected from corporate capital gains in the fiscal year 2024–2025.
  • Personal Income Tax Revenue: An increase of $1.955 billion is forecasted from personal capital gains.

Source: Budget 2024

These projections underline the tax policy's role in economic adjustment, aiming to balance the fiscal scales by taxing high-value gains more heavily.

Real Estate's Share in Anticipated Tax Revenues

Given that over 60% of Canadians' personal net worth is tied up in real estate, and considering corporate asset allocations to real estate, significant portions of the forecasted tax revenues are likely derived from real estate transactions:

  • From Personal Capital Gains: Approximately $1.955 billion in tax is expected from personal gains, with real estate constituting about 60% of personal assets. This translates to roughly $1.173 billion in tax revenue expected from personal real estate sales.
  • From Corporate Capital Gains: With corporate gains projected to bring in $4.945 billion and real estate making up about 10% of corporate assets, around $494.5 million in tax revenue might come from corporate real estate transactions.

Impact on Real Estate Market

The total real estate sales potentially influenced by the upcoming capital gains tax change could be substantial. Considering both personal and corporate contributions, we estimate around $2.858 billion worth of real estate could potentially hit the market:

Personal Real Estate Sales: With an estimated total of $3.35 billion in sales, and considering that 60% of personal net worth in Canada (Statistics Canada) is typically invested in real estate, we apply this percentage to forecast the impact:

Calculation: $3.35 billion * 60% = $2.01 billion

Corporate Real Estate Sales: From the estimated $8.48 billion in corporate asset sales, assuming about 10% is in real estate—a common allocation in diversified corporate portfolios according to industry standards and insights from reports like those from McKinsey on institutional investment trends:

Calculation: $8.48 billion * 10% = $848 million

Total Estimated Real Estate Sales Triggered by Tax Change

Total Real Estate Sales: $2.01 billion (personal) + $848 million (corporate) = $2.858 billion

*The proportions used (60% for personal and 10% for corporate) are based on typical asset distribution patterns noted in financial behavior studies by and asset management reports.

These estimates suggest a considerable increase in market listings as sellers accelerate transactions to leverage the current lower tax rates. This influx could temporarily soften real estate prices and increase market volatility. However, increased listings could also present buying opportunities for those looking to enter the market.


The impending changes to the capital gains tax are poised to reshape Canada's financial and real estate landscapes significantly. Stakeholders, including property investors and corporate asset managers, would benefit from strategic planning and consultations with financial advisors to navigate these changes effectively.


  • Individual Investors: Review personal real estate holdings and consider the timing of sales or acquisitions in light of the new tax regime.
  • Corporations: Evaluate corporate real estate portfolios for potential restructuring to optimize tax liabilities under the new inclusion rates.

Contact Coldwell Banker Horizon Realty today to connect with experienced real estate professionals who can guide you through the changing market dynamics.


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