f you’re planning to sell your home this spring, you may have heard discussions about changes to the capital gains tax. Some homeowners are concerned that these changes will impact them, but let’s clear up any confusion: if you’re selling your primary residence, you are not affected.
Understanding the Capital Gains Tax Changes
Recently, the government proposed an increase in the taxable portion of capital gains from 50% to 66.7% for individuals earning over $250,000 in capital gains. Initially, this change was set to take effect in June 2024, but due to delays in Parliament, it has been postponed to January 2026.
While this change impacts some property sales, it does not apply to homeowners selling their primary residence.
Why Your Principal Residence Is Exempt
Canada’s tax laws provide a principal residence exemption, which means that when you sell the home you’ve lived in as your main residence, you do not pay capital gains tax on any profit. This exemption remains in place, and the proposed tax changes do not alter this rule.
Who Is Affected by the Changes?
While primary homeowners are not impacted, these tax changes could affect:
- Owners selling rental properties
- Individuals selling second homes, such as cottages or vacation properties
- Real estate investors and house flippers
If your sale does not fall into one of these categories, you do not need to worry about capital gains tax on your home sale.
What Home Sellers Should Focus on Instead
Rather than being concerned about a tax that does not apply, homeowners should focus on maximizing their sale by:
✅ Timing the market well – Understanding seasonal trends and demand can help you sell at the right time. ✅ Preparing your home for sale – Small improvements and staging can make a big difference in attracting buyers. ✅ Working with a real estate professional – A knowledgeable agent can help you navigate pricing, negotiations, and marketing strategies to get the best outcome.
The Bottom Line
If you’re selling your primary residence, capital gains tax is not something you need to worry about. The rules regarding your exemption remain unchanged. Instead, focus on positioning your home for a successful sale and making the most of this spring’s market opportunities.
If you have any questions about selling your home or navigating the current market, feel free to reach out!
The Evans Real Estate Group Blog 