What are Capital Gains?
Ahhhh, good old Capital Gains. Hello everyone, Brad Sinclair here from the Brad Sinclair Team at Royal Heritage.
Today’s topic, What is Capital Gains? Capital Gains is a tax you pay when you sell a secondary property for more than you paid for it, less any legitimate expenses associated with its sale
Side note. Before we go any further, to be clear, Capital Gains does not get collected on the sale of your principal residence……For now.
How much will you pay in capital gains? That question is best to be answered by your accountant, not your realtor. That said, I will give you a rough calculation for “understanding” purposes here in this video.
Ok, On a capital gain of one hundred thousand dollars ($100,000), you will be tax on 50% of the profit, which would be fifty thousand dollars($50,000). For a Canadian whose tax bracket is at 33% marginal tax bracket for example the gain would be sixteen thousand, five hundred dollars ($16500) of taxes owed. The remaining eighty three thousand, five hundred ($83,000) is the investors to keep.
If you want to get a better idea of what your capital gains tax looks like before you speak to your accountant, there are many capital gains calculators online that can provide some clarity.
There are a two certainties in life: death and taxes. As I said Capital Gains is the swear word in the world of real estate. The simple fact is you live in Canada, you make money off an asset, you will pay tax on it. Just the way it is!
Thanks for watching or reading guys my name is Brad Sinclair your local realtor looking or in your real estate business by bring your local knowledge representation and service.
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