Capital Gains Tax Changes: What Alberta Property Owners Need to Know
Alberta’s Tax Advantage Won’t Protect You from Federal Capital Gains Tax
Albertans have long enjoyed lower taxes—no provincial sales tax (PST), competitive income tax rates, and an overall lower cost of living. These advantages have made Alberta a hotspot for real estate investors, with property values steadily rising across the province.
However, capital gains tax is a federal tax, meaning Alberta property owners are subject to the same rules as the rest of Canada. In June 2024, the federal government proposed raising the capital gains inclusion rate, increasing the portion of profits from selling investment properties, cottages, or vacation homes that would be taxable.
Why Is This Happening?
The confusion around capital gains tax changes stems from political uncertainty. When the proposal was announced in June 2024, it aimed to increase tax revenue by raising the inclusion rate. However, with Prime Minister Justin Trudeau’s resignation and the government transition, the proposed tax changes were left unfinished.
Now, the country is waiting to see what direction the new leadership will take. Meanwhile, the Canada Revenue Agency (CRA) has announced it will proceed with collecting taxes based on the proposed higher inclusion rate. If the changes are not implemented, the CRA will reimburse overpayments—but for now, sellers are still on the hook for higher taxes.
This uncertainty makes it risky to rush into selling an investment property, especially when Alberta’s real estate market is trending upward.
Do You Have to Pay Capital Gains Tax If You Sell Property in Alberta?
Whether or not you owe capital gains tax depends on the type of property:
Primary Residence: Typically exempt from capital gains tax under the Principal Residence Exemption (PRE).
Investment or Secondary Property: Profits from selling rental properties, cottages, or vacation homes are taxable, and the proposed inclusion rate increase could make the tax bill even higher.
With the CRA moving forward with the proposed rates and Alberta’s property values rising, now may not be the best time to sell.
Hold On to Your Investment and Access Equity Tax-Free
Now is a great time to hold onto your Alberta properties. Alberta’s property values are rising, driven by a strong job market, affordability, and economic growth. Rather than selling and facing capital gains taxes, refinancing allows you to access your home equity tax-free while continuing to benefit from future property appreciation.
Refinancing Your Mortgage
Refinancing lets you borrow against your home’s equity, providing immediate tax-free cash without selling your property. Alberta’s steady property growth makes this strategy even more attractive.
Home Equity Line of Credit (HELOC)
A HELOC allows you to draw from your home’s equity as needed, with interest-only payments. It’s a flexible way to access cash without selling your property.
No-Payment and Interest-Only Mortgage Options
Short-term solutions like interest-only loans, no-payment mortgages, or even reverse mortgages can offer temporary relief without forcing a sale. These options are ideal for managing cash flow during uncertain times.
Selling vs. Refinancing: Which Is Smarter in Alberta’s Market?
Why Alberta Investors Should Hold Their Properties
Alberta continues to offer strong long-term opportunities for real estate investors:
Strong Property Value Growth: Alberta’s housing market is growing, especially in cities like Edmonton, Calgary, and secondary markets like Lethbridge and Red Deer.
No Provincial Sales Tax (PST): Alberta remains one of the most tax-friendly provinces for property owners.
Booming Job Market: Economic growth is driving housing demand and population growth.
Affordable Real Estate: Compared to B.C. and Ontario, Alberta offers more affordable housing, making it ideal for long-term investment.
Holding onto your property and accessing your equity through refinancing allows you to benefit from Alberta’s rising market while avoiding unnecessary tax burdens.
Let’s Build a Smart Financial Strategy for You
At Merge Mortgage Group, we specialize in helping Alberta property owners and investors access their home equity without selling. Whether it’s through refinancing, a HELOC, or short-term relief options like interest-only payments, we’re here to help you protect your investments and achieve your financial goals.
We offer a clear, side-by-side comparison of all your financing options so you can make the best decision for your future.
If you know other property owners feeling uncertain about these tax changes, please share this post. Many Canadians don’t realize they have smarter options beyond selling.
Let’s talk about how we can help you protect and grow your real estate investments in Alberta’s thriving market.
