No spike in cottage, investment property sales as new capital gains rules take effect

Changes to the capital gains inclusion rate take effect today — and while some real estate experts say the changes are causing anxiety within the industry, a leading real estate association says it hasn't seen a bump in sales of secondary residences.

As of today, the inclusion rate — the taxable percentage — goes from 50 to 66 per cent on capital gains above $250,000 per year for individuals, and on all capital gains realized by corporations and trusts.

When you sell an asset for a higher price than its original value, the profit is called a capital gain. It could be a cottage, an investment property, a stock or a mutual fund. In Canada, the capital gains tax is not applied to sales of primary residences.

People who own these assets had more than two months after the change was announced to sell their assets before it took effect. But the Canadian Real Estate Association (CREA) says there has not been a significant bump in housing sales.

«We haven't noticed anything notable on the sales side at this time,» said CREA spokesperson Pierre Leduc.

He said the association did notice a bump in multi-family property listings after the budget was tabled but added «we suspect a number of them will be taken off the market after (Monday).»

Mark Pedlar, a realtor who works in the resort town of Grand Bend, Ont., said his clients are worried about the change but other market issues are affecting sales.

«There was an increase in listing this year but the capital gains increase was less of a factor, I think, for people selling than it may be hyped up to be,» he said.

«The interest rates, mortgage renewals, short term rental regulations and market trends have been more of a factor for the increased inventory.»

Pedlar said cottage owners who want