How to calculate a capital gain on a second property? Including improvements in your adjusted cost base could save you taxes when you sell. The improvements you make over the years to a cottage or investment property can save you on taxes when you sell.
Coming changes to the capital gains inclusion rate have jolted not just the wealthy, but also people with long-held cottages or second property owned as an investment. Starting June25, they will have to pa tax on two-thirds of the capital gain above $250,000; half of gains up to that threshold will be taxable. Currently, the 50% inclusion rate applies to all capital gains.
A capital gain is a the selling price minus the purchase cost, acquisition costs and the amount spent on improvements made while you owned the property. This combined amount is called the adjust cost price.
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