Quebec to increase tax on annual capital gains over $250K

Following the lead of the federal government, Quebec will increase the portion of capital gains that are subject to taxation.

For individuals with capital gains exceeding $250,000 annually, 66 per cent of that windfall is now taxable up from 50 per cent.

The change will bring in up to $3 billion over five years, according to estimates from the province's finance ministry.

This measure was first introduced in Ottawa in the budget presented on Tuesday by Finance Minister Chrystia Freeland.

She said the government would increase the inclusion rate of the capital gains tax from half to two thirds for all businesses and trusts and for individuals who gain more than $250,000 generating an estimated $19 billion in new revenue.

Capital gains are the profits that individuals or businesses make from selling an asset like a stock or a second home.

Ottawa's plan to increase the capital gains tax has already drawn pushback from theCouncil of Canadian Innovators (CCI) and others in the business community.

In a news release Thursday, Quebec Finance Minister Eric Girard said the province is "harmonizing our taxation with five measures announced in the last federal budget. Our goal remains to reduce the overall tax burden on taxpayers while maintaining sound public finances."

Those measures include the introduction of the Canadian Entrepreneurs' Incentive which will provide a tax break to entrepreneurs.

Quebec promises to raise the limit for withdrawals from the Home Buyers' Plan, a program that allows you to withdraw from your registered retirement savings plan for a home purchase. The province will also temporarily ease repayments under this plan.

The provincial finance ministry says in its news release that the Quebec Sales Tax (QST) system will also be modified to align with the federal measure by abolishing the temporary exemption for medical and non-medical masks and face shields.