Angus Reid survey shows lack of support for incoming change
The new capital gains tax rules that come into effect on June 25, have raised concerns from business groups and health professionals, and many individuals are bracing for its impact.
The higher inclusion rate for capital gains tax at 66.67% compared to the current 50% rate is one of the changes that the federal government says will “make tax fairer” but a new Angus Reid Institute poll reveals that more Canadians are against it than support it.
This includes the one in five respondents that believe their after-tax income will be reduced over the next five years as a result of the capital gains changes.
Poll participants were asked the question:
“A capital gain is the difference between the cost of an asset — an investment property, a stock or a mutual fund — and its total sale price. The change would mean tax must be paid on two-thirds of this sale now instead of half on capital gains of more than $250,000. Will this change in how capital gains are treated affect your personal after-tax income over the next five years?”
Slightly more than half of respondents (53%) said they would not be affected, but 12% expected to pay a little more and 11% expect to pay a lot more. The government had stated that just one tenth of 1% of taxpayers would be affected.
The remainder were not sure, highlighting the need to engage with advisors to make sense of the changes.
Excluding those who were not sure, those with the highest household income levels expect to be the most impacted, rising from 13% of those with less than $25K expecting to pay at least a little more, through to 47% of those in the $200K+ income group.
Opposition
Unsurprisingly, opposition to the changes becomes stronger in line with higher income levels, but overall one-third support the capital gains inclusion rate increase and half oppose it. Opposition tends to be higher among older generations.
There are still many people who are unaware of the changes, again requiring a conversation with their advisor. The poll found that approximately two-in-five Canadians have heard little to nothing about the issue, while one-quarter (27%) claim they are following it closely. Younger Canadians are less likely to be engaged with the issue.
