Considering selling your plex on the North Shore? ImmoMulti, direct buyer of multi-unit properties on the North Shore, observes that a persistent rumour remains among many owners: no, the capital gains inclusion rate has not increased. In 2026, the capital gains inclusion rate remains at 50% for everyone, as in 2025. The federal increase to 66.67% that had been proposed was deferred then cancelled in 2025: it never came into effect. On a gain of CA$400,000 from the resale of a triplex, half therefore remains taxable, with no threshold and no distinction based on ownership structure. Two issues do truly matter however: CCA recapture, which is added to the gain and taxed as ordinary income, and the possible designation of part of the property as a principal residence if you live there. This article untangles these elements so you come to the table with the right numbers. Consult a tax specialist before selling.
What Is a Capital Gain When Selling a Plex?
When you sell an income property — a duplex, triplex, quadruplex, or larger multi-unit building — the difference between the sale price and your cost (essentially your purchase price plus capitalizable improvements) constitutes a profit. According to Revenu Québec, when selling a rental property, this profit generally constitutes a capital gain to declare.
The capital gain is not fully taxed. Only a portion of the gain — determined by the inclusion rate — is added to your taxable income. This inclusion rate is 50% in 2026, as in previous years. Understanding this mechanism is essential for any owner of a plex on the North Shore who is considering selling, as it determines the net amount that remains in your pocket after tax.
Source: Revenu Québec — Sale of a rental property.
The Inclusion Rate in 2026: The Increase to 66.67% Was Cancelled
This is probably the greatest source of confusion right now, so let's set the record straight. The federal government had proposed in 2024 to raise the capital gains inclusion rate from 50% to 66.67% for the portion of the gain exceeding CA$250,000 per year for an individual (and on the full gain for corporations and most trusts). This measure never came into effect.
Implementation was first deferred to January 1st, 2026 (announcement of January 31, 2025), then the increase was officially cancelled on March 21, 2025. Result: the inclusion rate remains at 50% for everyone in 2026, as in 2025 — individuals, corporations, and trusts alike. There is no higher rate, no CA$250,000 threshold, and no different treatment based on ownership structure.
In other words, whether you hold your plex personally, in your own name, or through a corporation, half of your capital gain is included in taxable income. The ownership structure of your multi-unit property does however have tax effects (corporate tax rates, dividends, etc.) — a subject to validate with an accountant or tax specialist before selling.
Sources: Department of Finance Canada — deferral of implementation and cancellation of the increase (March 21, 2025); see also the analysis from KPMG Canada.
What the 50% Rate Means Concretely for the Seller of a Plex
The table below summarizes the situation from the perspective of an owner-seller disposing of their income property, distinguishing between the proposed rule (which never came into effect) and the rule actually applicable.
| Situation | Inclusion rate | Who is affected |
|---|---|---|
| Rule actually in effect in 2026 (and in 2025) | 50% | All: individuals, corporations, and trusts |
| Gain realized before 2026 | 50% (except exemption) | All |
| Proposed increase to 66.67% (portion > CA$250,000/year) | Cancelled — never in effect | Would have affected individuals and certain trusts |
| Proposed increase to 66.67% on the full amount | Cancelled — never in effect | Would have affected corporations and other trusts |
To make this concrete — strictly for illustration purposes — consider an individual who realizes a capital gain of CA$400,000 from the resale of their plex in 2026. The full gain is included at the rate of 50%, meaning CA$200,000 is added to taxable income for the year. There is no higher tier at 66.67% or CA$250,000 threshold, since the increase was cancelled. This example has illustrative value only for the inclusion rate: your actual calculation depends on many factors (marginal rate, CCA recapture, etc.) and must be established by a tax specialist.
Key takeaways as an owner-seller
- In 2026, the capital gains inclusion rate remains at 50% for everyone.
- The increase to 66.67% was proposed, deferred, then cancelled in 2025: it never took effect.
- There is no CA$250,000 threshold, and no distinct treatment for corporations.
- Maintain a precise record of your adjusted cost base to avoid overstating the gain.
What Is CCA Recapture and Why Is It So Often Forgotten?
Many multi-unit property owners have, over the years, claimed Capital Cost Allowance (CCA) deductions on their property to reduce their taxable rental income. This is a common strategy — but it has a counterpart at the time of sale.
According to Revenu Québec, the sale of a rental property may give rise to a CCA recapture that is added to your income for the year. Unlike the capital gain, this recapture is taxed as ordinary income. It is a distinct element from the capital gain, and it can represent a significant sum for a plex owner who has depreciated their property over many years.
Revenu Québec refers property owners to the guide Capital Gains and Losses (IN-120) for calculation details.
"The profit realized from the sale of a rental property constitutes a capital gain that you must declare. You may also need to add a CCA recapture to your income."
— Revenu Québec, page "Sale of a rental property"Caution: two taxes, not one
Upon resale of your multi-unit property, you may face two distinct tax consequences: the capital gain (at the inclusion rate) and CCA recapture (taxed as ordinary income). Underestimating the recapture is a common mistake. Before selling, have both amounts estimated by a tax specialist or accountant — this content is informational and does not replace professional advice.
Source: Revenu Québec — Sale of a rental property (guide IN-120).
Do You Live in Your Plex? Can the Principal Residence Designation Reduce Your Taxable Gain?
On the North Shore, a large share of small plex owners live in one unit of their duplex or triplex and rent the others. For them, there is a potential lever.
According to Revenu Québec, if the owner lives in part of the property, they can designate part of it as a principal residence, which may reduce the taxable gain related to that portion. For an owner-occupant of a multi-unit property, this designation can make an appreciable difference on the final tax at resale.
However, the eligibility conditions and the calculation of the designated portion are precise and specific to each file. It is not a box to automatically check. Have your eligibility validated by a tax specialist before selling your North Shore plex.
Note: if you sell your plex within 365 days of purchase, a separate rule applies even before discussing capital gains: the flipped property rule then taxes 100% of the profit as business income, and eliminates any possibility of the principal residence exemption. Consult a tax specialist if your holding period is short.
How Does the Inclusion Rate Concretely Affect Your North Shore Plex?
On the North Shore of Montreal — Terrebonne, Mascouche, Blainville, Boisbriand, Saint-Jérôme, Saint-Eustache, Deux-Montagnes, Repentigny — the values of plex and multi-unit properties have risen significantly in recent years. Good news for your asset value: and even on a significant capital gain, the rule remains simple in 2026, at 50% inclusion, with no higher tier at 66.67% since the increase was cancelled. The real impact to anticipate lies elsewhere, particularly on the CCA recapture side.
Here is what the income property owner-seller on the North Shore should keep in mind:
- The inclusion rate does not change the value of your plex. It changes the net amount you keep after tax. Market value depends on the market and yield.
- Your adjusted cost base matters. The more rigorous your record of capitalizable improvements (roof, windows, additions), the more accurate — and potentially lower — your calculated gain.
- The inclusion rate remains at 50%. No tier at 66.67% or CA$250,000 threshold: the increase was cancelled in 2025.
- CCA recapture is the real trap. Taxed as ordinary income, it often catches owners by surprise: have it estimated by a tax specialist.
To estimate the current value of your property before starting a sale process, our analysis of the economic value of plex in Quebec in 2026 and our multi-unit yield calculation guide give you GRM and cap rate benchmarks. And if your goal is to sell your income property quickly, a direct sale saves you broker fees and commission.
ImmoMulti: direct buyer of multi-unit properties on the North Shore
Considering selling your plex and want a simple transaction, without public listing or commission? We buy multi-unit properties on the North Shore directly and submit an offer within 48 h, in complete confidentiality. Receive a no-obligation proposal.
A final reminder, because this is a tax matter: the 50% inclusion rate presented here reflects the rule in effect in 2026, but its application to your situation depends on many factors specific to your file. This content is informational only. Before any decision to sell your plex or multi-unit property, consult a tax specialist or accountant.
