Each year, Quebec makes adjustments to its tax rule system to align with federal changes or to adapt to economic realities. In 2025, one of the major changes announced is the harmonization of Quebec’s tax regime with certain federal measures, including the delay of change to the capital gains inclusion rate.
This article explains what this means for you, and how you can benefit from (or adapt to) these adjustments.
1. What is the “capital gains inclusion rate” and why does it matter?
- The inclusion rate determines what portion of a capital gain is taxable.
- The Quebec government has confirmed that it will defer until 2026 the implementation of the change to the capital gains inclusion rate, in order to harmonize with the federal government.
- For 2024, the rate remains at 50%. This gives some breathing room for those planning to sell assets (real estate, shares, or businesses).
2. Other tax measures announced in the Quebec 2025 budget
- The government announced adjustments to the tax regime affecting the investment and innovation tax credit, the tax break for major projects, and the family allowance for mourning parents.
- The budget also introduces a new tax credit for research, innovation, and commercialization (CRIC), replacing eight previous R&D measures.
- Changes are also being made to the « career extension » regime, with increases to some amounts and thresholds.
3. Potential impacts for entrepreneurs and individuals
- If you’re planning to sell a business or major assets: the inclusion rate deferral gives you time to structure your transaction for the best tax result.
- For innovative companies: the new CRIC offers simpler and more generous tax financing than the old fragmented credits.
- For older workers or those extending their careers: adjusted income amounts, new thresholds, and revised exclusions can improve income and tax decisions.
- Be aware of technical adjustments: some changes are technical—they may affect how you calculate certain credits or returns.
4. What should you do now?
- Plan for any assets you want to sell in the coming years and start modeling scenarios using both the current and future inclusion rates.
- If you’re an R&D or technology business, evaluate your projects’ eligibility for the CRIC as soon as it becomes available.
- Consult your accountant now to review your tax strategies, especially with legislative changes pending.
- Stay informed: monitor Revenu Québec bulletins for technical details (dates, forms, applications).
Conclusion
The 2025-2026 Quebec tax changes don’t completely reinvent tax rules, but they do change some key levers—particularly for capital gains, innovative businesses, and investment support programs. For both entrepreneurs and individuals, these adjustments bring new challenges and opportunities.
Sentinelle Fiscale is here to help. Contact us for a personalized planning session.