The real estate market has seen price drops and lower interest rates, making it an appealing time for potential investors. However, with the proposed capital gains tax increase delayed until 2026, many are questioning whether now is the right time to buy. 
Capital Gains Tax Changes: A Future Concern?
The federal government’s plan to increase the capital gains inclusion rate from 50% to 66.67% was deferred to 1 January 2026. While this could impact future investment decisions, it’s important to focus on long-term growth rather than short-term policy changes.
Why a Seven-Year Holding Strategy Makes Sense
Rather than worrying about tax changes, a seven-year investment strategy allows time to ride out market fluctuations, pay down a mortgage and build equity. Consider this example:
- Investment Property Price: $750,000
- Down payment: $150,000 (20%)
- Annual Appreciation (3%): After seven years, the property could be worth $922,405
- Mortgage Paid Down: $89,970
- Net Profit After Costs: $195,034
Holding the property even longer, would further increase returns and selling before 2026 could help investors avoid the propose capital gains tax hike.
Is It the Right Time to Invest?
With a flat market, lower interest rates, and strong long-term appreciation potential, this could be a great time to buy an investment property. If you’re considering real estate as an invest, our brokers at Client First Mortgage Solutions, can help you explore financing options and build a solid strategy.
Contact us today to discuss your investment plans!
