Donations of private shares and real estate to registered charities and other qualified recipients are currently subject to taxable capital gains.
To facilitate support from Canadians giving to charitable organizations, Economic Action Plan 2015 proposes to exempt individual and corporate donors from tax on the sale of private shares of real estate to an arm’s length party when the proceeds are donated within 30 days. If a portion of the proceeds is donated, the exemption from capital gains tax would apply to that portion. This measure will apply to donations in respect to dispositions occurring after 2016.
This is great news for charities like the Shuswap Community Foundation, Shuswap Hospital Foundation, Vernon Hospital Foundation and many more charities in our communities.
The broadening of the tax exemption on capital gains will benefit charitable organizations of all types - from hospitals, universities and cultural groups to the vast network of social service agencies funded by the United Way across Canada.
This will be a cost-effective way of unlocking more private wealth for the public good. It is estimated that this tax saving will cost federal revenues around $265 million between 2016 and 2020.
Our government also has in past budgets introduced a First Time Donor’s Super Credit which is available on cash donations of up to $1000 made before 2018, to encourage young Canadians and first-time donors to support charitable organizations.
Our government has also reduced the administrative burden on charities; the Government eliminated a number of disbursement quota requirements, allowing charities to focus more of their time and resources on the good work they do.
These improvements to Canada’s tax regulations will benefit Canadian charities by allowing them to draw on broader supports and expand the good work that they do.
- Colin Mayes is the member of Parliament for Okanagan-Shuswap.