Capital Gains: QS Wants to Tax 100% of Your Plex — what the proposal would change for a seller

ImmoMulti — a direct buyer of income properties on Québec's North Shore — follows the tax news that affects property sellers. On June 29, 2026, Québec solidaire (QS) proposed taxing 100% of the capital gain realized on real estate sales, instead of the 50% inclusion rate that applies today. For an owner considering selling a plex or an income property in Québec, this deserves a clear-eyed look — without panic. Key point up front: this is a proposal from an opposition party, not a law in force. Nothing changes for now. This article explains, from the seller's perspective, what the measure would do if adopted, who would be exempt, and why it divides opinion.

What exactly is Québec solidaire proposing on real estate capital gains?

Québec solidaire proposes taxing 100% of the capital gain realized on real estate sales, instead of the current 50% inclusion rate. The entire resale profit would be added to the seller's taxable income and taxed like a salary. It is an opposition proposal announced on June 29, 2026 — not an adopted law.

The proposal, unveiled by Québec solidaire members, aims to change how the capital gain is taxed when a building is sold. Today, only part of the profit realized on resale enters the seller's taxable income. QS wants that share raised to 100% for real estate transactions.

In concrete terms, the entire gain — the difference between the sale price and the price paid, minus eligible expenses — would be treated as ordinary income, just like a salary. For an owner of a plex or multi-unit building, the impact on the tax bill of a sale could be significant. QS co-spokesperson Ruba Ghazal summed up the intent as follows.

Source: Radio-Canada — "Québec solidaire wants to tax 100% of capital gains on building sales" (June 29, 2026).

The numerical example: a $200,000 gain fully taxable

To illustrate the measure, the example reported by Radio-Canada is simple. A building purchased for $300,000 and resold for $500,000 yields a $200,000 gain. Here is what the proposal would change, all else being equal:

The difference is stark: the taxable portion would double, rising from $100,000 to $200,000 in this example. That portion is added to the seller's income for the year of the sale and taxed at the applicable marginal rate. The larger the gain, the greater the effect — which is why many owners of multi-unit buildings who have held for a long time and accumulated significant appreciation are concerned.

An important note: this example is deliberately simplified. The real capital gain calculation on an income property also accounts for eligible expenses, recapture of depreciation and other factors. For a figure specific to your situation, consult a tax advisor and use our calculator.

Important: the QS proposal is not the regime in force

This is the point to remember above all. The 100% proposal must not be confused with the inclusion rate that actually applies today to income property sales. The two notions are distinct:

• The regime in force: when you sell your plex, only part of the capital gain is included in your taxable income. This is the tax framework that concretely applies to every transaction today.
• The QS proposal: raising that share to 100% for real estate sales. This is a political position from an opposition party, with no force of law.

In other words, if you sell your income property today, nothing changes: the current rules apply. To understand precisely how the inclusion rate works at the time of a sale, see our dedicated article: Capital gains on selling your plex in Québec — the inclusion rate in force. This article deals only with the QS proposal.

What the proposal would change for selling your plex or multi-unit building

If it were ever adopted, the measure would mainly affect the owner-seller of an income property who does not live in it. Here are the effects to anticipate, from the seller's perspective:

• A heavier tax bill on resale: by doubling the taxable portion of the gain, the measure would raise the tax paid in the year a plex held as an investment is sold.
• An incentive to hold longer: some owners might delay a sale, which would reduce the supply of buildings on the market — an effect the current government fears.
• A yield calculation to revisit: the net return on a multi-unit investment is also measured at the exit. Heavier taxation of the gain would change the equation for investors on the North Shore and beyond.

For a North Shore owner — in Terrebonne, Mascouche, Blainville, Boisbriand, Saint-Jérôme, Saint-Eustache or Deux-Montagnes — whose plex has appreciated in recent years, a large accumulated gain would make the effect of 100% inclusion particularly noticeable. It is precisely this kind of owner, often a small investor, that the measure would target most.

The exemption for owners who live in their building

A key element of the proposal concerns owner-occupants. According to Ruba Ghazal, the measure would include an exemption for those who live in their building — for example the owner of a triplex who occupies one of the units and rents the others. This profile, very common in Québec, would therefore not be targeted the same way as a pure investor.

That distinction reflects the stated logic of the measure: to target real estate speculation rather than the human-scale owner-occupant. That said, because it is a proposal and not a legislative text, the exact terms of the exemption — required occupancy duration, share occupied by the owner, treatment of a partly occupied plex — are not specified. An owner-occupant who sells should validate their situation with a tax advisor.

QS justifies the proposal by pointing to the housing crisis. Ruba Ghazal noted that more than 3,200 families needed help finding housing before July 1 — a context that, according to the party, justifies discouraging quick speculative resales.

Reactions from landlords and the government

The proposal drew contrasting reactions right away. On the landlord side, Martin Messier, of the Association des propriétaires du Québec (Quebec Landlords Association), was critical.

On the government side, Premier Christine Fréchette rejected the measure, calling it "neither structuring nor constructive." She voiced concern that the proposal would discourage small landlords and cited technical obstacles, notably Québec's harmonization with federal tax rules. All of which makes the measure's adoption uncertain at this stage.

For a property seller, the practical takeaway is simple: watch the debate, but base your decisions on the rules actually in force. If you are already considering selling your income property, have your gain assessed by a professional and, for a direct offer with no broker or commission, ImmoMulti can present a purchase price within 48 hours.

Sole source for this article: Radio-Canada (June 29, 2026). Consult a tax advisor or notary for any decision related to your situation.

How a capital gain on an income property is really calculated

The QS proposal talks about taxing "100% of the gain." But before debating the inclusion rate, you first have to know which gain we are talking about. The "sale price minus purchase price" figure from the headlines is a simplification. The real calculation of a capital gain on a plex runs through three blocks, and each one can move the bill by tens of thousands of dollars.

1. The proceeds of disposition (what you actually pocket)

The starting point is not the listed price but the proceeds of disposition: the sale price minus the expenses incurred to sell. For an income property, these selling costs include the brokerage commission (if any), the notary fees payable by the seller, advertising, an up-to-date certificate of location, an appraiser's fee and, sometimes, a mortgage prepayment penalty. Every dollar of eligible selling expense reduces the gain accordingly.

2. The adjusted cost base (ACB)

Against the proceeds of disposition you set the adjusted cost base (ACB). This is not just the price paid at purchase: you add the original acquisition costs (transfer duties, notary fees, inspection) and, above all, the cost of the capital improvements made to the building over the years — a new roof, windows, an extension, a full heating-system replacement, adding a unit. By contrast, ordinary maintenance repairs (painting, a one-off fix) are not added to the ACB: they were normally deducted from rental income in the year they were incurred. Revenu Québec details this distinction between current and capital expenses in its documentation for rental-property owners.

Reference: Revenu Québec — Owner of a rental property: income and expenses.

3. The net capital gain

The capital gain is the difference between the proceeds of disposition and the ACB. It is this amount that the inclusion rate then splits: 50% today, 100% under the QS proposal. Here is the full mechanism, applied to a North Shore triplex sold for $620,000:

The gap with the simplified version is immediate: a seller who merely subtracts the purchase price from the sale price would "see" a $240,000 gain, whereas the real tax gain is $163,000. Ignoring selling expenses and capital improvements means overstating your gain — and sometimes setting aside tax you do not owe. Our capital gains calculator walks through each of these lines.

The overlooked trap: depreciation recapture, already taxed at 100%

Here is the element the QS proposal throws into sharp relief, often without owners realizing it: part of your bill on a sale is already taxed at 100% today. It is the recapture of the capital cost allowance (CCA) — depreciation.

During the holding years, many owners of multi-unit buildings claim CCA to reduce, or even wipe out, tax on their net rental income. This is a tax deferral: every dollar of CCA claimed lowers the building's "undepreciated capital cost" (UCC). At the time of sale, if the price exceeds that UCC, the depreciation claimed earlier is recaptured — that is the recapture — and it is added to the year's income at 100%, like a salary. Unlike the capital gain (taxed at 50%), CCA recapture has never benefited from the reduced inclusion rate.

Reference: Revenu Québec — Deducting an amount as depreciation.

Why is this crucial in the debate over the QS proposal? Because an owner who claimed CCA for years discovers, at the sale, that the bill already has two layers: recapture (at 100%) plus the capital gain (at 50%). The QS measure would touch only the second layer, not the first — which already exists. Understanding this structure avoids two opposite mistakes: believing "everything is at 50%" (false if you depreciated), or panicking that the proposal would add an entirely new tax (it would rather align the gain with the treatment already applied to recapture).

An example to see both layers

Take the triplex sold for $620,000, with a $163,000 capital gain. Suppose the owner claimed $40,000 of CCA on the "building" portion over the years. On disposition:

• Depreciation recapture: $40,000 added to income, taxable at 100% — whether the QS proposal passes or not.
• Capital gain: $163,000, of which 50% ($81,500) is taxable today, versus 100% ($163,000) under the QS proposal.

The practical lesson: before claiming CCA year after year, you must anticipate this recapture at the exit. Many North Shore owners are better off discussing it with a tax advisor well before listing their building.

Three worked scenarios: current regime versus the 100% proposal

To gauge the gap between the regime in force and the QS proposal, let us compare three seller profiles. We apply a high but realistic marginal rate for a taxpayer whose gain stacks on top of other income: in Québec, the top combined marginal rate reaches roughly 53.3% on the highest income bracket. The figures below show the taxable portion and the approximate tax; they do not replace a personalized calculation.

Top combined marginal rate (federal + Québec) 2026: about 53.31%. Reference: Research Chair in Taxation and Public Finance — individual tax brackets.

*Extra tax = additional taxable portion × assumed marginal rate (~53.3%), for illustration only. The real rate depends on your other income for the year.

Two things stand out. First, the gap is not linear for your wallet: the larger the accumulated appreciation, the steeper the bill, because the second half of the gain piles up at the very top of the tax ladder. Second, the owner of a building held for a long time — typically someone who "built a retirement" on a plex bought fifteen or twenty years ago — would be the most exposed, even though that profile is nothing like a speculator. That is precisely the argument made by opponents of the measure.

The federal backdrop: the 66.67% hike proposed and then cancelled

The QS proposal does not land in a vacuum. It echoes a recent national debate on the capital gains inclusion rate, which had a turbulent journey at the federal level — one a property seller has every reason to understand in order to place the Québec measure in context.

The 2024-2025 sequence

• April 2024: the federal budget proposes raising the inclusion rate from 50% to 66.67% (two-thirds) on annual gains above $250,000 for individuals, and on all gains for corporations, with an effective date of June 25, 2024.
• January 31, 2025: facing uncertainty, the government defers the effective date to January 1, 2026.
• March 21, 2025: the government cancels the hike outright. The inclusion rate stays at 50%.

Sources: Department of Finance Canada — deferral of the measure (January 2025) and the March 2025 cancellation announcement (rate maintained at 50% for 2026).

In other words, nationwide the inclusion rate stayed at 50% for 2026, after a hike that was announced, deferred, then abandoned. This context clarifies two things. First, changing the inclusion rate is politically and technically delicate, even for the then-majority federal government: QS, an opposition party in Québec, proposes something even more radical (100%, targeting real estate). Second, capital gains taxation is primarily a federal matter, to which Québec generally harmonizes — a point that, as we will see, seriously complicates the proposal's feasibility.

Legal ways to reduce or defer the tax on the gain

Whether the QS proposal is adopted or not, a property seller has every interest in knowing the legitimate levers that exist to soften the tax hit of a sale. None of these tools erases the tax; they let you reduce it, spread it or defer it. They are planned before signing, not after.

The capital gains reserve (spreading over several years)

When part of the sale price is collected later — for example if you accept a vendor take-back (balance of sale) payable over a few years — the law allows, under conditions, reporting the gain gradually rather than all at once. This spreading, generally capped at a maximum period, avoids stacking the whole gain on a single tax year and inflating your marginal rate. For a large gain, splitting the inclusion over several years can mean thousands of dollars saved.

The balance of sale (vendor take-back)

Beyond its tax effect, a balance of sale is a negotiating tool: it makes the transaction easier for the buyer while opening the door to the capital gains reserve on the seller's side. It does carry credit risk (the buyer could default) and should be framed by a notary, ideally with a mortgage guarantee on the sold building.

The choice of timing for the disposition

The gain is added to your other income in the year of the sale. Selling in a year when your other income is lower — for example in retirement, after a drop in business income, or by timing the closing just after January 1 — can reduce the marginal rate applied to the taxable portion. This kind of arbitrage is planned several months ahead.

Personal ownership or through a corporation

Holding an income property through a corporation has distinct tax effects, notably on the treatment of the gain, access to the capital dividend account and taxation at death. It is not a universal solution: fees, complexity and corporate tax rules can wipe out the advantage for a small portfolio. It is a trade-off to make with a tax advisor, based on the size and horizon of your portfolio.

One last reflex, too often neglected: keep your invoices. Every major documented renovation (invoice, contract, permit) increases your adjusted cost base and therefore reduces the taxable gain. Over fifteen years of ownership, a well-kept box of receipts can be worth tens of thousands of dollars in tax saved.

Common seller mistakes around the capital gain

From helping sellers of multi-unit buildings on the North Shore, we see the same missteps recur. The QS proposal revives some of these confusions; here are the ones that cost the most.

Confusing a proposal with a law

This is the mistake of the moment. A headline about the QS measure sometimes triggers rushed sales "before it changes." Yet nothing has changed: the proposal is not in force, and its adoption is uncertain. Selling in a panic means risking selling a building cheap to avoid a tax that does not exist.

Forgetting depreciation recapture

Many owners calculate their sale tax as if all their profit were a capital gain at 50%, forgetting the CCA recapture at 100% they created themselves by depreciating each year. The surprise, at the sale, can be several thousand dollars of unprovisioned tax.

Failing to add improvements to the ACB

A roof, windows, an extension: these capital expenses reduce the taxable gain by raising the adjusted cost base. Without kept invoices, the seller "loses" them and pays tax on an overstated gain.

Confusing principal residence and income property

The principal residence exemption can cover the portion the owner lives in within a plex, but not the rented units. Treating a whole triplex as an exempt principal residence is a classic error that can lead to a reassessment.

Selling without figuring out the net proceeds

The sale price is not what stays in your pocket. Between the tax on the gain, the CCA recapture, the mortgage balance, the prepayment penalty and the fees, the real net proceeds can surprise you. Working it out before accepting an offer avoids nasty surprises at the notary's.

Speculation, the housing crisis and the effect on the North Shore market

The QS proposal presents itself as a response to the housing crisis. The party says it wants to discourage real estate speculation — quick buy-and-resell for a profit — by removing the tax advantage of the 50% inclusion rate. From the seller's perspective, it is worth distinguishing the speculator from the small long-term investor, because the measure as worded would hit both.

Speculator or wealth builder?

The "flipper" who buys, renovates quickly and resells within twelve months fully benefits from the current regime. But the owner of a Terrebonne triplex held for eighteen years, who housed families, maintained the building and counted on that appreciation for retirement, is not a speculator — and yet 100% inclusion would hit them squarely. That is the crux of the debate: a measure designed against speculation can, without nuance, penalize patient real estate savings.

The paradoxical effect on supply

The Premier raised the risk of discouraging small owners. The logic runs as follows: if selling costs far more in tax, some owners will choose not to sell. And every building that is not sold is a building that does not come back onto the market, which can reduce available supply — the opposite of the intended effect. This is one of the recurring arguments of landlord associations.

What it means for a North Shore seller

In markets like Terrebonne, Mascouche, Blainville, Saint-Jérôme or Saint-Eustache, where plex values have risen sharply, an owner considering a sale should reason on the current rules and their own horizon, without overweighting a hypothetical measure. Should the measure ever advance, the right reflex would stay the same: run the numbers, consult a tax advisor, and compare an ordinary sale with a direct sale with no broker.

From proposal to law: the Québec-federal harmonization puzzle

Why can we say, without being a fortune-teller, that nothing changes for now? Because between an opposition party's proposal and an actual change to the tax regime, the road is long — and, in this case, strewn with technical obstacles.

The inclusion rate is primarily a federal matter

The very concept of a "capital gains inclusion rate" is defined in the federal Income Tax Act. Québec, which collects its own income tax, traditionally harmonizes with those rules to avoid two competing definitions of the taxable gain. Creating a Québec inclusion rate different from the federal one — 100% in Québec, 50% in Ottawa — would raise considerable alignment difficulties for taxpayers and the administration. This is one of the technical obstacles cited by the government.

The normal path of a tax measure

1. Proposal: a party announces an intention (where the QS measure stands).
2. Government commitment: the governing party has to want to carry it — here, it explicitly rejected it.
3. Bill / budget measure: drafting, tabling, committee study.
4. Adoption and assent: a vote in the National Assembly.
5. Coming into force: an effective date, often with transitional rules.

The QS proposal is on the first step of that staircase, and the sitting government has already signalled its opposition. The 2024-2025 federal episode — a hike carried by the government, then deferred, then cancelled — is a reminder that a far more advanced measure can still fail. For a property seller, the conclusion is clear: watch without acting in a hurry.

If you are already decided to sell for reasons of your own — insufficient yield, management too heavy, a retirement plan — note that a direct offer from ImmoMulti within 48 hours spares you broker and commission, and leaves you all the time to validate your tax position with your own advisor before signing.

Informational content only. Does not constitute legal or tax advice. The Québec solidaire proposal described here is not a law in force. Consult a tax professional for your specific situation.