How are you protecting and growing your wealth in today’s changing economic and tax landscape? In this episode of Smart Advice, CIBC’s Carissa Lucreziano is joined by tax expert Jamie Golombek to discuss timely financial questions: how to keep more of what you earn, navigate new government policy changes, and optimize your investments — including real estate and cross-border assets. Learn actionable tax strategies to help secure your family’s financial future.
[02:24] Jamie: “No one knows what will happen. We are expecting a fall budget. I mean, the latest information we have from publicly available sources is that the budget will drop in October. We're going to wait and see what will be in that budget.”
[08:44] Jamie: “Take advantage of capital gains; the fact that we have the lowest rate, even lower than the rate on dividend income, which is also favorable because the dividend tax credit. Take advantage of it, both in your portfolios, your non-registered portfolios, as well as if you're doing any real estate investment.”
[16:55] Jamie: “Remember, you haven't actually sold it. There is no real money, but there is this sort of deemed disposition concept, and therefore you've got to come up with the cash to pay the tax.”
Jamie Golombek is the Managing Director of Tax and Estate Planning at CIBC. With more than 25 years of experience, he has become one of Canada’s most trusted voices on tax strategy and wealth preservation. His expertise spans tax policy, capital gains planning, property ownership, and intergenerational wealth transfer. Jamie is also a longtime contributor to the Financial Post, where his weekly column helps Canadians make sense of complex tax issues and apply them in practical ways.
Respected for his ability to simplify complicated topics, Jamie has appeared on BNN and CTV News. He has also been a frequent guest on podcasts and conferences across the country. His commentary bridges technical detail with everyday financial decisions, giving clarity to Canadians navigating taxes in real time. Through his work, he equips individuals and families with strategies to minimize costs, protect assets, and build wealth with confidence.
Connect with Jamie Golombek on his LinkedIn or CIBC Profile.
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Carissa Lucreziano: The key to maximizing wealth isn't just how much you earn, it's how much you keep. Smart tax strategies don't just lower your bill. They help you preserve wealth, stay aligned with your goals, and build lasting financial security.
Welcome to Smart Advice, a podcast connecting you with timely financial advice, investment strategies, and economic trends, empowering you with insights to make informed decisions about your money. I'm CIBC’s financial advice expert, Carissa Lucreziano.
They say there are only two things you can count on in life: death and taxes. Now we can't do much about the first one, but when it comes to taxes, the right planning can make all the difference
The key to maximizing wealth isn't just how much you earn, it's how much you keep. Smart tax strategies don't just lower your bill. They help you preserve wealth, stay aligned with your goals, and build lasting financial security.
In today's episode, we are joined by Jamie Golombek, Managing Director, Tax and Estate Planning at CIBC.
With more than 25 years of experience, he's become one of the country's most trusted voices in tax and estate planning. Writing a weekly column in the Financial Post, appearing regularly on BNN and CTV News, and joining countless podcasts, including this one, as one of our first guests back in season one.
We are going to explore potential tax policy changes on the horizon, the ripple effect of the proposed increase to the capital gains inclusion rate, and key considerations around property ownership and major life transitions. If you are serious about building, protecting and growing your wealth, this is a conversation you won't want to miss.
Jamie, welcome to the Smart Advice Podcast. It is so great to have you back.
Jamie Golombek: It's great to be back. I look forward to our chat today.
Carissa: Jamie, today, we want to focus on some of the bigger challenges or issues Canadians are really thinking about. How government policy will shape their ability to build and preserve their wealth for them and their family.
With Prime Minister Mark Carney bringing his expertise into government, what shifts do you think will fold into tax policy? And, as we anticipate the federal budget, which I know you're very much involved in, where do you expect the government to put its focus?
Jamie: Lots to talk about, lots to unpack there.
No one knows what will happen. We are expecting a fall budget
I do anticipate that taxes will not be going down. They did introduce a recent tax cut for the lowest bracket, which wasn't exactly as people were hoping. Not only did the tax rate drop for the lowest bracket, but the value of all the non-refundable credits also dropped, so people's benefits were not as great as they might have first seemed, depending on how many credits that you had that are now worth less. I'm not sure we're going to see another rate cut there.
If anything, it's possible they could increase the regular income tax bracket for the very high income. I'm not encouraging them to do that, because I really do think that our tax rates are simply too high once you get over a 50% marginal rate at the high end. I believe it's a real economic disincentive to productivity and to working harder and longer and things like that. But at the end of the day, we'll have to wait and see, a number of items could be on the table.
Things like the limited principal residence exemption, which we have in Canada, which is, again, currently unlimited. Could they do something there? But we are looking very carefully towards the fall.
The government obviously needs to bring the deficit down. Aside from spending cuts, we need to see what areas of tax policy they're going to address, and hopefully, it will be productive. Again, we're waiting to see what's going to happen.
Carissa: The increase to the capital gains inclusion rate was one of the biggest tax headlines last year. It led many Canadians to accelerate the sale of their businesses, properties and investments before the June 25 deadline, just to take advantage of the lower rate. We saw this widely reported in the media, with accountants, tax advisors, legal professionals noting a surge in transactions.
Now that the increase has been canceled, how should Canadians be positioning themselves going forward, especially if they want to invest in real estate?
Jamie: This was probably our big topic until it was all canceled earlier this year. We honestly spent hundreds of hours talking to people, doing presentations and podcasts and writing all kinds of reports on the implications of an increase in the capital gains.
Just to recall everyone, the capital gain is a profit. It's a profit that you make on selling a property. That could be real estate property, that could be stocks or bonds or mutual funds, that you basically get proceeds greater than your cost, your adjusted cost base. That difference is a capital gain, and capital gains are taxed slightly differently than regular income.
Regular income is just taxable at your marginal tax rate, depending on what tax bracket you're in. But for capital gains, capital gains are taxed at a 50% inclusion rate. There was a proposal to bump that up to a two-thirds inclusion rate as of June of 25th last year, and because of a whole bunch of political problems that never got passed.
In fact, it was canceled and probably will not come back, at least anytime in this current government's mandate. I think the capital gains inclusion rate is fixed now at 50% there's good reasons for that, in terms of encouraging entrepreneurship and risk taking. The fact is that the value of assets increases every year to take into account inflation.
By taxing the gain at a reduced rate, you're saying, “Well, we're taking into account sort of inflation adjustments, as well as risk taking, entrepreneurship, and stuff like that.” There’s pros and cons to a capital gains inclusion rate.
The Carter commission famously said, “When tax reform came in the early 1970s, a buck is a buck is a buck, and therefore a dollar of income should be taxed the same as a dollar of gains.”
That was not adopted and ultimately, capital gains have always had a favorable rate. It was as high as 75%, but now we're at 50% inclusion rate. That being said, I think people should take advantage of it. That's what I'm telling them.
I'm saying, when you're looking at your portfolio, and of course, this is really only relevant in a non-registered account, right? Outside of your RSP, outside of your TFSA, outside of any of the other registered accounts, that's where you've got the capital gains tax coming in. People should take advantage of it.
When you're looking at a portfolio and you're structuring your investments, maybe you hold those capital appreciating assets in your non-registered account. When it comes to stocks that have a bigger propensity to go up in value, because only 50% of it is taxable.
From a real estate perspective, if you're speculating in real estate, again, this is other than your principal residence, which for now, at least has an unlimited tax free capital gain. But if you're buying a rental property or an income property, the opportunity now to realize not just rental income, which is highly taxable, and ultimately, the profit from a real estate transaction is now taxable at a 50% inclusion rate.
This means that in a province like Ontario, as an example, you're looking effectively at a tax rate of just over 26%. In other words, that's not bad. When you look at rates that could be 50% or more, depending on your province of residence, for rental income or other types of income. I think it's a positive sign that the inclusion rate was not increased.
I think we're going to be good for at least a few years on that, before anything is done. There was a huge uproar, of course, that it affected small businesses and professional corporations. I guess the message I would say is take advantage of it.
Take advantage of capital gains; the fact that we have the lowest rate, even lower than the rate on dividend income, which is also favorable because of the dividend tax credit. Take advantage of it both in your portfolios, your non-registered portfolios, as well as if you're doing any real estate investment
Carissa: Let’s dive a little bit more into property ownership. This is a big topic, and the thoughts and trends have shifted a little bit, and would love your perspective on it.
When it comes to owning or investing in property abroad, whether that's in the US or Europe, there are a few common pitfalls Canadians need to be aware of. Things like double taxation, foreign estate taxes, and how rental income gets reported. I know you've written a lot of pieces on this.
For someone who understands these, it can mean a huge difference, not only in taxes paid, but in the long term value that you're able to preserve. What should Canadians know before buying or selling or holding a property for legacy purposes abroad?
Jamie: It's very country specific, but I would say, in general, you really do want to get some good advice. Get Canadian tax advice from anyone that's knowledgeable in Canada.
But you also want to get local advice. Whether you're buying a place in California or Florida, it is good to speak to a US tax adviser as well. If you're buying something in Europe or buying something in Mexico, again, good idea to get local advice. I think if we want to generalize, it's actually quite basic.
As a resident of Canada, you're taxable on worldwide income. That means any income, from anywhere in the world, from any source, goes on your Canadian tax return. In other words, if you have a foreign rental property, let's say in Costa Rica, and you rent it out for a certain number of weeks or months a year, that income less expenses must be reported on your Canadian tax return.
If you sell the Costa Rican property, if you sell the Florida property, if you sell that European property, again, the capital gain on that is taxable on the foreign exchange gain on the return. The problem is that all of these foreign jurisdictions, unless you're in a tax haven, like an island like Cayman or something like that, most of these countries have their own system of taxation.
That means there is a potential for double tax, unless you understand the rules, and make sure that you're applying foreign tax credits.
Let me give you a quick example. The most common thing that we see with our clients is Canadians who have, let's say, a Florida vacation home. They have a Florida home, and this is something that is personal. They're using it as a vacation property. They have snowbirds. They go down there.
Ultimately they go to Florida, they use it, and they decide one day they're going to sell it. When you sell that property, the US has a right to tax that gain, because it's real estate first. You're going to pay US tax on that. But Canada will also tax the exact same gain. Luckily, you can get a foreign tax credit for the taxes paid in the US on your Canadian tax return.
You want to make sure that you're dealing with an accountant that really understands the cross border issues, to make sure you don't double end up reporting the tax, and that you get a full foreign tax credit. The one tricky point with that is foreign exchange.
For US purposes, the gain or loss is calculated. If it's a loss, you can't use it, by the way, because it's personal use property. But the gain is really what we're worried about, right? Because that's where you pay tax. The gain is simply US dollars.
If you bought it for 300,000, it's worth 350, and you sell, you have a 50,000 U.S dollar gain. No problem. In Canada, the gain must be reported in Canadian dollars. That means you need to convert the purchase price to Canadian dollars from the date of purchase and the sale price to Canadian dollars on the date of sale.
Given what's happened to the US, I was in New York this week, and the US Dollar was over 1.40 Canadian. If you bought a property 11 or 12 years ago, when the Canadian dollar was at par, not only did you make money in US dollars, but you're looking at a 40% appreciation of the US dollar against the Canadian dollar.
Your capital gain could be huge in Canada, much smaller in the US Therefore you won't have a full foreign tax credit to offset it. That's one thing to be careful about. The other thing, I'll just touch on very briefly, it applies to very few people, but potentially there could be US estate tax if you die owning the US property. Again, that's a whole other topic.
Carissa: Jamie, on the topic of intergenerational wealth, transfer tax implications, you mentioned estate planning. Again, that could be a whole other episode that we go into on estate planning.
One of the biggest things Canadians think about isn't just building wealth, but it's how to pass it on. Especially when it comes to the family cottage or vacation properties that carry so much emotional value, there's so many memories there. Right now, Canada is in the midst of a massive transition, with wealth moving between generations on a scale that we have not seen
What should Canadians be considering to make sure that their assets are passed down smoothly and taxed efficiently to their loved ones?
Jamie: Very big topic. I start with the soft stuff first. Let's talk about it. You mentioned, family cottage. You mentioned vacation property, things like that.
You got the family cottage. You love it, the kids love it, grandkids love it, etc. You want to transition to the next generation. But of course, there's costs of upkeep, and it could be capital gains tax when you die, or last-to-die between you and your spouse or partner.
The first thing I would actually ask is, if you want to pass it down. Do the kids actually want it? Which sounds crazy, but it's a really important discussion. I think you should have that discussion once the kids are of an age where you feel you can have a mature conversation with them.
Maybe they're in their 20s or 30s, or even later 40s, ask them, “Hey, we've got this cottage here. We're not going to live forever. You think we should sell it? Do you want to keep it in the family? If so, who wants it?” Maybe not all the kids want it. Some kids might have moved away, might have moved overseas. Some kids may not have the financial ability to take on the cottage.
There's all kinds of interesting planning ideas where parents, depending on their level of wealth, can set aside what we call a sinking fund. Where they've got extra cash that can be set aside, just to pay all the bills of the vacation property for years to come. Maybe one asset gets that, one child gets the cottage, another child gets other assets.
There's ways to do that, but I think the first question is, do the kids want it, right? And which kids want it? If so, do they get it equally? You get into the whole debate of, “Do you have a cottage sharing agreement or who gets to use it?” which we can use a lottery system. There's a whole bunch of planning that can be done around it.
From a tax perspective, the biggest issue is that when you die, you have a deemed disposition at fair market value. Potentially, there could be a massive capital gain on your family vacation property, and that tax needs to be paid right away. After the second to die between spouses or partners, the final tax return, you've got to come up with the cash to pay the tax on the deemed disposition.
Remember, you haven't actually sold it. There is no real money, but there is this sort of deemed disposition concept. Therefore, you've got to come up with the cash to pay the tax. Who's going to do that, right? That's where you get into much broader discussions about planning.
If you're thinking of buying a cottage, how do you own the cottage? Do you buy it singularly? Do you buy it jointly? Or, perhaps you consider something more complex, where you buy it in a family trust. The family trust owns it so that, in other words, when you die, there's no disposition.
There's downsides of a family trust. It's in the trust. You don't own it anymore. It's owned by the trustee. In Canada, trusts have a twenty-one-year deemed disposition. If you put a cottage into a family trust, and your kids are one, three, and five, and in 21 years comes around — you really want your 22 year old taking control of that if you distribute the property out of the trust?
There are more complicated issues to talk about. But I would start with a soft question. Have a family discussion. Who wants the family cottage? Who wants the vacation property? And ultimately, how are they going to pay for the upkeep of that afterwards? Then you can look at tax planning.
Carissa: You talked a little bit in this realm. It's about planning for a little bit of the equitability, the fairness, equalizing inheritance between children, is an important topic. When there's this, for example, the cottage or other big assets involved, what are some strategies that individuals can use to handle the tax side while still keeping things fair?
Jamie: Great question, and this comes up all the time. Most people, not everyone, tend to treat their children equally, assuming the children are responsible. Therefore they say, “Okay, well, if I give the cottage to Kid A, what about kid B?” That's very easy to do if you've got other assets.
For example, if you've got a vacation property worth a million, and you've got other assets worth a million. You can give them each 1,000,000. One person gets the portfolio, one person gets the cottage. But you gotta look at the tax consequences, right? What is the tax on the cottage? What is the tax on the transfer of the portfolio? Certainly, that's one thing to consider.
The other thing that people can do is use life insurance as a strategy. Where they invest in a life insurance policy that comes in on death, the joint last to die. Let's say the second to die of the spouses. Tax Free money comes into the estate. That money can be used to either equalize the estate by giving it to the child that's not getting the cottage, or can be used to perhaps cover off the tax liabilities on death.
These are all important considerations. This is something where it's important to sit down, not just with your tax advisor, your accountant, but also with a lawyer to make sure legally things are done effectively and done through the will.
Carissa: It's great advice. For me, I won't have this challenge. I have one son, but even in that case, there's a lot of things to think about, and some good planning and ongoing planning will make a lot of sense. Thanks for that.
Jamie, we have covered a lot of ground today. As we look ahead, what are some of the most important tips Canadians should be considering before the year end to maximize their tax savings, and as we've been talking about today, keep as much of their hard earned money in their pocket as possible?
Jamie: We'll just touch for a couple minutes on the year end stuff, because we have to remember the importance of planning all year round, not just on year end. There are some practical things that one can do in the last few months of the year. The normal stuff, like tax loss selling.
If you have any losses, markets are at an all-time high right now, you may not have a lot of losses, but maybe you've got a couple losers in the portfolio. You do some tax loss selling. Take those capital losses and then use those to offset other capital gains you had this year, or perhaps carry it back up to three years.
Then there's other things that you can do depending on your situation. The RRSP deadline is not until next year. You don't have to worry about that. A TFSA deadline, there is no deadline, because that room carries forward every year. But there may be opportunities in terms of contributing to something like a first home savings account, right?
Open up a first home savings account. If you're a first-time homebuyer, or if you want to help the kids, or even grandkids, once they're at least age of majority, save towards a first home. Putting in that $8,000 a year that you're allowed to do. Again, if you don't do it this year, then you've lost that opportunity until the following year. That's something that one certainly might want to look at.
Another big one, as we talk about every year, is charitable donations. The deadline is a hard deadline of December 31 to get those donations in there. Think of things like with the markets on such a tear this year, “Are we going to reconsider the opportunity to make a charitable donation of appreciated marketable securities?”
If you've got stocks that have done really well, or mutual funds that have done really well this year, what you can do is transfer those in kind to a registered charity. When you transfer it, you get a receipt, as long as you do it by December 31 for fair market value. Not only that, but you pay no capital gains tax on the appreciated gain as an incentive for giving it to charity.
Those are some of the things you want to think about, certainly before the end of the year. Ultimately, if you're a business owner, you want to look at compensation strategies, salary versus dividends. We've written many, many pieces on that type of thing.
You’ve got a few months left to figure this out, and the best idea, I think, is to speak to your advisor. Get some advice. Your accountant, your tax advisor, speak to your financial advisor. There's so many opportunities that people have to save taxes, not just at the end of the year, but throughout the entire year.
Carissa: Thank you so much, Jamie for that. I know you do a lot of work on educating Canadians on some of these topics we talked about and more. You can find Jamie's insights in his weekly column in the Financial Post.
Jamie, your website? Do you want to share it with our listeners?
Jamie: My website is very easy. It's just jamiegolombek.com. If you go on there, you're going to find every article I've written over 25 years every week in the Financial Post. You're also going to find links directly to the CIBC website, which has 140 publications on every single topic that we've talked about today, and way, way more.
Carissa: Jamie again, so great to have you back on the podcast.
For our listeners, if today's conversation got you thinking, that's the starting point. Wealth is built by being proactive, making strategic choices, and planning with the long game in mind.
Thank you for tuning in to Smart Advice. I'm Carissa Lucreziano.
If you enjoyed this episode, feel free to share it with your social network. To make sure you never miss an episode, follow Smart Advice on your favorite podcast platform. For more tips, tools, and financial advice, visit cibc.com/smartadvice. See you next time.