DT BLOG: Capital Gains Fear: Why It Costs Investors More Than Taxes Ever Will IMAGE: A calculator and a sticky note with "Capital Gains Tax" written on it, next to a blue notebook.For many real estate investors, capital gains tax feels like the silent threat lurking in the background.

It shows up when people think about selling.
It shows up when they consider investing.
And often, it shows up as a reason to do… nothing.

In a recent episode of LIFE’S Inside Track with Ken and Yetta Dekker, we slowed this conversation down because capital gains fear is one of the most misunderstood — and most expensive — mental blocks we see.

Not because tax doesn’t matter.
Because misunderstanding it can quietly limit long-term wealth.

Let’s bring clarity to the conversation.

Capital Gains: The Part Most People Miss

Capital gains tax only applies when you’ve made money.

In Canada, only 50% of the gain is added to your taxable income in the year you sell. That doesn’t mean 50% of your profit disappears. It means half of the growth is taxed at your marginal rate — not the full amount.

Here’s a simple example:

  • Buy an investment property for $200,000

  • Sell it years later for $400,000

  • Your gain is $200,000

  • Only $100,000 is taxable

  • If two owners are involved, that amount is split

When people hear “50% capital gains,” fear fills in the blanks before math ever gets a chance.

And fear is rarely a good financial advisor.

The Real Cost of Avoiding Capital Gains

Here’s where things get expensive.

Many investors hold properties they would never buy again today — not because they’re performing well, but because they don’t want to “trigger tax.”

Others never invest at all, convinced that paying tax somehow means losing.

The irony?
Avoiding tax often costs far more than paying it.

Holding an underperforming property can quietly drain opportunity:

  • Equity sits idle

  • Returns lag behind better options

  • Growth compounds slower — or not at all

Over 10, 15, or 20 years, that missed compounding can dwarf the original tax bill.

Selling Isn’t the Only Exit Strategy

Another common misconception is that selling is the only way out.

In reality, investors often have multiple exit options, including:

  • Refinancing to access equity

  • Repositioning or renovating to improve performance

  • Holding with intention and a future plan

  • Selling strategically when it aligns with life stage or goals

An “exit” doesn’t always mean leaving a property. Sometimes it means exiting the current structure while keeping the asset working for you.

The right choice depends on:

  • Your income stage

  • Your lifestyle goals

  • Portfolio balance

  • Risk tolerance

  • And future plans

There is no one-size-fits-all answer — only wise, informed ones.

Tax Avoidance vs Tax Efficiency

This distinction matters.

Tax avoidance is fear-driven.
It limits options and distorts decisions.

Tax efficiency is clarity-driven.
It works within the system to steward growth wisely.

Examples of efficiency can include:

  • Offsetting gains with eligible expenses

  • Using registered accounts strategically

  • Timing sales based on income years

  • Understanding how refinancing differs from selling

None of this eliminates tax entirely.
And that’s okay.

Taxes are part of participating in a functioning economy. The goal isn’t to avoid them — it’s to avoid overpaying through poor decisions.

Why Real Estate Grows Differently

One reason real estate remains such a powerful wealth-building tool is timing.

Capital gains are triggered when you sell.

That means:

  • Growth compounds uninterrupted

  • Equity builds without yearly tax erosion

  • Leverage amplifies long-term results

Compare that to interest-based investments, where tax is often paid every year before growth continues.

Real estate plays a longer, quieter game — and patience is rewarded.

When Clarity Changes Everything

Most people don’t need more advice.

They need:

  • A clearer understanding of their options

  • A calmer space to think

  • Better questions to bring to their accountant

  • And perspective that looks beyond the next year

That’s what these conversations are designed to provide.

If tax fear has been shaping your decisions from the background, it may be time to pause and re-examine what’s actually holding you back.

Because building wealth wisely through real estate isn’t about avoiding responsibility.

It’s about understanding it — and moving forward with confidence.