Tax changes drive surge in commercial real estate deals

The recent changes in capital gains taxes have spurred a surge in commercial real estate activity, according to Financial Post.

Colliers Canada reported that these changes, which took effect on June 25, led to a significant increase in asset sales. Property owners rushed to divest before the new tax rules applied, resulting in Colliers closing 156 deals from June 1 to June 30.

This number represents a 26 percent increase compared to June 2023 and marks the highest number of June transactions in a decade.

Adam Jacobs, the national head of research at Colliers, highlighted the impact of the tax change. He noted, “It was a big surprise for us, of course, because the commercial market was down.”

“Everyone had an opportunity to do a deal at the old capital gains tax, so I think that was what we saw people do: ‘I think I’ll just cash out now and do the deal before I have to deal with more taxes in the future.’ It’s already a difficult market, and it’s getting more difficult,” he continued.