---
title: "Small Business Investment Rollover: 3 Years to Reinvest"
url: https://www.everstonecpa.com/tax-update/small-business-rollover-2027
description: "From 2027 the small business share rollover gives three years to reinvest sale proceeds, and five for SAFE-type agreements. See how the deferral works."
type: tax-update
updated: 2026-11-06
summary: "For dispositions from 1 January 2027, Budget 2026 proposes that sale proceeds can be reinvested in the year of sale or the following three years to defer the capital gain, or five years under a SAFE-type agreement. The shares must have been held at least 185 days, the asset test during ownership is relaxed to “primarily” (over 50%), and interest at the prescribed rate applies to any gain deferred but not reinvested."
faq_count: 2
publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta
service_area: British Columbia, Alberta, Ontario and Manitoba
language: en-CA
contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online
---

[Home](https://www.everstonecpa.com/) [Tax updates](https://www.everstonecpa.com/tax-updates) [Budget 2026](https://www.everstonecpa.com/tax-update/federal-budget-2026) Small business investment rollover

Capital gains

# Small business investment rollover: more time to reinvest

By EverStone CPA · Updated November 2026

If you sell shares of a small Canadian business and reinvest in another, you can defer the gain. Budget 2026 proposes giving you much longer to reinvest.

**Quick answer:** For dispositions from 1 January 2027, Budget 2026 proposes that sale proceeds can be reinvested in the year of sale or the following three years to defer the capital gain, or five years under a SAFE-type agreement. The shares must have been held at least 185 days, the asset test during ownership is relaxed to “primarily” (over 50%), and interest at the prescribed rate applies to any gain deferred but not reinvested.

**Selling shares in a private company?** We map the reinvestment options and deadlines before you close the sale. [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=advisory#enquiry-form)

**Announced, not yet law** · Dispositions on or after 1 January 2027 (proposed)
This has been announced but is not yet law. It can change or be withdrawn.

## Example

Tom sells shares in a small manufacturer in 2027 for a $300,000 gain and reinvests the proceeds in another eligible small business in 2029. Under the proposal the reinvestment is within the window, so the gain can be deferred until he sells the new shares. If he reinvested only part, interest would be charged on the deferred amount he did not reinvest.

Gains you want to eliminate rather than defer may suit the [Canada Growth Incentive](https://www.everstonecpa.com/tax-update/canada-growth-incentive) or the [lifetime capital gains exemption](https://www.everstonecpa.com/tax-update/lifetime-capital-gains-exemption) instead.

Whether this applies to you depends on your year-end and structure; [ask about your own situation](https://www.everstonecpa.com/quick-question) and a CPA replies by email, usually the same business day, free.

## Common questions

**How long do I have to reinvest?**

The year of sale plus the following three calendar years, under the proposal, or five years with a SAFE-type agreement.

**When does it start?**

For dispositions on or after 1 January 2027, if enacted.

## Where this comes from

Budget 2026 was tabled on 5 November 2026. Figures on this page are from:

- [Thor — 2026 Federal Budget: key tax measures](https://www.thor.ca/blog/2026/11/2026-federal-budget-key-tax-measures/)

- [BLG — Federal Budget 2026: tax measures](https://www.blg.com/en/insights/2026/11/federal-budget-2026-sovereignty-strategic-investment-and-tax-simplification)

- [RBC Wealth Management — Federal budget 2026 overview](https://www.rbcwealthmanagement.com/en-ca/insights/federal-budget-2026-an-overview-of-key-measures-that-may-impact-you)

**General information, not tax advice.** Budget measures are proposals until enacted and can change. Before deciding anything, [send an enquiry](https://www.everstonecpa.com/book-online?service=advisory#enquiry-form).

[Federal Budget 2026: what changes for small business owners](https://www.everstonecpa.com/tax-update/federal-budget-2026)
[Canada Growth Incentive: up to $15 million of tax-free gains](https://www.everstonecpa.com/tax-update/canada-growth-incentive)
[Farm and fishing rollover: nieces and nephews from 2027](https://www.everstonecpa.com/tax-update/farm-rollover-nieces-nephews)

---
Source: https://www.everstonecpa.com/tax-update/small-business-rollover-2027
Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online