How much is capital gains tax in Canada?
Capital gains tax in Canada is the income tax on half of your profit from selling an investment or property. There is no separate capital gains rate: the taxable half is added to your income for the year and taxed at your normal federal and provincial rates. The effective rate on the whole gain is therefore half of your combined marginal rate, and it rises with your income.
This calculator follows CRA’s order. It works out the gain, applies the principal residence exemption, the flipping rule and any capital losses, multiplies by the 50% inclusion rate, and then taxes the result on top of your other income using the 2026 brackets for your province. It also shows the same sale in all 13 provinces and territories, at other income levels, and inside a TFSA or RRSP.
The answer is an estimate, not a tax return. Your exact figure depends on credits and deductions the calculator does not see, so check it against your own return or CRA My Account.
How do you use this capital gains tax calculator?
- Pick the type of property. Stocks, ETFs, mutual funds and crypto; a rental property or cottage; or your home.
- Enter the sale price. This is the proceeds of disposition, in Canadian dollars on the day of the sale.
- Enter the adjusted cost base (ACB). What you paid, including purchase commissions and, for real estate, capital improvements.
- Enter selling costs. Trading commissions, realtor commissions and legal fees paid to sell.
- Enter your other taxable income and province. Use the province you lived in on December 31 of the year of the sale.
- Choose the account. Non-registered, TFSA, or RRSP/RRIF. The account option applies to investments.
- For a home, add the years. Enter the tax years you owned it (count the purchase year and the sale year) and how many you designate as your principal residence. Tick the under-365-days box if you owned it for less than a year.
- Open “Capital losses” if you have any. Enter losses from other sales this year and the net capital loss balance on your latest notice of assessment.
The summary sentence gives the answer first. The cards show the tax, the gain, the taxable amount and your profit after tax, and the tables show every province, every income level and the account scenarios.
What is the capital gains inclusion rate in 2026?
The capital gains inclusion rate in 2026 is 50% for individuals. Section 38 of the Income Tax Act says a taxable capital gain is one-half of the capital gain, and an allowable capital loss is one-half of the capital loss. The consolidated Act, current to September 21, 2026, still reads that way.
The 2024 federal budget proposed raising the rate to two-thirds on an individual’s capital gains above $250,000 a year, starting June 25, 2024. CRA later reverted to the one-half rate while the government moved the start date to January 1, 2026. On March 21, 2025, the Prime Minister announced that the proposed increase was cancelled. It never became law, so there is no second tier: a very large gain is still taxed at 50% inclusion on every dollar.
| Period | Inclusion rate for individuals | Status |
|---|---|---|
| Current law (Income Tax Act, s. 38) | 50% | In force for 2026 |
| Proposed two-thirds rate on gains above $250,000 a year | Two-thirds | Cancelled March 21, 2025; never enacted |
| Loss balances from 2001 onward | 50% | Same rate as current gains, so no adjustment needed |
The same one-half rate applies to losses, which matters when you carry them forward. A net capital loss from any year since 2001 offsets a 2026 gain dollar for dollar at the same rate.
How is capital gains tax calculated?
Capital gains tax is calculated in two stages: first the gain, then the tax on the taxable part of it. CRA’s formula for the gain is the proceeds of disposition minus the adjusted cost base and the outlays and expenses of selling.
CRA’s own example on its line 12700 pages: shares sold for $6,500, with a $60 commission and an ACB of $4,000. The gain is $2,440, and 50% of it, $1,220, is the taxable capital gain reported on line 12700. The calculator reproduces that example exactly, and its tests check it.
The tax is the difference between two income tax calculations. The calculator works out your 2026 federal and provincial tax on your other income alone, then again with the taxable gain added, and subtracts one from the other. That way the gain is taxed in whichever brackets it actually lands in, including when it spills over into a higher one. The federal brackets it uses are these:
How to read this table: each rate applies only to the income between the previous threshold and this one; the last row has no upper limit. Half of a capital gain is added to income and taxed at these rates plus your provincial rates.
| Taxable income up to | Federal rate |
|---|---|
| $58,523 | 14% |
| $117,045 | 20.5% |
| $181,440 | 26% |
| $258,482 | 29% |
| — | 33% |
Source: Current year tax rates and income brackets (2026) — Canada.ca; Indexation adjustment for personal income tax and benefit amounts — Canada.ca; T4127 Payroll Deductions Formulas, 122nd edition (effective January 1, 2026) — BPAF formula; T4127 Payroll Deductions Formulas, 122nd edition (effective January 1, 2026) — Federal changes; Form TD1, 2026 Personal Tax Credits Return (PDF) — Canada.ca; Form TD1-WS, Worksheet for the 2026 Personal Tax Credits Return (PDF) — Canada.ca; Budget 2025 — Tax measures, supplementary information (Top-Up Tax Credit) — credit rate; Budget 2025 — Tax measures, supplementary information (Top-Up Tax Credit) — top-up years; Line 34990 – Top-up tax credit — Canada.ca; Bill C-4 (45-1), Making Life More Affordable for Canadians Act — LEGISinfo; Bill C-15 (45-1), Budget 2025 Implementation Act, No. 1 — LEGISinfo; Bill C-15 (45-1), royal assent text, section 125 — new Income Tax Act subsection 118(11) Top-up tax credit. In effect from January 1, 2026 to December 31, 2026; checked September 29, 2026.
Your province adds its own brackets on top; Ontario’s are shown below. Because only half of the gain is taxable, each rate in these tables applies to capital gains at half strength.
How to read this table: Ontario also charges a surtax on higher basic provincial tax and the Ontario Health Premium; the calculator includes both. The last row has no upper limit.
| Taxable income up to | Ontario rate |
|---|---|
| $53,891 | 5.05% |
| $107,785 | 9.15% |
| $150,000 | 11.16% |
| $220,000 | 12.16% |
| — | 13.16% |
Source: Current year tax rates and income brackets (2026) — Canada.ca (all provinces and territories except Quebec); T4127 Payroll Deductions Formulas, 122nd edition (effective January 1, 2026) — Table 8.2 provincial basic amounts; T4127, 122nd edition — non-refundable credits use the lowest provincial or territorial rate; T4127, 122nd edition — surtax applies only to Ontario; T4127, 122nd edition — Ontario surtax (factor V1) for 2026; T4127, 122nd edition — Ontario Health Premium (factor V2); T4127, 122nd edition — Manitoba 2026 basic personal amount and brackets (not indexed); T4127, 122nd edition — Manitoba basic personal amount phase-out (BPAMB formula); T4127, 122nd edition — Yukon basic personal amount mirrors the federal amount; T4127, 122nd edition — federal BPAF formula (used for Yukon); T4127, 122nd edition — Alberta credit rate (8%) and supplemental credit (factor K5P); T4127, 122nd edition — Prince Edward Island basic personal amount; T4127, 122nd edition — Saskatchewan basic personal amount; T4127, 122nd edition — Nova Scotia basic personal amount no longer income-tested; T4127 Payroll Deductions Formulas, 123rd edition (effective July 1, 2026) — British Columbia lowest rate; T4127, 123rd edition — British Columbia annual (non-prorated) credit rate, Option 2; T4127, 123rd edition — Newfoundland and Labrador basic personal amount; Personal Income Tax — Newfoundland and Labrador Department of Finance (2026 rates and credits); Personal income tax rates — Province of British Columbia (2026 tax year); Basic tax credits — Province of British Columbia (2026 base amounts); T4127, 123rd edition — Prince Edward Island new bracket above $200,000; T4127, 123rd edition — no July 2026 changes for the other provinces and territories; Personal Income Taxes — Manitoba Finance (indexation paused from 2025); Information Bulletin 126 — Taxation Changes, Budget 2026 (PDF) — no personal income tax bracket changes; Form MB428, Manitoba Tax 2025 (PDF) — frozen thresholds as used on the return; Form ON428, Ontario Tax 2025 (PDF) — Ontario health premium chart; Health premium — Ontario.ca; Worksheet AB428, 2025 (PDF) — Alberta supplemental tax credit; Income Tax Rates — Revenu Québec (2026); Employers: Principal Changes for 2026 — Revenu Québec (Québec basic personal amount); TP-1015.F-V (2026-01), Formulas for calculating source deductions (PDF) — Québec credit conversion rate; Parameters of the Personal Income Tax System for 2026 (PDF); T4032-QC Payroll Deductions Tables, January 2026 — general information (Quebec abatement); Quebec Abatement — Canada.ca. In effect from January 1, 2026 to December 31, 2026; checked September 29, 2026.
What does a worked example look like?
Take an investor in Ontario with $85,000 of other taxable income who sells ETF units in a non-registered account for $40,000. The units cost $25,000 (their ACB), and the trade commission was $10.
| Step | Amount |
|---|---|
| Capital gain | $14,990 |
| Taxable capital gain (50% inclusion) | $7,495 |
| Federal tax on it | $1,536 |
| Ontario tax on it | $686 |
| Total tax on the sale | $2,222 |
| Effective rate on the gain | 14.8% |
| Profit after tax | $12,768 |
The effective rate is half of this investor’s combined marginal rate of 29.65%. Had the same $14,990 been salary or interest, it would have cost about $4,538 in tax, roughly double.
How much capital gains tax would you pay in each province?
Capital gains tax differs by province because each province taxes the taxable half at its own rates. Here is the worked example, the same $14,990 gain on top of $85,000 of other income, in every province and territory:
| Province or territory | Tax on this sale | Effective rate on the gain |
|---|---|---|
| Nunavut | $2,061 | 13.7% |
| British Columbia | $2,114 | 14.1% |
| Northwest Territories | $2,181 | 14.5% |
| Yukon | $2,211 | 14.7% |
| Ontario | $2,222 | 14.8% |
| Alberta | $2,286 | 15.2% |
| Saskatchewan | $2,473 | 16.5% |
| Manitoba | $2,492 | 16.6% |
| New Brunswick | $2,586 | 17.2% |
| Newfoundland and Labrador | $2,664 | 17.8% |
| Quebec | $2,707 | 18.1% |
| Prince Edward Island | $2,781 | 18.5% |
| Nova Scotia | $2,786 | 18.6% |
The spread is $725 on a mid-sized gain, and it widens as gains grow and reach the top brackets. Quebec residents file a separate provincial return with Revenu Québec; the federal figure already reflects the Quebec abatement. For the full rate tables, see the guide to federal and provincial tax brackets for 2026.
How does your other income change the tax on a capital gain?
Your other income decides which brackets the taxable half lands in, so the same gain costs more in a high-income year. Here is the worked example’s $14,990 gain in Ontario at different levels of other income:
| Other taxable income | Tax on the gain | Effective rate on the gain |
|---|---|---|
| $0 | $0 | 0% |
| $30,000 | $1,517 | 10.1% |
| $60,000 | $2,222 | 14.8% |
| $90,000 | $2,270 | 15.1% |
| $120,000 | $3,254 | 21.7% |
| $180,000 | $3,570 | 23.8% |
| $250,000 | $3,734 | 24.9% |
This is why timing matters. A sale in a year with lower income, such as a sabbatical, parental leave or the first year of retirement, can cost much less. Splitting a sale across two tax years also helps when a large gain would push income into a higher bracket. Selling $60,000 of units with a $20,000 ACB on top of $110,000 of Ontario income costs about $8,222 in one year, versus about $7,762 spread over two, because the single sale crosses from the federal 20.5% bracket into the 26% bracket. Market prices can move between the two sales, so the saving is not guaranteed.
Do you pay capital gains tax when you sell your home?
You usually do not pay capital gains tax on your home. CRA says that if the property was solely your principal residence for every year you owned it, you do not pay tax on the gain. You still have to report the sale and the designation on Schedule 3, and CRA only allows the exemption when the sale is reported.
Only one home per family can be designated for each year. When a home was a rental, a cottage or otherwise not designated for some years, the Income Tax Act exempts a share of the gain equal to one plus the designated years, divided by the years owned. The extra year (the “plus one” rule) covers the year you sell one home and buy another.
Take a home owned for 12 tax years, designated for 8 of them, bought for $550,000, and sold for $950,000 with $40,000 of selling costs, by an Ontario owner with $90,000 of other income:
| Step | Amount |
|---|---|
| Capital gain | $360,000 |
| Exempt share | 75%, or $270,000 |
| Taxable capital gain | $45,000 |
| Tax on the sale | $16,652 |
The residential flipping rule works differently. A housing unit in Canada owned for less than 365 consecutive days is treated as business income, fully taxable, with no principal residence exemption, unless the sale was caused by a listed life event such as a death, a separation or an involuntary job loss. Tick the under-365-days box to see that treatment.
Are capital gains taxed in a TFSA or RRSP?
Capital gains are not taxed inside a TFSA, RRSP or RRIF, and they are not reported on your return. CRA says income earned in a TFSA, including capital gains, is generally tax-free, even when you withdraw it. Gains on investments held in a TFSA therefore fall outside the tax on this page, although CRA taxes income from a business carried on inside a TFSA, such as frequent trading. See how a TFSA works for the contribution rules.
An RRSP shelters growth only while the money stays in the plan. Withdrawals are taxed in full as ordinary income, so a gain made in an RRSP is eventually taxed at 100%, not 50%, though the contributions were deducted when made. In the worked example, withdrawing an amount equal to the $14,990 gain would cost about $4,538 at the same income. The guide to choosing between a TFSA and an RRSP weighs the two.
How do capital losses reduce capital gains tax?
Capital losses reduce capital gains first in the year they happen. If your allowable losses (half of each loss) are larger than your taxable gains, the excess becomes a net capital loss. CRA lets you carry a net capital loss back to any of the three previous years, with Form T1A, or forward to any future year. It can only offset taxable capital gains, not salary or interest.
The calculator takes both kinds: capital losses from other sales in the same year (enter the full loss) and the unapplied net capital loss balance on your latest notice of assessment (already the taxable half). It applies them in that order and tells you what is left to carry forward.
Watch the superficial loss rule. A loss is denied if you, or a person affiliated with you such as a spouse, buy the same or identical property in the period from 30 calendar days before to 30 calendar days after the sale, and still hold it after those 30 days. The denied loss is added to the ACB of the new purchase instead.
What are common mistakes with capital gains tax?
- Forgetting purchase commissions and reinvested distributions in the ACB. Both raise your cost base and lower the gain. Using only the price paid overstates the tax.
- Using the wrong ACB for shares bought over time. Canada uses the average cost of identical properties, not first-in-first-out.
- Mixing currencies. CRA wants the proceeds converted at the exchange rate on the sale date and the ACB at the rate when you bought, so US stock gains can differ from the US-dollar gain. See the guide to buying US stocks from Canada.
- Not reporting a home sale. The exemption is only allowed when the sale and designation are reported on Schedule 3.
- Assuming the two-thirds rate applies. It was cancelled; every dollar of an individual’s gain is included at 50%.
- Selling at a loss and rebuying within 30 days. The superficial loss rule denies the loss.
- Claiming a loss on a cottage or other personal-use property. The Income Tax Act sets a loss on property used mainly by you or your family at nil; only a loss on a rental or other investment property counts. The calculator flags this when real estate is sold at a loss.
- Moving investments into a TFSA or RRSP in kind at a loss. The transfer counts as a sale, but the loss is denied.
When should you talk to a tax professional?
Talk to a tax professional when the sale is large, unusual, or involves a business. Examples include selling a rental property on which you claimed depreciation (recaptured capital cost allowance is taxed as regular income), selling shares of a small business that might qualify for the lifetime capital gains exemption, a gain large enough to trigger the alternative minimum tax, property owned before 1972, or leaving Canada, which counts as selling most of your property.
For a straightforward sale of stocks or ETFs, most tax software handles Schedule 3; the comparison of free tax software in Canada shows which programs support it. This page explains how capital gains are taxed; it is not tax advice for your situation.