Capital Gains Tax Calculator
Calculate the tax on your investment gains. Canada's 50% inclusion rate means only half your capital gain is added to your taxable income — there is no separate capital gains tax and no holding-period discount.
Capital Gain Details
Capital Gains Tax Summary
Effective Rate on Gain
15.0%
Combined Marginal Rate
29.6%
How it works: Only 50% of your capital gain is included in your taxable income. This "taxable gain" is then taxed at your marginal rate. The Lifetime Capital Gains Exemption (LCGE) of $1,250,000 applies only to qualified small business corporation shares and qualifying farm/fishing property.
How capital gains tax works in Canada
Canada has no standalone capital gains tax. When you sell capital property for more than it cost, half of the profit — the "taxable capital gain" — is added to your income for the year and taxed at your combined federal and provincial marginal rate. This 50% inclusion rate applies regardless of how long you held the asset, which is a key difference from countries like Australia and the UK that reward longer holding periods.
Because the taxable half is stacked on top of your other income, the rate you actually pay depends on your total earnings. The effective capital gains rate is simply half your marginal rate: a gain taxed at a 30% marginal rate costs 15%; a gain taxed at Ontario's top combined rate of about 53.5% costs roughly 26.8%. A large gain can also push part of your income into a higher bracket, so the effective rate may be a blend. For exact bracket figures, use the income tax calculator.
Worked example: selling shares
- Bought shares for $20,000, sold for $50,000 — proceeds $50,000.
- Buy and sell commissions total $100 — these are part of ACB / outlays.
- Capital gain: $50,000 − $20,000 − $100 = $29,900.
- Taxable capital gain (50% inclusion): $14,950.
- If your marginal rate is 43.4%, additional tax ≈ $6,488.
- At a 0% inclusion rate this would be tax-free — the inclusion rate, not a separate rate, is what creates the bill.
Adjusted cost base (ACB): get this right first
Most reporting errors come from a wrong ACB, not a wrong rate. Your ACB is the cost the CRA measures your gain against, and it is more than the purchase price. For shares and ETFs it includes brokerage commissions on purchase. For real estate it includes land transfer tax, legal fees, and the cost of capital improvements (a new roof or addition — not routine repairs). Reinvested distributions and return-of-capital adjustments also change the ACB of a fund over time.
The averaging rule. When you own identical properties — for example, the same stock bought in several lots — the CRA requires you to pool them and use the average cost per unit. You cannot cherry-pick the highest-cost lot to minimise a gain. If you bought 100 shares at $10 and 100 at $20, your ACB is $15 per share for all 200, and selling 100 produces a gain measured against $1,500, not against either original lot.
Capital losses, the superficial loss rule, and carryovers
Allowable capital losses (50% of the actual loss, matching the inclusion rate) can only be applied against taxable capital gains — never against salary, business, or other ordinary income. If your losses exceed your gains in a year, the net capital loss can be carried back up to 3 years to recover tax already paid on past gains, or carried forward indefinitely.
The superficial loss trap. Tax-loss selling only works if you respect the 30-day rule. Under s 54 ITA, a loss is denied if you — or an affiliated person, including your spouse, a corporation you control, or your own RRSP or TFSA — buy the identical property within 30 days before or after the sale and still hold it at the end of that window. The denied loss is not lost forever: it is added to the ACB of the repurchased property, so you recover the benefit when you eventually sell. To crystallise a loss cleanly, switch to a similar-but-not-identical holding (for example, one bank's shares for a different bank, or one broad-market ETF for a different provider's equivalent).
Loss application order
- 1. Net current-year capital losses against current-year capital gains.
- 2. Carry any net loss back up to 3 years against prior taxable gains (Form T1A).
- 3. Carry the remainder forward indefinitely until you have future gains.
- 4. Losses never touch ordinary income, even after decades.
The tax-loss selling calculator models the 30-day superficial-loss window and the tax saved by harvesting before year end.
Exemptions and deferrals worth knowing
Principal Residence Exemption
Gains on your principal residence are fully exempt for every year you designate it. You must still report the sale on Schedule 3 and Form T2091 (mandatory since 2016). Only one property per family unit qualifies per year, which matters when you own both a home and a cottage. This calculator does not apply the exemption — enter non-principal-residence gains only.
Lifetime Capital Gains Exemption
Up to $1,250,000 of gains on qualified small business corporation shares and qualified farm or fishing property is exempt. The limit rose to $1.25M on 25 June 2024 and resumes indexation in 2026. Eligibility tests are strict (the asset, holding period, and active-use conditions). See the LCGE calculator.
Capital gains reserve
If you receive sale proceeds over several years, you can defer recognising the gain in proportion to the unpaid amount — generally over a maximum of 5 years (10 for some farm, fishing, and family share transfers). The capital gains reserve calculator spreads the gain.
Deemed dispositions
Some events trigger tax without a sale: death (property is deemed sold at fair market value), emigration (departure tax), and gifting (deemed disposed at FMV). See the deemed disposition and departure tax calculators.
The 2024–2026 inclusion-rate change — and why it's still 50%
Confusion persists because the increase was announced, deferred, and then cancelled in the span of nine months. Here is the timeline:
- June 2024 budget: proposed raising the inclusion rate to 66.67% on individual gains above $250,000 per year, and on all corporate and most trust gains, from 25 June 2024.
- 31 January 2025: the government deferred the start date to 1 January 2026.
- 21 March 2025: the increase was cancelled entirely. All capital gains stay at the 50% inclusion rate.
- Kept: the higher $1,250,000 LCGE limit was retained.
If you filed or planned around the proposed two-thirds rate in early 2025, the cancellation means no $250,000 threshold applies and the flat 50% inclusion is correct for 2025 and 2026. For a side-by-side comparison with the scrapped proposal, see the Capital Gains 2026 Canada page.
What this calculator includes
- Capital gain from proceeds, cost base, and selling costs
- 50% inclusion rate on the taxable portion
- Federal + provincial marginal-rate treatment
- Effect of the gain on your total tax position
Not included — use the linked tools
- Principal residence exemption (enter taxable gains only)
- LCGE, capital gains reserve, departure tax (separate calculators)
- ACB averaging across multiple lots
- Net capital loss carryback / carryforward
This is a simplified estimate. Your actual outcome depends on your full-year income, other gains or losses, and your province of residence.
Frequently asked questions
What is the capital gains inclusion rate in Canada?
Canada's capital gains inclusion rate is 50%, meaning only half of your capital gain is added to your taxable income. The taxable portion is then taxed at your marginal federal and provincial rate. A proposed increase to 66.67% was cancelled by the federal government on 21 March 2025, so the 50% rate applies to all gains regardless of size.
How are capital gains taxed in Canada?
Only 50% of your capital gain is taxable. This taxable half is added to your other income and taxed at your combined federal and provincial marginal rate. There is no separate capital gains tax and no holding-period discount — the same 50% inclusion applies whether you held the asset for one month or twenty years.
What is the effective capital gains tax rate in Canada?
Because only half the gain is taxed, the effective rate is half your marginal rate. At the top combined Ontario rate of roughly 53.5%, a capital gain is taxed at about 26.8%. In lower brackets the effective rate falls well below 15%. There is no flat capital gains rate — it tracks your total income for the year.
Is the sale of my home taxable in Canada?
No. Gains on the sale of your principal residence are fully exempt under the Principal Residence Exemption. You must still report the sale and designate the property as your principal residence on Schedule 3 and Form T2091 — required since 2016 even when the gain is fully exempt. Only one property per family unit can be designated for any given year.
What is the Lifetime Capital Gains Exemption (LCGE)?
The LCGE shelters up to $1,250,000 of capital gains on qualified small business corporation (QSBC) shares and qualified farm or fishing property. The $1.25M limit took effect 25 June 2024 and resumes indexation in 2026. Use the LCGE calculator to check eligibility and the remaining limit.
Was the capital gains inclusion rate increased to 66.67%?
No. The June 2024 federal budget proposed raising the inclusion rate from 50% to 66.67% on individual gains above $250,000 (and on all corporate and most trust gains). The change was deferred in January 2025 and then cancelled on 21 March 2025. The inclusion rate remains 50% for all capital gains.
How do I calculate my capital gain?
Capital gain = proceeds of disposition − adjusted cost base (ACB) − outlays and expenses. Proceeds are what you received on sale. ACB is your original cost plus acquisition costs (commissions, legal fees) and certain adjustments. Outlays include selling commissions and legal fees. For identical securities, the ACB is the average cost of all units you hold.
What happens if I make a capital loss?
Allowable capital losses (50% of the loss) can only offset taxable capital gains, never ordinary income such as salary. Unused net capital losses can be carried back up to 3 years and carried forward indefinitely. Watch the superficial loss rule: if you repurchase the same security within 30 days, the loss is denied and added to the ACB of the repurchased shares.
What is the superficial loss rule?
Under s 54 ITA, a loss is "superficial" and denied if you (or an affiliated person, such as your spouse or your RRSP/TFSA) buy the identical property within 30 days before or after the sale and still hold it at the end of that window. The denied loss is added to the ACB of the repurchased property, so you recover it on the eventual sale. The tax-loss selling calculator models the 30-day window.
How is cryptocurrency taxed in Canada?
The CRA treats crypto as a commodity. Disposing of it — selling for dollars, trading one coin for another, or spending it — is normally a capital gains event taxed at the 50% inclusion rate. Frequent, business-like trading can instead be taxed as 100% business income. See the crypto tax calculator for transaction-level treatment.
Do I pay capital gains tax when I leave Canada?
Yes — emigrating triggers a "deemed disposition" of most property at fair market value, creating capital gains on accrued but unrealized appreciation (departure tax). Some assets, such as Canadian real estate, are excluded. The departure tax calculator estimates the bill and the security you can post to defer payment.
Sources
For the 2024–2026 inclusion-rate timeline and a side-by-side comparison with the scrapped 2/3 proposal, see the Capital Gains 2026 Canada page. For tax-loss selling rules see the Tax-Loss Selling Calculator; for QSBC + farm/fishing exemption see the LCGE Calculator. If you are leaving Canada and need to know how the deemed disposition affects your unrealized gains, see the Departure Tax Calculator.
Got employee equity? See the Equity Compensation Hub for stock options, RSUs, and ESPP calculators.
Last updated June 2026. Reflects 2025 and 2026 tax year rules (50% inclusion rate, LCGE $1,250,000).