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.
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.
Capital Gains Tax in Canada
Canada taxes only 50% of capital gains — the "inclusion rate." The taxable half is added to your other income and taxed at your marginal rate.
Lifetime Capital Gains Exemption (LCGE): Up to $1,250,000 of gains from qualified small business corporation (QSBC) shares are exempt. Farm and fishing property also qualify.
Principal Residence Exemption: Gains on your principal residence are fully exempt. This calculator does not apply this exemption — enter only non-principal-residence gains.
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.
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. Your principal residence is exempt, and the Lifetime Capital Gains Exemption (LCGE) shelters up to $1,250,000 from qualified small business shares.
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 designate the property as your principal residence on your tax return for the years you lived there (Form T2091 — required since 2016 even when fully exempt).
Was the capital gains inclusion rate increased to 66.67%?
No. The federal government proposed increasing the inclusion rate from 50% to 66.67% on gains above $250,000, but Prime Minister Mark Carney cancelled the proposal on 21 March 2025. The inclusion rate remains 50% for all capital gains.
Sources
Last updated April 2026. Reflects 2026 tax year rates.
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