Canada Capital Gains Tax Calculator 2026
Tax on selling stocks, crypto, a rental property or cottage at the 50% inclusion rate stacked on your income in every province, with the principal residence exemption, losses, CCA recapture, the lifetime exemption and the saving from splitting a sale across years.
| Capital gain | — |
|---|---|
| Principal residence exemption | — |
| Net capital gain after losses | — |
| Taxable capital gain (50%) | — |
| Tax on the gain | — |
| Effective rate on the gain | — |
| CCA recapture (rental property) | — |
| After-tax proceeds | — |
| Splitting the sale across two years | — |
| OAS clawback warning | — |
In short
Half of a capital gain is added to income and taxed at your marginal rate in Canada (the proposed two-thirds inclusion rate was cancelled in March 2025), so the effective rate on a gain tops out at about 26.8% in Ontario; a $220,000 gain on a rental condo stacked on $110,000 of Ontario income costs about $49,800, while a principal residence is exempt and the lifetime exemption shelters $1.25 million of qualified small-business or farm gains.
Who this is for: Investors and property owners selling stocks, crypto, a rental or a cottage who need the tax before deciding when and whether to sell.
Capital gains tax in Canada: the 50% inclusion rate and the exemptions that matter
Canada has no separate capital gains rate: half of the gain (proceeds − adjusted cost base − selling costs) is added to your income and taxed at your marginal federal and provincial rates. At the top Ontario rate of 53.53% that works out to 26.76% of the gain; at a $100,000 income it is closer to 20%. The 2024 budget's proposed two-thirds inclusion rate above $250,000 was cancelled in March 2025 and the rate remains 50% for 2026.
- Principal residence: the gain on your home is exempt for the years designated (the "plus one" rule covers a move year) — you must still report the sale on Schedule 3. A family can designate only one property per year, so cottage owners choose which to shelter.
- Rental property: besides the gain, any capital cost allowance claimed is "recaptured" as fully taxable income when the sale price exceeds the depreciated cost.
- Losses: allowable capital losses offset taxable gains in the year, back three years or forward indefinitely; the superficial-loss rule denies losses on securities rebought within 30 days.
- Lifetime capital gains exemption: $1.25 million on qualified small business corporation shares and farm or fishing property.
- Timing tools: closing in January defers tax a year; a capital gains reserve spreads a gain over up to five years when the price is paid in instalments; donating appreciated securities to charity eliminates the gain entirely.
See also: Canada Income Tax Calculator 2026 — All Provinces, OAS Clawback Calculator 2026.
Assumptions
- Gain = proceeds − ACB − selling costs; principal residence exemption = gain × (years designated + 1) ÷ years owned; LCGE up to $1.25m for qualified shares/farm; losses applied before the 50% inclusion.
- Tax = tax at (income + taxable gain [+ recapture]) − tax at income using the 2026 federal + provincial engine; CCA recapture = min(CCA, proceeds − costs − undepreciated cost) taxed in full.
- Split comparison taxes half the taxable gain in each of two years; OAS warning uses the $95,323 threshold.
Worked example
Gain $220,000 → taxable capital gain $110,000 stacked on $110,000 of income. Tax on the gain about $49,800 (45.3% average on the taxable half = 22.6% of the gross gain) — net proceeds roughly $570,200. Splitting the gain across two tax years would save about $2,500; and the gain lifts net income to $220,000, so an OAS recipient would lose 15% of the excess over $95,323.
Frequently asked questions
What is the capital gains tax rate in Canada in 2026?
There is no flat rate — 50% of the gain is added to income and taxed at your marginal rate, so the effective rate on the gain ranges from about 10% at low incomes to 26.76% at the top Ontario bracket (27.4% in BC, 24% in Alberta).
Did the capital gains inclusion rate go up to two-thirds?
No — the June 2024 proposal was never passed; the government cancelled it on 21 March 2025 and the inclusion rate stays at 50% for all taxpayers in 2026.
Do I pay capital gains tax when I sell my house?
Not on a principal residence designated for all the years you owned it, but you must report the sale on your return; a cottage or second home is taxable unless you designate it instead of your house.
How are capital gains on a rental property taxed?
Half the gain is taxable at your marginal rate, and any CCA (depreciation) you claimed is fully recaptured as income in the year of sale; selling costs and capital improvements reduce the gain.
Can I avoid capital gains tax on stocks?
Hold them inside a TFSA, RRSP or FHSA; offset gains with losses (including carried-forward losses); donate appreciated securities to a registered charity (zero inclusion); or time sales across tax years and lower-income years.
Is crypto taxed as capital gains in Canada?
Usually — 50% of the gain on each disposal (sale, swap, spending) is taxable; frequent trading or mining can be treated as business income taxed in full.
Is there a capital gains tax exemption on inherited property?
The estate is deemed to have sold at fair market value on death (gain taxed in the final return, except a principal residence or a rollover to a spouse); the heir then starts with that value as their cost base.
How does the capital gains reserve work?
If you receive the sale price over several years, you can defer part of the gain to the years the money is received — at least 20% must be brought in each year, so a maximum five-year spread.
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