2026 Capital Gains Tax Calculator Canada

What is Capital Gains Tax in Canada?

A capital gain occurs when you sell an investment, such as stocks, mutual funds, ETFs or real estate, for more than it originally cost to purchase. The profit from the sale is subject to capital gains tax. This tax is owed in the year the capital gain is realized, meaning when the asset is actually sold or disposed of.

If the investment has not been sold, the gain is considered unrealized and no tax is owed. If a sale results in a loss (the value decreased since purchase), this is a capital loss, which can be used to offset other capital gains and reduce your tax bill.

This page is the hub for capital gains tax in Canada: the calculator, how a gain is taxed, effective rates, ways to lower the tax, and a page for each province and territory (listed below).

How Capital Gains Are Taxed in Canada

In Canada, only a portion of your capital gain is added to your taxable income, and that portion is taxed at your marginal tax rate together with your other income. The share that is taxed is the capital gains inclusion rate, currently 50% for every individual and every size of gain; a Budget 2024 proposal to raise it to two-thirds on larger gains was cancelled in March 2025.

Worked Example: Selling Stocks for a Capital Gain

The province and territory pages work their examples the same way for a gain added to a salary: the taxable part of the gain is taxed at the combined federal and provincial marginal rate for that income, because credits such as the basic personal amount have already been used against the salary.

Effective Capital Gains Tax Rates by Income Level

Because a capital gain is taxed at your marginal rate after the inclusion rate is applied, the effective rate on the whole gain is your combined federal and provincial marginal rate multiplied by 50%:

The same multiplication gives each province’s top capital gains rate in the province table below, and each province page shows the effective rate in every combined bracket. A capital gain is therefore taxed at a lower rate than the same amount of salary or interest at any income; how it compares with dividends is covered in dividends vs capital gains.

Capital Gains Tax Exemption on Principal Residence

The gain on a home is tax-free for each year you designate it as your principal residence: you or your family must have ordinarily lived in it that year, a family can designate only one home a year, and you report the sale on Schedule 3 and Form T2091; the exempt share is the years designated (while resident in Canada), plus one if you were resident in the year you bought it, divided by the years owned. The principal residence exemption guide covers who qualifies, the designation and partial exemptions.

Lifetime Capital Gains Exemption (LCGE)

The lifetime capital gains exemption shelters up to $1,275,000 of gains on qualified small business corporation shares and qualified farm or fishing property, once over a lifetime. The lifetime capital gains exemption guide explains which assets qualify and how the claim works.

Capital Losses: Offsetting Your Gains

A capital loss is first applied against your taxable capital gains of the same year; what is left becomes a net capital loss, which can reduce taxable capital gains in any of the three years before or in any future year, but usually can't be deducted from other income. You report it on Schedule 3, and request a carry-back on Form T1A rather than amending the earlier return. Selling investments at a loss on purpose to offset gains is covered in tax-loss harvesting, and a loss on property you or an affiliated person buy back within the window is denied under the superficial loss rule.

Capital Gains Tax Calculation Formula

The formula for calculating your capital gains tax is:

• Proceeds of Disposition − Adjusted Cost Base − Selling Expenses = Total Capital Gain
• Total Capital Gain × Inclusion Rate (50%) = Taxable Capital Gain
• Taxable Capital Gain × Marginal Income Tax Rate = Capital Gains Tax

Proceeds of Disposition

This is the amount you receive when you sell your capital property. You may deduct expenses directly related to the sale, such as real estate commissions, legal fees, or brokerage commissions.

Adjusted Cost Base (ACB)

Your adjusted cost base is the original purchase price of the asset plus any costs incurred to acquire it, such as legal fees or commissions on purchase. The adjusted cost base guide shows how to track it across several purchases and what can be added for real estate.

Ways to Lower Capital Gains Tax

Several rules change how much of a gain is taxed, or when:

1. Tax-sheltered accounts. Gains inside a TFSA, RRSP, FHSA or RESP are not taxed as capital gains while they stay in the account; TFSA and qualifying FHSA withdrawals are tax-free, while RRSP withdrawals are taxed as income.
2. Losses. Realized capital losses offset gains, as set out under tax-loss harvesting.
3. Timing. A gain is taxed in the year of the sale, so splitting a large sale across two calendar years spreads the taxable portion over two years of brackets.
4. Donating securities. Donating publicly traded securities directly to a registered charity removes the capital gain from income and earns a donation credit; see the charitable donation tax credit calculator.
5. Your home. The principal residence exemption removes the gain on a home designated for every year you owned it.

Registered vs Non-Registered Accounts for Capital Gains

Contribution room limits how much can go into the registered accounts; the TFSA calculator and RRSP calculator show the current limits, and the investment calculator projects growth in different account types.

Capital Gains Tax by Province

Each province and territory sets its own income tax brackets, so the combined marginal rate, and with it the capital gains rate, depends on where you live on December 31. Each page below has that jurisdiction’s effective rate in every combined bracket and a worked example: Ontario, British Columbia, Alberta, Quebec, Manitoba, Saskatchewan, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Yukon, the Northwest Territories and Nunavut.

Quebec is shown separately because Quebec residents’ federal tax is reduced by the refundable Quebec abatement of 16.5%. After the abatement, Quebec’s top combined rate is 53.31% and its top capital gains rate is 26.65%.