Canadian capital gains tax
Canada includes 50% of a capital gain in taxable income, then taxes it at your own rates. Enter the sale and the rest of your income to see what the gain costs.
What you sold it for.
What you paid, plus costs that add to the base.
Commission and other selling costs.
Income for the same year, which sets the rate on the gain.
Results
Proceeds less the cost base and selling costs.
From the 2025 CRA inclusion rate table.
The part added to your taxable income.
Tax on the gain divided by the whole gain.
Federal plus Ontario, measured with the gain already counted.
Assumptions
- The inclusion rate is 50%, the figure in the CRA inclusion rate table for 2025. That table has no later entry, and no legislated change applies for 2026.
- Other taxable income is income for the same year after deductions, which is what decides the rate the gain is charged at.
- The gain is stacked on top of that income, so it can be taxed across more than one bracket.
- Only the basic personal amount is applied. Other credits, the lifetime capital gains exemption, and the principal residence exemption are out of scope.
- A negative result is a capital loss. Losses offset capital gains rather than ordinary income, and the carry back and carry forward rules are not modelled.
- Alternative minimum tax is not applied. A large gain can trigger it.
Sources
- T4037 Capital Gains, inclusion rate table, Canada Revenue Agency, checked 30 August 2026
- Canadian income tax rates for individuals, current year, Canada Revenue Agency, checked 30 August 2026
The CRA inclusion rate table runs to 2025. No separate 2026 figure is published, and no legislated change applies for 2026.
How this works
A capital gain in Canada is not taxed at a rate of its own. Half of the gain is added to your taxable income for the year, and that half is then charged at whatever federal and provincial rates apply to you once it lands. The other half is not taxed at all, which is why the rate shown on the whole gain always comes out near half your marginal rate.
The gain itself is proceeds minus the adjusted cost base minus what it cost you to sell. The adjusted cost base is more than the purchase price: commissions paid on the way in, legal fees, and certain later costs all raise it, and a higher base means a smaller gain. Selling costs are subtracted separately in the same calculation.
Because the taxable half stacks on top of your other income, a large gain can push part of itself into a higher bracket. That is why the result changes when you change the other income figure even though the sale has not moved. The estimate measures tax twice, once without the gain and once with it, and reports the difference.
Several things sit outside this calculation. The principal residence exemption can remove the gain on a home entirely. The lifetime capital gains exemption applies to qualified small business shares and to farm or fishing property. Alternative minimum tax can apply where a gain is large relative to income. The income tax estimator shows the bracket by bracket detail behind the rates used here.