Capital gains tax calculator Canada
In Canada you're taxed on half of a capital gain, at your regular marginal rate. Pick your province and enter your income to see exactly what a gain would cost in 2026 — the taxable portion, the marginal rate that actually applies, and what you keep after tax.
Your numbers
Top capital gains tax rate by province (2026)
The highest rate you'd pay on a capital gain — half of each province's top marginal income-tax rate.
| Province / territory | Top capital gains rate |
|---|---|
| Newfoundland and Labrador | 27.4% |
| Nova Scotia | 27.0% |
| Ontario | 26.8% |
| British Columbia | 26.8% |
| Quebec | 26.7% |
| Prince Edward Island | 26.5% |
| New Brunswick | 26.3% |
| Manitoba | 25.2% |
| Alberta | 24.0% |
| Yukon | 24.0% |
| Saskatchewan | 23.8% |
| Northwest Territories | 23.5% |
| Nunavut | 22.3% |
How capital gains tax works in Canada
When you sell an investment or property for more than it cost you, the profit is a capital gain. Canada doesn't tax the whole gain — only the 50% inclusion rate applies, meaning half of the gain is added to your taxable income for the year and taxed at your normal marginal rate. There's no flat "capital gains tax rate"; the rate you pay depends on your province and your total income.
Tax = (capital gain × 50%) × your marginal tax rate
- Inclusion rate (2026): 50% — only half the gain is taxable.
- Taxed as income: the taxable half stacks on top of your other income.
- Province matters: top capital-gains rates range from about 22% to 27%.
A worked example
Say you live in Ontario, earn $90,000 of other income, and realize a $50,000 capital gain. Half the gain — $25,000 — is taxable and is added on top of your $90,000. That $25,000 falls largely inside Ontario's surtax bands, so the marginal rate applied is about 32%, for roughly $8,000 of tax. You keep about $42,000 of the gain — an effective rate of around 16% on the full $50,000, because only half was ever taxed. Change the province or income above and watch the numbers move.
Capital gains are tax-efficient
Because only half is taxable, capital gains are taxed more lightly than interest (fully taxable) or even eligible dividends. You also choose when to trigger the gain by choosing when to sell — which opens the door to timing it for a lower-income year, spreading large sales across calendar years, or offsetting it with capital losses.
Ways to reduce capital gains tax
Shelter and offset
- Hold inside a TFSA or RRSP — gains in registered accounts aren't taxed. See TFSA vs RRSP.
- Harvest losses to offset gains, minding the 30-day superficial loss rule.
- Donate securities in-kind — this eliminates the gain and earns a donation credit.
Time and plan
- Spread big sales across two calendar years to stay in lower brackets.
- Realize in low-income years — early retirement, a sabbatical, or before CPP/OAS start.
- Claim the principal residence exemption on your home — see real estate gains.
What this calculator doesn't model
This is a marginal-rate estimator using 2026 combined federal + provincial rates. It does not model the alternative minimum tax (AMT), the lifetime capital gains exemption on qualifying small-business shares or farm/fishing property, or Quebec's separate provincial return (Quebec figures are a 2026 estimate). For the full picture, pair it with the capital gains explained guide and, for retirees, the OAS clawback calculator.
Frequently asked questions
How much tax do I pay on capital gains in Canada?
In Canada you are taxed on 50% of your capital gain (the inclusion rate), and that taxable half is added to your income and taxed at your marginal rate. So if you have a $50,000 gain, $25,000 is taxable, and the tax is your marginal rate × $25,000. On a $50,000 gain in Ontario with $90,000 of other income, that works out to roughly $8,000 — about a 16% effective rate on the full gain. This capital gains tax calculator runs that math for your province and income.
What is the capital gains inclusion rate for 2026?
The inclusion rate is 50% for 2026. A proposed increase to 66.7% on gains over $250,000 was deferred and then cancelled, so all individual capital gains are taxed at the 50% inclusion rate. Only half of every dollar of gain is added to your taxable income.
How is the capital gains tax rate calculated?
There is no separate "capital gains tax rate" in Canada — the taxable half of your gain is taxed at your regular marginal tax rate, which depends on your province and your total income for the year. Because the gain stacks on top of your other income, a large gain can be taxed across several brackets. This tool applies the actual 2026 combined federal + provincial marginal rates, band by band, so a gain that pushes you into a higher bracket is taxed correctly.
Which province has the lowest capital gains tax?
Capital gains are taxed at half your ordinary marginal rate, so provinces with lower top income-tax rates have the lowest top capital-gains rates. In 2026 the lowest top capital-gains rates are in Nunavut (~22.3%), the Northwest Territories (~23.5%), and Alberta and Yukon (~24.0%), while Newfoundland, Nova Scotia and Ontario sit at the high end (~26.5–27.4%). Your actual rate depends on your income, not just your province.
Do I pay capital gains tax when I sell my house?
Usually not on your principal residence — the principal residence exemption can make the entire gain tax-free for the years it was your main home. Capital gains tax generally applies to a second property, rental, cottage, or investment real estate. See our guide on capital gains tax on real estate for how the exemption and change-of-use rules work.
How can I reduce the capital gains tax I owe?
Common strategies include holding investments inside a TFSA or RRSP (gains there are sheltered), using tax-loss harvesting to offset gains with losses, donating appreciated securities in-kind (which eliminates the gain entirely), spreading large sales across calendar years, and claiming the principal residence exemption. Our how to avoid capital gains tax guide covers ten legal approaches.
Are capital gains taxed differently from dividends or interest?
Yes. Only 50% of a capital gain is taxable, which makes capital gains the most tax-efficient form of investment income. Interest is fully taxable at your marginal rate, and eligible Canadian dividends are grossed up by 38% but then receive a dividend tax credit. Capital gains are also only triggered when you sell, so you control the timing.
Does a capital gain affect my OAS or other benefits?
It can. The taxable half of a capital gain is added to your net income, which is the figure used to test the OAS clawback and income-tested benefits. A large one-time gain can push a retiree over the $95,323 (2026) OAS threshold. Our OAS clawback calculator shows how much a gain could cost you in recovered OAS.
Educational tool, not financial or tax advice. Figures use the 2026 50% inclusion rate and 2026 combined federal + provincial/territorial marginal tax rates (source: TaxTips.ca). Quebec's 2026 provincial brackets were a best estimate at time of writing. Verify your situation with the CRA or a tax professional.