Canada · Capital gains tax on property
Canada Capital Gains Tax on Property Calculator 2026
In Canada one-half of a capital gain on property is taxable in 2026: the taxable half is added to your income and taxed at the federal rate, 14% to 33%, plus your province's rate. A home designated as your principal residence for every year you owned it is exempt. On a $100,000 gain an Ontario resident earning $100,000 pays about $17,486.
Estimate the tax on a capital gain when you sell property in Canada: a cottage, a rental, an inherited property or a home that was your principal residence for only part of the time. The one-half inclusion rate, the principal residence exemption, the flipping rule and the 2026 federal and provincial rates are built in.
About 18.7% of your $250,000 gain. You keep roughly $203,163.
How we got this
| Proceeds of disposition | $800,000 |
| Less adjusted cost base and outlays | −$550,000 |
| Capital gain | $250,000 |
| Less principal residence exemption | −$0 |
| Less half not included (one-half inclusion rate) | −$125,000 |
| Taxable capital gain added to income | $125,000 |
| Tax | On | Average rate | Amount |
|---|---|---|---|
| Federal tax | $125,000 | 26.0% | $32,444 |
| Ontario tax | $125,000 | 11.5% | $14,393 |
| Estimated tax | $46,837 |
Report the sale on Schedule 3 of the return for the year of sale, and designate a principal residence on Form T2091(IND). The tax is paid with that year's return, due 30 April (15 June for the self-employed, with any balance still due 30 April).
This is an estimate for general information only, not tax, legal or financial advice. Tax rules are complex and depend on your circumstances, and figures may not reflect the latest changes. Confirm your position with the Canada Revenue Agency or a qualified tax adviser before acting. The terms of use set out the limits of this estimate and of our liability.
Your figures are worked out in your browser. They are not sent to us or stored.
How is capital gains tax on property calculated in Canada?
The capital gain is the proceeds of disposition less the adjusted cost base (the purchase price plus capital improvements) and the outlays and expenses of selling, such as commission and legal fees. One-half of the gain is the taxable capital gain. It is added to your other income for the year and taxed at the federal rates and your province's rates. Quebec residents receive the 16.5 per cent abatement of federal tax.
How does the principal residence exemption work?
The exempt part of the gain is the gain multiplied by one plus the number of tax years the property is designated as your principal residence, divided by the number of tax years you owned it. The extra year allows for buying and selling in the same year. A family can designate only one property for any year, so a cottage and a house cannot both be covered for the same period. The sale must be reported on Schedule 3 and the designation made on Form T2091(IND) even when the gain is fully exempt.
What are the 2026 federal tax rates?
| Taxable income | Federal rate |
|---|---|
| $0 to $58,523 | 14.0% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29.0% |
| over $258,482 | 33% |
What are the 2026 provincial and territorial rates?
Alberta
| Taxable income | Rate |
|---|---|
| $0 to $61,200 | 8.00% |
| $61,200 to $154,259 | 10.00% |
| $154,259 to $185,111 | 12.00% |
| $185,111 to $246,813 | 13.00% |
| $246,813 to $370,220 | 14.00% |
| over $370,220 | 15.00% |
British Columbia
| Taxable income | Rate |
|---|---|
| $0 to $50,363 | 5.60% |
| $50,363 to $100,728 | 7.70% |
| $100,728 to $115,648 | 10.50% |
| $115,648 to $140,430 | 12.29% |
| $140,430 to $190,405 | 14.70% |
| $190,405 to $265,545 | 16.80% |
| over $265,545 | 20.50% |
Capital gains tax in British Columbia, with a worked example
Manitoba
| Taxable income | Rate |
|---|---|
| $0 to $47,564 | 10.80% |
| $47,564 to $101,200 | 12.75% |
| over $101,200 | 17.40% |
New Brunswick
| Taxable income | Rate |
|---|---|
| $0 to $52,333 | 9.40% |
| $52,333 to $104,666 | 14.00% |
| $104,666 to $193,861 | 16.00% |
| over $193,861 | 19.50% |
Newfoundland and Labrador
| Taxable income | Rate |
|---|---|
| $0 to $44,678 | 8.70% |
| $44,678 to $89,354 | 14.50% |
| $89,354 to $159,528 | 15.80% |
| $159,528 to $223,340 | 17.80% |
| $223,340 to $285,319 | 19.80% |
| $285,319 to $570,638 | 20.80% |
| $570,638 to $1,141,275 | 21.30% |
| over $1,141,275 | 21.80% |
Capital gains tax in Newfoundland and Labrador, with a worked example
Northwest Territories
| Taxable income | Rate |
|---|---|
| $0 to $53,003 | 5.90% |
| $53,003 to $106,009 | 8.60% |
| $106,009 to $172,346 | 12.20% |
| over $172,346 | 14.05% |
Capital gains tax in Northwest Territories, with a worked example
Nova Scotia
| Taxable income | Rate |
|---|---|
| $0 to $30,995 | 8.79% |
| $30,995 to $61,991 | 14.95% |
| $61,991 to $97,417 | 16.67% |
| $97,417 to $157,124 | 17.50% |
| over $157,124 | 21.00% |
Nunavut
| Taxable income | Rate |
|---|---|
| $0 to $55,801 | 4.00% |
| $55,801 to $111,602 | 7.00% |
| $111,602 to $181,439 | 9.00% |
| over $181,439 | 11.50% |
Ontario
| Taxable income | Rate |
|---|---|
| $0 to $53,891 | 5.05% |
| $53,891 to $107,785 | 9.15% |
| $107,785 to $150,000 | 11.16% |
| $150,000 to $220,000 | 12.16% |
| over $220,000 | 13.16% |
Prince Edward Island
| Taxable income | Rate |
|---|---|
| $0 to $33,928 | 9.50% |
| $33,928 to $65,820 | 13.47% |
| $65,820 to $106,890 | 16.60% |
| $106,890 to $142,520 | 17.62% |
| $142,520 to $200,000 | 19.00% |
| over $200,000 | 20.00% |
Capital gains tax in Prince Edward Island, with a worked example
Quebec
| Taxable income | Rate |
|---|---|
| $0 to $54,345 | 14.00% |
| $54,345 to $108,680 | 19.00% |
| $108,680 to $132,245 | 24.00% |
| over $132,245 | 25.75% |
Saskatchewan
| Taxable income | Rate |
|---|---|
| $0 to $54,532 | 10.50% |
| $54,532 to $155,805 | 12.50% |
| over $155,805 | 14.50% |
Yukon
| Taxable income | Rate |
|---|---|
| $0 to $58,523 | 6.40% |
| $58,523 to $117,045 | 9.00% |
| $117,045 to $181,440 | 10.90% |
| $181,440 to $500,000 | 12.80% |
| over $500,000 | 15.00% |
Each province and territory has its own page: Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan, Yukon.
Provincial surtaxes in Ontario and Prince Edward Island, provincial credits and the alternative minimum tax are not modelled, so the estimate is the marginal-rate tax on the taxable capital gain.
What are the Canadian capital gains figures for 2026?
- The capital gains inclusion rate in Canada is one-half: 50% of a capital gain is taxable.Source: CRA, Calculating and reporting your capital gains and losses.
- The proposed increase of the inclusion rate to two-thirds was cancelled on 21 March 2025.Source: Prime Minister of Canada, 21 March 2025.
- The 2026 federal tax rates are 14% to $58,523, 20.5% to $117,045, 26% to $181,440, 29% to $258,482 and 33% above.Source: CRA, Current year tax rates and income brackets.
- The principal residence exemption equals the gain multiplied by one plus the years designated, divided by the years owned.Source: CRA Income Tax Folio S1-F3-C2, paragraph 2.20.
- A residential property held for less than 365 consecutive days is taxed as business income under the flipping rule.Source: CRA, Principal residence and other real estate.
- Quebec residents receive a refundable abatement of 16.5% of basic federal tax.Source: CRA, Line 44000.
Canadian property capital gains: common questions
How much is capital gains tax on property in Canada?
There is no separate capital gains tax. One-half of the capital gain (the inclusion rate of 50%) is added to your income for the year and taxed at your federal and provincial marginal rates. On a $100,000 gain, $50,000 is taxable; for an Ontario resident earning $100,000 that is about $17,486 of tax.
Is the capital gains inclusion rate still 50 per cent?
Yes. The increase to two-thirds proposed in Budget 2024 was deferred to 1 January 2026 and then cancelled on 21 March 2025. One-half of a capital gain remains taxable. The lifetime capital gains exemption for small business shares and farm or fishing property was kept at $1.25 million.
Do I pay capital gains tax when I sell my home in Canada?
Usually not. If the property was your principal residence for every year you owned it, the gain is exempt, but you must still report the sale on Schedule 3 and designate it on Form T2091(IND). Where it was your principal residence for only some years, the exempt share is the gain multiplied by one plus the designated years, divided by the years owned. Only one property per family can be designated for a given year, and the land is usually limited to half a hectare.
What is the residential property flipping rule?
A residential property sold after being owned for less than 365 consecutive days is treated as business income rather than a capital gain, so the whole profit is taxable and the principal residence exemption cannot apply, unless a listed life event such as death, separation, a new job or a disability applies.
When is the tax paid?
With the income tax return for the year of the sale. Returns and any balance are due 30 April; self-employed individuals have until 15 June to file but the balance is still due 30 April.
Guides
Related
Sources
- Calculating and reporting your capital gains and losses (inclusion rate)
- Prime Minister cancels proposed capital gains tax increase, 21 March 2025
- Current year tax rates and income brackets, 2026 (federal and provincial)
- Revenu Québec, income tax rates for 2026
- Principal residence and other real estate (designation, half-hectare limit, flipping rule)
- Income Tax Folio S1-F3-C2, Principal Residence (exemption formula, paragraph 2.20)