Capital Gains Tax Calculator Canada 2026
Estimate capital gains tax on stocks, investment property, or business assets using the 2026 CRA 50% inclusion rate and provincial tax brackets.
2026 Capital Gains Inclusion Rate
| Taxpayer | Gain Amount | Inclusion Rate 2026 | Effective Top Rate (ON) |
|---|---|---|---|
| Individuals | Any amount | 50% | ~26.77% |
| Corporations | All gains | 50% | Varies |
| Principal Residence | Any amount | 0% (exempt) | $0 |
| QSBC Shares (LCGE) | Up to $1.275M lifetime | 0% (exempt) | $0 |
The proposed increase to a 66.67% inclusion rate was cancelled by the federal government on March 21, 2025 and never became law. Individuals, corporations, and trusts all remain at the 50% inclusion rate. Confirm with your accountant before filing.
How Capital Gains Tax Works in Canada
Canada does not have a separate capital gains tax rate. Instead, a portion (the inclusion rate) of your capital gain is added to your regular income and taxed at your marginal rate. For individuals in 2026, only 50% of a capital gain is taxable — the other 50% is entirely tax-free.
Your capital gain is: proceeds − ACB − selling costs. The ACB includes the original purchase price plus commissions, legal fees, and for real estate, the cost of capital improvements. Keeping detailed ACB records is critical — the CRA can reassess your gain if you cannot substantiate it.
The sale of your principal residence is generally completely tax-free regardless of the gain size. You must still report the sale on Schedule 3 and file Form T2091 — failure to report can result in the CRA denying the exemption.
The LCGE shelters up to $1,275,000 (2026) in capital gains from selling qualifying small business corporation shares, qualified farm, or qualified fishing property. This is a lifetime cumulative limit — consult a tax lawyer before structuring any business sale.
The inclusion rate increase was cancelled
In 2024 the federal government proposed raising the capital gains inclusion rate from 50% to 66.67% on gains above $250,000 for individuals, and on all gains for corporations and most trusts. It was widely reported, then deferred, and finally cancelled in March 2025.
The inclusion rate is 50% for everyone — individuals, corporations and trusts alike. A great deal of advice published during 2024 assumes otherwise, so if you are reading planning material from that period, check its date before acting on it.
How the tax is actually calculated
A capital gain is your proceeds of disposition minus your adjusted cost base minus outlays and expenses. Half of the result is added to your income and taxed at your marginal rate. There is no separate capital gains tax rate in Canada — the "capital gains rate" people refer to is simply half of their marginal rate.
Adjusted cost base is where most errors happen. It is not just what you paid. Add commissions on purchase, capital improvements to a property, and reinvested distributions on funds. Deduct returns of capital. For identical securities bought at different times you must use the weighted average cost of all units — not the specific lot you choose to sell, and not first-in-first-out.
Outlays and expenses reduce the gain too: real estate commission, legal fees and transfer taxes on a sale are all deductible against the proceeds, and forgetting them overstates the gain on a property sale considerably.
What is exempt, and what catches people out
Generally fully exempt — but the sale must still be reported on your return. Failing to report it can cost the exemption and attract penalties. A family unit can designate only one property per year, so a cottage and a house cannot both be fully sheltered for the same years.
No capital gains tax inside registered accounts. RRSP and RRIF withdrawals are taxed as ordinary income, at full rate rather than half — which is why holding the same asset in a TFSA versus an RRSP produces very different outcomes.
You can trigger a gain without selling anything. Changing a property from personal use to a rental, gifting property to anyone other than a spouse, emigrating from Canada, and death all create a deemed disposition at fair market value. The tax is real even though no money changed hands.
Losses, and the 30-day rule
Capital losses offset capital gains, not ordinary income. Unused losses can be carried back three years — recovering tax already paid — or carried forward indefinitely. Deliberately realising losses in December to offset gains is standard practice and entirely legitimate.
But watch the superficial loss rule. If you or an affiliated person (including your spouse, or a corporation you control, or your own RRSP or TFSA) buys the identical property within 30 days before or after the sale and still holds it at the end of that window, the loss is denied. Selling a stock at a loss and repurchasing it a week later does not work — and buying it inside your TFSA denies the loss permanently rather than deferring it.