Calculate the tax you owe on stocks, investment property, real estate, and other capital assets. Updated for 2026 — 50% inclusion rate confirmed for all Canadians.
Enter your income, asset details, and province to see your estimated tax owing.
| Inclusion rate (individuals) | 50% |
| Effective rate (top bracket) | ~16.5% |
| Proposed hike (66.67%) | ❌ Cancelled |
| Primary residence gain | Exempt (PRE) |
| LCGE (small business) | $1,250,000 |
| Capital losses | Carry forward indefinitely |
| Capital losses vs income | Cannot offset |
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Canada does not have a separate "capital gains tax." Instead, a portion of your capital gain is added to your regular income and taxed at your marginal income tax rate. In 2026, that portion — called the inclusion rate — is 50%. This means if you sell a stock for a $100,000 gain, only $50,000 is added to your income and taxed.
Proposed hike officially cancelled: The 2024 federal budget had proposed increasing the inclusion rate to 66.67% on gains above $250,000 for individuals. On March 21, 2025, Prime Minister Mark Carney officially cancelled this proposed increase. The 50% inclusion rate remains in effect for all Canadians on all capital gains in 2026, with no threshold. This was a significant tax policy change that benefits anyone selling investments, real estate, or a business.
The calculation involves four steps: (1) Subtract your Adjusted Cost Base (what you paid, including commissions) from your proceeds to get your capital gain. (2) Subtract any selling costs (real estate commissions, legal fees) from the gain. (3) Apply any capital losses from previous years. (4) Multiply the resulting gain by 50% to get your taxable capital gain, then apply your combined federal and provincial marginal tax rate.
Your ACB is the total cost of your investment — including the original purchase price, commissions paid, and any reinvested dividends. For real estate, your ACB includes the purchase price plus closing costs, renovation and improvement costs, and real estate commissions paid when you purchased. Keeping accurate records of your ACB is essential for calculating your capital gain correctly and minimizing your tax bill.
Gains from selling your primary residence are completely tax-free under the Principal Residence Exemption. You can designate one property per year as your principal residence. This exemption is one of the most valuable tax shelters available to Canadians — the gain on a family home is entirely tax-free regardless of how large it is. If you owned the property for some years as a rental before living in it, or vice versa, you may only get a partial exemption based on the years designated as principal residence.
Capital losses: If your investment goes down in value and you sell it for a loss, you have a capital loss. Capital losses can only be used to offset capital gains — they cannot reduce other income like employment income. You can carry capital losses back 3 years or forward indefinitely until you have gains to apply them against.