Capital Gains Tax Calculator Canada (2026)
Use this capital gains tax calculator to estimate the tax on a sale in Canada for 2026. Enter what you sold it for, what you paid for it, your other income for the year and your province or territory. In Canada only 50% of a capital gain is taxable, so the calculator adds that taxable half to your other income and works out the extra federal and provincial tax it creates.
Capital Gains Tax Calculator
| Capital gain | |
| Taxable portion (50%) | |
| Estimated tax owing | |
| Effective tax rate on the gain | |
| Marginal rate on the last dollar of the gain | |
| After-tax proceeds (sale price less estimated tax) |
Estimate only, using 2026 rates and the 50% inclusion rate. Excludes losses carried forward/back, exemptions (e.g. principal residence), and special cases.
Notes: CPP and EI are not included, because they do not apply to capital gains. The Ontario health premium is also excluded entirely: it is based on total income, and because this calculator compares tax with and without the gain, any premium on your other income would cancel out in the difference. The marginal rate shown is the combined federal and provincial rate on the next dollar of taxable income at your total income; because only 50% of a gain is taxable, the tax on one more dollar of gain is half that rate.
How capital gains tax works in Canada
When you sell something for more than you paid for it, the difference is a capital gain. In Canada, only 50% of that gain counts as taxable income. This is called the capital gains inclusion rate. The other 50% is not included in your income at all. A proposed increase to 66.67% was cancelled on March 21, 2025, and never took effect, so the inclusion rate in 2026 is still 50%.
Here is a simple example. Suppose you buy shares for $20,000 and later sell them for $30,000. Your capital gain is $10,000. Only $5,000 of it is taxable. If your combined federal and provincial marginal tax rate is 30%, the tax on that gain is 30% of $5,000, which is $1,500. That works out to 15% of the full $10,000 gain. The 50% inclusion rate does not mean you pay 50% tax, and it does not mean the whole gain is tax-free. It means half the gain is left out before your tax rates are applied.
How this calculator estimates your tax
This calculator uses the difference method, in simple steps. First, it works out your capital gain: sale price minus adjusted cost base. Second, it takes 50% of that gain as the taxable capital gain. Third, it works out your federal and provincial tax twice: once on your other income alone, and once on your other income plus the taxable gain. The difference between those two tax amounts is the estimated extra tax caused by the sale.
Tax is worked out using the 2026 federal brackets and your province or territory’s 2026 brackets, with the basic personal amount as a credit at the lowest rate in each jurisdiction, the same simplified model used in our take-home pay calculator. In Ontario, a surtax applies once Ontario tax passes $5,818, with a second tier above $7,446. CPP and EI are not included, because they do not apply to capital gains. The Ontario health premium is excluded entirely, because it is based on total income and would cancel out in the difference between the two tax calculations. The federal basic personal amount phase-out at very high incomes and other credits are not modelled, so this is an estimate, not a filed tax return.
Worked example
Ontario, other income $75,000, sale price $150,000, adjusted cost base $100,000. These are the calculator’s default values, so you can check them live above.
| Item | Amount |
|---|---|
| Capital gain ($150,000 – $100,000) | $50,000.00 |
| Taxable capital gain (50%) | $25,000.00 |
| Estimated tax owing | $7,505.80 |
| Effective tax rate on the gain | 15.01% |
| Marginal rate on the last dollar of the gain | 31.48% |
| After-tax proceeds ($150,000 – $7,505.80) | $142,494.20 |
Why is the tax $7,505.80 rather than $7,412.50? At incomes from $75,000 to $100,000, the federal rate is 20.5% and the Ontario rate is 9.15%, which together are 29.65%. Applied to the $25,000 taxable gain, that gives $7,412.50. But Ontario tax at $100,000 is $6,284.52 before surtax, which is above the $5,818 surtax threshold, while Ontario tax at $75,000 is below it. The surtax therefore adds 20% of the $466.52 excess, which is $93.30, bringing the total to $7,505.80. For the same reason, the marginal rate on the last dollar at $100,000 is 31.48%: 20.5% federal plus 10.98% Ontario (9.15% increased by the 20% surtax).
Frequently asked questions
What is the capital gains inclusion rate in Canada in 2026?
It is 50%. Half of a capital gain is included in your taxable income. A proposed increase to 66.67% was cancelled in 2025 and never took effect.
Do I pay capital gains tax on my house?
Usually not on your principal residence, if it qualifies. The principal residence exemption can shelter the gain on a home you ordinarily inhabited and designated as your principal residence for the years you owned it. It does not automatically cover rental property, land above a certain size, or a home that was not your principal residence for the whole time you owned it.
Does the 50% mean half my gain is tax-free?
In effect, half the gain is not included in your income, so you are not taxed on that half. The other half is taxed at your normal marginal tax rates, just like other income. That is the classic confusion: 50% is the inclusion rate, not your tax rate. If your marginal rate is 30%, your tax on the full gain works out to about 15% of the gain, before effects such as the Ontario surtax.
When do I pay it?
You report the gain on the tax return for the year you sold the property, and any balance owing for that year is due April 30 of the following year. For example, a gain from a sale in 2026 is reported on your 2026 return, with the balance due April 30, 2027.
See also: 2026 Canadian tax brackets, our take-home pay calculator, and all of our calculators.
Sources: Canada Revenue Agency, 2026 federal and provincial tax rates and brackets; Canada Revenue Agency, calculating and reporting capital gains and losses; Prime Minister of Canada, March 21, 2025, cancellation of the proposed capital gains tax increase.
