Use this free calculator to estimate how much tax you will owe on a capital gain in Canada. Enter your sale price, adjusted cost base (ACB), any selling expenses, your other annual income, and your province to see your estimated tax at your marginal rate.
Results are based on a 50% inclusion rate using 2025 federal and provincial rates as a 2026 estimate. This calculator does not account for the lifetime capital gains exemption, principal residence exemption, or loss carryforwards. For precise figures, consult a tax professional.
A capital gain arises when you sell a capital property — such as stocks, mutual funds, investment real estate, or a business — for more than you paid for it. The gain is the difference between your proceeds of disposition and your adjusted cost base (ACB), minus any selling expenses such as commissions or legal fees.
Canada taxes only a portion of your capital gain — known as the inclusion rate. At the current rate of 50%, half your gain is added to your taxable income for the year. That amount is then taxed at your marginal federal and provincial rate, just like employment income. This means the actual tax rate on a capital gain depends on both your inclusion rate and your marginal tax bracket.
For example, if you have a $100,000 capital gain and a combined marginal rate of 46%, you would pay tax on $50,000 (the taxable portion), resulting in approximately $23,000 in tax — an effective rate of 23% on the gain itself.
Because the taxable portion of your gain is stacked on top of your other income, the tax rate that applies depends on where you fall in the tax brackets after adding the gain. Someone with $50,000 of employment income will pay a lower rate on the same gain than someone with $200,000 of employment income, because they sit in different brackets. This calculator asks for your other income so it can apply the correct marginal rate rather than an average.
The ACB is what you originally paid for the asset, including any acquisition costs such as brokerage commissions. For investments purchased in multiple lots (e.g., buying shares over time), the ACB is the average cost per share across all purchases. Keeping an accurate ACB is your responsibility — the CRA does not track it for you, though your broker may provide it.
Suppose you bought shares of the same ETF on three occasions:
Total cost: $9,800 for 225 shares. Your ACB per share is $9,800 ÷ 225 = $43.56.
If you later sell 100 shares at $60.00 each (proceeds = $6,000), your ACB for those shares is 100 × $43.56 = $4,356. The capital gain is $6,000 − $4,356 = $1,644. Enter $6,000 as proceeds and $4,356 as ACB in the calculator.
Note that after the sale your remaining ACB per share stays at $43.56 — you do not recalculate the average, you just hold fewer shares. Canadian tax rules use this average cost method for identical properties; you cannot choose which specific lot you sold.
If the property you sold was your principal residence for every year you owned it, the entire capital gain may be exempt from tax under the principal residence exemption. This calculator does not apply the exemption — if your gain is fully or partially exempt, your actual tax will be lower than the estimate shown.
The LCGE allows eligible individuals to shelter capital gains on the sale of qualifying small business shares, farm property, or fishing property. The lifetime limit for 2026 is approximately $1,250,000 for small business shares. This exemption does not apply to publicly traded stocks or investment real estate. This calculator does not model the LCGE.
If you sell a capital property for less than its ACB, you have a capital loss. Capital losses can only be used to offset capital gains — they cannot reduce other types of income. Unused capital losses can be carried back three years or carried forward indefinitely to offset future gains. This calculator shows tax on positive gains only; enter your net gain after applying any losses you are using.
The same inclusion rate applies whether you are selling stocks, ETFs, investment properties, or a business. The key differences lie in the exemptions available: real estate that qualifies as a principal residence can be fully exempt, while eligible small business shares may qualify for the LCGE. Investment properties and publicly traded securities generally have no special exemptions.
Because only 50% of a capital gain is included in taxable income, capital gains are taxed at roughly half the rate of regular employment income at the same marginal bracket. This makes capital gains one of the most tax-efficient forms of income in Canada — alongside eligible Canadian dividends, which benefit from the dividend tax credit.
What is the capital gains inclusion rate in Canada? The current inclusion rate is 50% — only half of your capital gain is added to your taxable income. The 2024 federal budget proposed increasing this to 2/3 for gains over $250,000, but that change has not been confirmed as legislated for 2026. This calculator uses the 50% rate.
Do I pay capital gains tax when I sell my house? If the home was your principal residence for all years you owned it, the gain is fully exempt. If you rented it out for some years, a partial exemption may apply. This calculator does not model the principal residence exemption.
How do I report capital gains in Canada? Report capital gains on Schedule 3 of your T1 personal income tax return. Your broker will issue a T5008 slip showing proceeds, but you are responsible for tracking your ACB.
Does my RRSP or TFSA protect me from capital gains tax? Yes. Investments held inside a TFSA grow completely tax-free — withdrawals are not taxed. RRSP gains are sheltered until withdrawal, at which point they are taxed as regular income (not as capital gains). This calculator applies to taxable (non-registered) accounts only.
Can I use capital losses to reduce my tax? Yes. Capital losses offset capital gains in the same year. Any net capital loss can be carried back up to three years or carried forward indefinitely. Enter your gain net of any losses you are applying.
Does this calculator work for selling stocks and ETFs? Yes. Enter your total proceeds, ACB, and any commission costs in the selling expenses field. The same 50% inclusion rate applies to all capital property including equities.
What other calculators do you have? See our take-home pay calculator for net pay after income tax, CPP, and EI, and our CPP & EI max-out calculator to find the date your payroll deductions stop for the year.