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Canada has no gift tax. If someone hands you cash, a car or a share of their house, you don’t report it as income, and the CRA lists most gifts and inheritances among amounts that aren’t taxed. The catch sits with the person giving. If the gift is property that has gone up in value, the CRA treats it as a sale.
Do you pay tax on a gift you receive?
Usually not. There’s no gift tax return to file and no bill for the receiver. The word “most” in the CRA’s wording is there for a reason, though. Money that is really pay for work isn’t a gift, and income the gift earns later is taxable in someone’s hands.
What you receive does have a tax cost when you sell it. As the receiver, you’re generally treated as having bought the property at its fair market value on the day you got it. That becomes your starting point for working out a later gain.
What does the giver owe?
Cash is easy, because giving $50,000 to a child costs the giver no tax at all. Property is different. When you give away capital property, such as shares, land or a cottage, the CRA says you’re considered to have sold it at fair market value at the time of the gift. Any gain is yours to report, even though you got no money.
Take shares bought for $10,000 and now worth $30,000. The gain is $20,000. Half is added to income, and for an Ontario resident with $80,000 of other income, the capital gains tax calculator shows $2,965 of extra tax. That’s 14.8% of the gain. The giver keeps $17,035 of it, and the child gets shares worth $30,000.
The half comes from the 50% inclusion rate in our 2026 data. We haven’t found the CRA stating it for this year on a page we could confirm, so check before you rely on it.
Gift rules that change by who receives it
| Gift to | What the CRA says |
|---|---|
| Anyone except a spouse or partner | Treated as a sale at fair market value |
| Spouse or common-law partner | Generally no gain or loss, property moves at cost |
| Spouse, then they sell | You usually report the gain or loss while you’re together |
| Registered charity, first $200 | Federal credit of 15% |
| Registered charity, above $200 | Federal credit of 29% (33% on the part from income above the top bracket) |
| Charity, yearly limit | Generally 75% of net income |
The spouse rollover surprises people. It defers tax rather than wiping it out, and if your partner sells, the gain can come back to you. You can elect out of the rollover with a letter signed by both of you, but read the CRA’s guidance before you do.
What about gifts to children and to charity?
Property you give a child follows the sale-at-market-value rule. Income the property earns afterwards can be taxed back to the giver in some family setups, and the CRA has attribution rules for related minors. We didn’t read the current wording in full, so check it before you move investments into a young child’s name.
Charity is the other direction. A gift of publicly traded shares to a registered charity can qualify for a zero inclusion rate on the gain, according to the CRA, so the gain isn’t taxed at all. That’s a real advantage over selling the shares and donating the cash. You file Form T1170 to claim it.
Where gifts go wrong
Most mistakes come from valuing. Someone gives a rental property “for $1” and thinks the tax is nil, when the CRA looks at market value. Others hand over a cottage and forget that the gain lands on their own return.
Sometimes the better route is to wait. When someone dies, most of their property is treated as sold, and the gain goes on the final return. Estate costs like probate fees are a separate matter, and the estate administration tax calculator covers Ontario’s. To see how a gain fits into your other income, try the income tax calculator, or check the marginal tax rate before you sell anything to fund a gift.
Where the numbers come from
The rules come from the Canada Revenue Agency’s pages on transfers of capital property, gifts of shares and other capital property, gifts and income tax, and amounts that aren’t reported or taxed. The example uses this site’s 2026 tax data.
Frequently asked questions
Is there a gift tax in Canada?
No. The CRA lists most gifts and inheritances as amounts that aren't reported or taxed. The giver can still owe tax on a gain if the gift is property.
Do I report a gift of cash on my return?
Not as income. Cash you receive as a real gift isn't taxed.
What happens when I give shares to my child?
The CRA treats it as a sale at fair market value, so you report any gain. On a $20,000 gain in Ontario with $80,000 of other income, extra tax is about $2,965.
Are gifts to a spouse taxed?
Generally no gain or loss arises at the time, because property passes at cost. If your partner later sells, the gain can be reported by you.
Are gifts to charity treated differently?
Yes. You get a donation credit, and gifts of publicly traded shares can qualify for a zero inclusion rate on the gain.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.