Updated Checked by the Tax-Services.ca editorial team How we check
Canada has no separate capital gains rate. You add a share of the gain to your income and pay your usual rates on that share. Take a $100,000 gain in Ontario for someone earning $90,000 otherwise: the extra tax is $18,536.07, or 18.5% of the gain.
How much of a gain do you pay tax on?
The share added to income is the inclusion rate. For the 2025 return it was 50%, so half of a gain counts. The government planned to raise it to two-thirds, but the Prime Minister’s release of 21 March 2025 cancelled that increase.
The 2026 rate isn’t printed on a CRA page we could open, so treat 50% as the working assumption and check before you file. Our capital gains calculator uses 50%.
You report the result on line 12700 of your return, using Schedule 3. The CRA’s page on calculating and reporting your capital gains and losses walks through the same steps with its own example. If your allowable capital losses are bigger than your taxable gains, line 12700 stays empty and the loss can be used in other years.
What do capital gains rates look like in real dollars?
The effective rate moves with your other income, because the taxable half stacks on top of it. Here are four cases from the engine, all on the 2026 rates.
| Case | Half added to income | Extra tax | Share of the gain |
|---|---|---|---|
| $100,000 gain, Ontario, $50,000 other income | $50,000 | $14,265.50 | 14.3% |
| $100,000 gain, Ontario, $90,000 other income | $50,000 | $18,536.07 | 18.5% |
| $20,000 gain, Ontario, $90,000 other income | $10,000 | $2,990.79 | 15.0% |
| $100,000 gain, Alberta, $90,000 other income | $50,000 | $16,450.54 | 16.5% |
Compare rows two and three. Same person, same income, yet the smaller gain is taxed at a lighter share, because less of it climbs into the higher brackets and the first slice sits in cheaper ones. Province matters too, and Alberta comes out cheaper by about $2,085 on the same gain.
What does a sale look like from start to finish?
Say you sell a rental condo for $255,000. You paid $150,000, and selling costs came to $5,000. The gain is $100,000: sale price, minus what you paid, minus the costs.
Half joins your other income. That’s $50,000. At $90,000 of other income in Ontario, the extra tax is $18,536.07 and you keep $81,463.93 of the gain. Change the other income in the capital gains tax calculator and watch how much it moves.
Want the bigger picture for the year? Put your total income into the income tax calculator first, then add the taxable gain.
What if you also sold something at a loss?
Then the loss shrinks the gain before the inclusion rate is applied. Suppose Priya in Halifax sells one stock for a $100,000 gain and another for a $10,000 loss in the same year. Her net gain is $90,000, and at a 50% inclusion rate $45,000 lands on line 12700 instead of $50,000. That’s the arithmetic, and your tax is whatever your rates make of that $45,000.
Losses can only be used against gains. If the loss is the bigger number, nothing hits your salary, but the leftover can be carried to other years, so keep the paperwork.
Which gains and losses don’t follow this?
Plenty. And they catch people out.
A main home is normally exempt when it counts as your principal residence, though the CRA still expects you to report the sale. A cottage or rental is another story, so check the CRA page on principal residences first. Investments held inside a registered plan aren’t reported as gains at all. In an RRSP the growth is exempt while it stays in the plan, and tax comes when you take money out.
The lifetime exemption for small business shares and for farming and fishing land or boats is an option in the calculator, switched on by a tick box. The government said on 21 March 2025 that it was keeping the increase to $1,250,000, so sellers of that kind of property need their own check.
Dividends are a different tax altogether, with their own gross-up and credit. The dividend tax calculator covers those. And if you sold at a loss, allowable losses only offset taxable gains, not your salary. Line 25300 handles losses carried in from other years. We didn’t confirm the detailed ordering rules, so read the CRA page on that line before you plan around them.
Do you owe tax the day you sell?
Not on the day, but tax time comes for it. Nobody withholds anything from the proceeds of a stock sale or a condo, so the bill shows up when you file. If you expect a big gain, set some of it aside, ballpark a quarter to a third depending on your income, and use the table above to check where you land. Don’t treat that as a rule, just a cushion so April isn’t a nasty surprise.
How we checked the figures
The inclusion rate, line 12700 and Schedule 3 come from CRA pages on capital gains. The cancellation and the $1,250,000 exemption come from the Prime Minister’s release of 21 March 2025. The tax amounts are estimates from our own calculators, with 2026 federal and provincial rates, a single sale in one year and no other credits.
Frequently asked questions
What is the capital gains rate in Canada?
There isn't a separate rate. Half of a gain (the 2025 inclusion rate) is added to your income and taxed at your normal rates.
Did the capital gains inclusion rate go up to two-thirds?
No. The increase was cancelled in the Prime Minister's release of 21 March 2025.
How much tax is due on a $100,000 gain in Ontario?
With $90,000 of other income you pay $18,536.07 extra. With $50,000 of other income it is $14,265.50.
Where do I report a capital gain?
On Schedule 3, with the taxable amount going to line 12700 of your return.
Do I pay tax when I sell my main home?
Usually not, if it qualifies as your principal residence and you report the sale. Check the CRA page on principal residences for the conditions.
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