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There’s no single capital gains tax percentage in Canada. Only half of a gain is added to your income, and that half is taxed at your normal rates, so most people in Ontario end up paying somewhere between 11% and 25% of the gain itself. Where you land depends on what else you earned that year.
How does the capital gains tax percentage work?
You work out the gain first: what you sold for, minus what you paid (the adjusted cost base) and minus selling costs. For the 2025 return the Canada Revenue Agency says your taxable portion of a gain is generally one-half of the gain. We couldn’t find one CRA page that states the 2026 rate in a single line, so treat 50% as the working figure and confirm it on the CRA site first.
Your return counts that half as extra income, and the brackets that apply to your salary apply to it too. That’s why no fixed rate applies.
A simple case shows the order of the steps. Say you sell shares for $60,000 that you bought for $40,000, with no fees. The gain is $20,000, not $60,000, and half of that, $10,000, is what gets added to your income. You never pay tax on the money you originally put in.
What happened to the two-thirds rate?
You may have read that the inclusion rate was going up to two-thirds on gains over $250,000. The Prime Minister’s release of 21 March 2025 cancelled that proposal. The CRA also published an update on how it was handling the proposed change. If a page still tells you two-thirds applies, it’s out of date.
What does $20,000 of gain cost at different incomes?
Here’s a $20,000 gain at three salaries, worked out from our 2026 federal and provincial figures. Half of it, $10,000, lands on top of the salary shown.
| Other income in Ontario | Extra tax on the gain | Percentage of the gain |
|---|---|---|
| $50,000 | $2,202 | 11.0% |
| $90,000 | $2,991 | 15.0% |
| $150,000 | $4,479 | 22.4% |
Same gain, and the bill doubles. That’s the whole trick to reading a percentage figure: someone quoting “15%” is quoting one income level and hoping you have the same one.
What if the gain is big?
A large gain climbs through the brackets as it goes. Take a $95,000 gain on top of $90,000 of salary. The capital gains tax calculator shows $17,451 of extra tax, or 18.4% of the gain. On $150,000 of salary the same gain costs $21,835, which is 23.0%.
So does it help to spread a sale over two years? Sometimes. If you can choose when to sell, a gain split across two tax years can keep some of it out of the higher brackets. That only works when the sale itself can be split, which a single house or a single block of shares often can’t. Test both versions in the calculator before you plan around it.
How and where do you report a gain?
Gains go on Schedule 3 of your T1 return, and the taxable half flows through to line 12700. Your broker usually sends a slip with the proceeds, but the cost side is on you, so the slip alone can overstate the gain. If you’ve held a stock for years and reinvested dividends along the way, a few bucks of extra cost here and there adds up, and it all lowers the gain. Keep a running record, because the CRA expects you to be able to show how you got your numbers. Our guide to how Canadian taxes work puts gains in the wider picture.
Where people get this wrong
The most common slip is applying the half to the tax instead of the gain. You halve the gain, then tax it.
The second is forgetting costs. Broker fees, legal fees and some improvements can go against the gain, and a smaller gain means a smaller bill. Keep the paperwork from the day you buy, because finding the original cost fifteen years later is a chore.
Losses matter as well, since a loss on one sale can cancel a gain on another. The calculator shows a loss as zero tax and carries it nowhere, so it won’t model that for you. Your main home is usually exempt from tax when you sell it, and the calculator leaves that out too. Check both on the CRA pages if either applies.
Finally, the estimate covers income tax only. To see the rest of your year, try the income tax calculator, then look at the marginal tax rate calculator to see what the next dollar costs. If you sold shares for a dividend-paying company, the dividend tax calculator handles that other kind of income.
Where we got these figures
The one-half inclusion rate for 2025 comes from the CRA‘s capital gains guide for the 2025 return. The cancellation of the two-thirds increase comes from the Prime Minister’s release of 21 March 2025. Rates and brackets come from this site’s own 2026 data. We aren’t a government service and we don’t speak for one.
Frequently asked questions
What is the capital gains tax rate in Canada?
There's no flat rate. Generally half of the gain is added to your income and taxed at your normal rates, so the share of the gain you pay depends on your other income.
Did the two-thirds inclusion rate come in?
No. The Prime Minister's release of 21 March 2025 cancelled the proposed increase.
Is 50% the inclusion rate for 2026?
The CRA states one-half for the 2025 return. We couldn't find a single CRA line for 2026, so check the CRA before relying on it.
Do I pay tax when I sell my main home?
Usually not, because of the principal residence exemption. Read the CRA page on it to confirm your case, since the calculator doesn't model it.
Can selling costs reduce the gain?
Yes. Fees paid to sell, such as commissions and legal costs, come off the gain before the half is taxed.
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