Updated Checked by the Tax-Services.ca editorial team How we check
Capital gains tax in Quebec works on half the profit. Sell a rental property or shares for a gain and only part of it is taxed, at your normal rates. On a $100,000 gain with $70,000 of other income, our calculator puts the extra tax at $18,624 (18.6% of the gain). It lands on two returns, not one.
How is a capital gain taxed in Quebec?
You take the sale price, subtract what you paid and your selling costs, and the result is the gain. A portion of it, the inclusion rate, joins your other income for the year and is taxed at your normal rates. The rest isn’t taxed at all.
The inclusion rate is the part people ask about. The federal government once proposed raising it to two-thirds, then cancelled that plan in a Prime Minister’s release of 21 March 2025. So half remains the working figure. No CRA page we read states the 2026 rate outright, so treat 50% as what the calculator assumes, and check the current rate before you file. Revenu Québec’s own pages wouldn’t open for us, so confirm the provincial side there too.
Why does Quebec mean two returns?
Quebec residents file a federal return with the CRA and a provincial return with Revenu Québec. The gain goes on both. To soften the double bill, Quebec residents get the refundable Quebec abatement, which is 16.5% of basic federal tax, claimed on line 44000 of the federal return. Anyone who ran a business with a permanent establishment outside Quebec uses Form T2203 instead.
The calculator’s result isn’t split into a federal part and a Quebec part, so don’t try to add the abatement on top of it.
| Item | Figure |
|---|---|
| Inclusion rate used by our calculator | 50% (2026 rate not on a CRA page we could read) |
| Quebec abatement | 16.5% of basic federal tax |
| Lifetime capital gains exemption, small business shares and farm or fishing property | $1,250,000 for 2025 |
| Extra tax on a $100,000 gain, Quebec, $70,000 other income | $18,624 |
| Same gain and income, Ontario | $16,004 |
What does a $100,000 gain cost you?
Say you bought a rental unit for $250,000, sold it for $350,000, and had no selling costs. You also earned $70,000 in other taxable income. In the capital gains tax calculator, half the gain ($50,000) is added to your income, and the extra tax is $18,624.17. You keep $81,375.83 of the $100,000.
Run the same figures for Ontario and the tax is $16,004.16. That’s $2,620 less. We haven’t broken down why, so don’t read more into it than the two totals. What we can say is that province matters, and this is why a generic Canada-wide answer is often wrong for you.
Want the full picture for the year? The income tax calculator takes a capital gains field, so you can see the whole bill rather than just the extra tax.
How do selling costs and renovations change the gain?
They shrink it. Take the same unit but add $15,000 of real estate commission and legal fees on the sale. The gain is $350,000 minus $250,000 minus $15,000, which is $85,000, and half of that, $42,500, is what gets added to your income. Spend $20,000 on a major improvement over the years, such as a new roof, and the cost base rises by that amount too, taking the gain from $85,000 to $65,000 and the taxable half to $32,500.
A repair that only keeps the place as it was doesn’t normally work that way, so ask whoever prepares your return which of your receipts count. That’s one reason to keep every bill. A few hundred dollars of paperwork can move thousands in tax.
Which sales are exempt or different?
Your main home is usually exempt, though the CRA still expects you to report the sale and designate it. Our calculator ignores the exemption, so leave a principal residence out of it.
The lifetime exemption applies to shares of a qualifying small business and to farm and fishing property. It was $1,250,000 after the March 2025 announcement kept that increase in place, and it is about $1,275,000 for 2026 once indexed. It isn’t modelled in the calculator either.
Money taken out of an RRSP is handled differently, and the RRSP withdrawal tax calculator covers that case. This page is about assets you hold outside a registered plan.
Mistakes and limits
Timing is the classic slip. Watch the sale date. A December closing and a January closing can land in different tax years. And a gain on top of a high salary can push part of your income into a higher bracket, which is why the calculator asks for your other income first.
Adjusted cost base is where records go missing, and with a rental property held for fifteen years, the receipts for the roof, the legal fees and the furnace are the first things to vanish from the filing cabinet. Keep purchase paperwork, legal fees and the cost of major improvements. A guess at the cost is a guess at your tax.
The calculator gives a loss no tax and doesn’t carry it forward. Treat the result as a ballpark estimate, not a return.
How we checked the figures
The Quebec abatement comes from the CRA‘s page on line 44000, current for the 2025 return. The cancelled inclusion rate increase and the $1,250,000 exemption come from the Prime Minister’s news release of 21 March 2025. Tax brackets and credits in the calculator use 2026 federal and Quebec data held on this site. We aren’t part of the CRA, Revenu Québec or any government.
Frequently asked questions
Do Quebec residents file capital gains on two returns?
Yes. The gain goes on the federal return filed with the CRA and on the provincial return filed with Revenu Québec.
What is the capital gains inclusion rate in Quebec?
Our calculator uses 50%. The federal plan to raise it to two-thirds was cancelled on 21 March 2025. We couldn't find the 2026 rate on a CRA page, and Revenu Québec's pages wouldn't open, so confirm both.
What is the Quebec abatement?
It is a refundable reduction of 16.5% of basic federal tax for Quebec residents, claimed on line 44000 of the federal return.
Is my main home taxed when I sell it?
A principal residence is usually exempt, but the sale is still reported. Our calculator doesn't model the exemption.
Is there a lifetime exemption?
The March 2025 announcement kept a $1,250,000 lifetime capital gains exemption for qualifying small business shares and farm or fishing property. It is about $1,275,000 for 2026 once indexed, so check the CRA page.
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