How the 50% inclusion rate works
A capital gain is generally the proceeds of disposition minus the adjusted cost base and selling expenses. For individuals, the currently enacted inclusion rate is one-half: only 50% of a net capital gain is included in taxable income. The calculator multiplies that taxable portion by the marginal rate you enter.
The proposed increase to 66.67% announced in 2024 was not enacted. On January 31, 2025, the government deferred the planned change and the CRA reverted to administering the one-half rate. On March 21, 2025, the federal government cancelled the proposed increase. The 50% inclusion rate therefore remains in effect through 2025–2026. Tax law can change; verify the rule for the year and type of disposition before filing.
Principal residence exemption
A gain on a home may be fully exempt when the property qualifies and is designated as your principal residence for every year you owned it. The disposition must still be reported, and the designation must be completed. Only one property per family unit can generally be designated for a year.
This calculator does not apply the exemption automatically. Rental periods, changes in use, non-resident years, large lots, and partial business use can change the result. If the property was fully designated for every year owned, a qualifying gain may be exempt rather than taxed as shown here.
Capital losses
If proceeds are lower than the adjusted cost base plus selling expenses, the calculator shows a capital loss and estimates no current tax on this transaction. An allowable capital loss generally offsets taxable capital gains—not employment or other ordinary income.
Net capital losses may generally be carried back three years or carried forward to future years. Inclusion-rate changes across years can affect how prior losses are adjusted, and special rules apply to superficial losses, listed personal property, and business investment losses.
Deemed disposition
You can be considered to have disposed of property even without a sale. Common triggers include death, certain changes in a property's use, and emigration from Canada. A deemed disposition is often measured using fair market value at the relevant date and can create a capital gain or loss.
Rental or business buildings may also produce capital cost allowance recapture in addition to a capital gain. Recapture is not included in this estimate and can be taxed differently.
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Frequently asked questions
What is the capital gains inclusion rate in Canada?
The currently enacted rate is 50%, so half of a net capital gain is generally included in taxable income. The proposed 66.67% increase was not enacted and was later cancelled. Confirm the law for your tax year.
How is a capital gain calculated?
Subtract the adjusted cost base and eligible outlays and expenses from the proceeds of disposition. This calculator follows that basic CRA formula.
Is a principal residence sale taxable?
A gain may be fully exempt when the home qualifies and is designated as the principal residence for every year owned. You must still report the disposition and make the designation.
Can capital losses reduce other income?
Generally, net capital losses reduce taxable capital gains, not employment or other ordinary income. They may generally be carried back three years or forward to future years.
Does this include rental-property CCA recapture?
No. Depreciable property can create recapture or a terminal loss in addition to a capital gain or loss. Ask an accountant to calculate those amounts.
Official sources
- Canada Revenue Agency — How to calculate a capital gain or loss
- Canada Revenue Agency — Administration of the proposed capital gains changes (January 31, 2025)
- Prime Minister of Canada — Proposed capital gains inclusion-rate increase cancelled (March 21, 2025)
- Department of Finance Canada — Capital gains inclusion-rate background
- Canada Revenue Agency — Principal residence and other real estate
- Canada Revenue Agency — Net capital losses of other years
Always use the official guidance and legislation applicable to your tax year.