Ontario capital gains tax calculator
$9,034 on a $50,000 gain with $100,000 of other income — 18.1%, against a marginal rate of 31.5% once the surtax is counted. Half your rate, because half the gain is taxable.
Written and edited by Pablo Ruiz QuinteroSources checked September 1, 2026Inclusion rate confirmed in three CRA documents, read 2026-09-08The adjusted cost base is what you paid plus commissions and capital improvements, adjusted for reinvested distributions and any return of capital — the hardest figure here, and the one most often wrong.
18.1% of the gain · $40,966 kept
| Sale price | $150,000 |
| Cost base and selling costs | − $100,000 |
| Capital gain | $50,000 |
| Taxable half (50.0%) | $25,000 |
| Tax at 31.5% on that half | $9,034 |
The same $50,000 as salary would cost $19,886 — $10,852 more. Nothing else in the Canadian system is taxed this lightly.
A principal residence that qualified throughout is exempt entirely, and the lifetime capital gains exemption shelters qualifying business and farm property. Neither is applied here.
Only half of a capital gain is taxed, so it costs half your marginal rate
A $50,000 gain does not enter your return as $50,000. 50.0% of it does — $25,000 — and that half is then taxed as ordinary income. There is no separate capital gains rate; there is a separate *amount*.
The arithmetic consequence is clean and worth internalising: your effective rate on a capital gain is exactly half your marginal rate on anything else.
On $60,000 of other income in Ontario, $50,000 of gain costs $7,081 — 14.2% — against a marginal rate of 35.7%.
On $100,000: $9,034, or 18.1%.
On $250,000: $13,026, or 26.1%, where the marginal rate is 49.8%.
The same $50,000 earned as salary would cost $19,886 at $100,000 of income — $10,852 more. Nothing else in the Canadian system is taxed this lightly, and the gap widens as income rises, because half of a big number is a bigger saving than half of a small one.
Why this calculator did not exist until now
Worth stating plainly, because it explains what every other figure on this site is worth.
Budget 2024 proposed raising the inclusion rate from one half to two thirds on individual gains above $250,000 and on all corporate gains. In January 2025 the government deferred it to 1 January 2026. Then the announcements went the other way, and for months the rate that decides the entire answer was genuinely contested — half or two thirds, a difference of a third of the tax bill.
Through all of that this page did not exist. Publishing either number would have been a coin toss on the most important figure on it, and the rule here is that every figure comes off the document that sets it.
The CRA has now settled it, in three places. The T4037 Capital Gains guide states the inclusion rate as one half and does not mention two thirds anywhere. The CRA's January 2025 statement says it *"has reverted to administering the currently enacted capital gains inclusion rate of one-half"*. And the CRA's "What's new for corporations" page says of the deferred increase, in exactly these words: "It was later announced that this proposed increase was cancelled."
So the rate is 50.0%, and now there is a calculator. If it changes again, this page will say so before it says anything else.
The exemption that removes most Canadian capital gains entirely
A home that was your principal residence for every year you owned it produces no taxable gain at all, however large the gain. That single rule is why most Canadians never encounter capital gains tax despite owning the most appreciated asset they will ever own.
Where it only qualified for part of the time — a rental period, a second property, years spent abroad — the exemption is prorated by a formula with a quirk in it: (years designated + 1) ÷ years owned. That extra year is deliberate; it covers the year you sell one home and buy another, so both can be designated for that year without overlapping.
A $400,000 gain on a house owned 20 years and designated for 12 of them: 65.0% exempt, so $260,000 escapes and $140,000 is a capital gain. Half of that is taxable.
Two traps around it. Every sale of a principal residence must be reported, even when fully exempt — the penalty for not reporting is real and the exemption can be denied. And changing a property's use from home to rental, or back, is a deemed disposition at market value on that date, which crystallises a gain even though nothing was sold.
Losses only go against gains, and the 30-day rule catches people every December
A capital loss cannot reduce your salary. It offsets capital gains only — which is the opposite of a rental loss, and a distinction that surprises people at exactly the wrong moment.
What it can do is travel. A net capital loss can be carried back 3 years to recover tax already paid on gains in those years, or carried forward indefinitely. So a loss in a bad year is not wasted; it is parked.
And the rule that ruins the obvious plan: the superficial loss. If you or an affiliated person buys the same or identical property within 30 days before or after the sale and still holds it at the end of that window, the loss is deemed nil. Selling a stock on 20 December to book the loss and buying it back on 3 January does not work, and neither does buying it in your spouse's account or your RRSP.
The $1,250,000 lifetime capital gains exemption is the other big shelter, for qualified small business corporation shares and qualified farm or fishing property. That is the 2025 figure; indexation resumes in 2026 and the indexed amount is not yet published. It has conditions this calculator cannot check, so it is not applied.
Where a $100,000 gain costs least
Same gain, same $100,000 of other income, all 13:
1. Nunavut — $16,246, 16.2%.
2. Alberta — $17,001, 17.0%.
3. Yukon — $17,105, 17.1%.
4. Northwest Territories — $17,844, 17.8%.
5. British Columbia — $17,997, 18.0%.
6. Saskatchewan — $18,251, 18.3%.
7. New Brunswick — $19,885, 19.9%.
8. Ontario — $19,886, 19.9% ← this page.
9. Newfoundland and Labrador — $19,901, 19.9%.
10. Manitoba — $20,592, 20.6%.
11. Nova Scotia — $20,751, 20.8%.
12. Prince Edward Island — $20,816, 20.8%.
13. Quebec — $21,818, 21.8%.
The spread is $5,572, and it is simply the provincial income tax spread halved — there is no provincial capital gains rate to differ, only the ordinary schedule applied to half the gain.
Where the inclusion rate comes from
Five documents, all from the CRA, each read on the date shown:
CRA — T4037 Capital Gains guide, which states the inclusion rate as one-half and does not mention two-thirds — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037/capital-gains.html
CRA — What's new for corporations: "It was later announced that this proposed increase was cancelled" — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/whats-new-corporations.html
CRA — Update on the administration of the proposed capital gains taxation changes: "reverted to administering the currently enacted capital gains inclusion rate of one-half" — read 2026-09-08. https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2025/update-cra-administration-proposed-capital-gains-taxation-changes.html
CRA — Line 25400, capital gains deduction (the lifetime capital gains exemption and its indexation) — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-25400-capital-gains-deduction.html
CRA — Capital losses and deductions (the three-year carry-back, the indefinite carry-forward and the superficial loss rule) — read 2026-09-08. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/capital-losses-deductions.html
And what this calculator does not do:
— The lifetime capital gains exemption is not applied. It shelters up to $1,250,000 of gains on qualified small business corporation shares and qualified farm or fishing property — the 2025 figure, with indexation resuming in 2026 and the indexed 2026 amount not yet published — and it has conditions this calculator cannot check.
— The principal residence exemption is explained but not applied to the main figure. Where a home qualified throughout, the gain is exempt entirely and there is nothing to calculate.
— Capital losses are not netted. They offset capital gains only — never other income — and can be carried back three years or forward indefinitely, which makes them a matter of which return they land on rather than of arithmetic.
— Alternative minimum tax is not calculated. A very large gain in one year can trigger it even where the ordinary calculation says otherwise.
— The adjusted cost base is taken as you enter it. In practice it is the hardest number in the whole exercise: it moves with reinvested distributions, return-of-capital, commissions, and improvements to a property, and getting it wrong is the commonest reason a capital gain is misreported.
Where to go next
Questions
- What is the capital gains inclusion rate in Canada?
- One half. The increase to two thirds proposed in Budget 2024 was deferred to January 2026 and then cancelled — the CRA's own "What's new for corporations" page says "It was later announced that this proposed increase was cancelled", and the T4037 guide states the rate as one-half without mentioning two thirds.
- How much tax will I pay on a $50,000 capital gain?
- $9,034 in Ontario with $100,000 of other income — 18.1% of the gain. Only $25,000 of it is taxable, so the effective rate is half your marginal rate of 31.5%.
- Do I pay capital gains tax on selling my home?
- Not if it was your principal residence for every year you owned it — the gain is exempt entirely. If it qualified for only part of the time, the exemption is prorated as (years designated + 1) ÷ years owned. Either way the sale must be reported on your return, and failing to report it can cost you the exemption.
- Can a capital loss reduce my employment income?
- No. Capital losses offset capital gains only. They can be carried back 3 years or forward indefinitely, so a loss with no gain to use it against is parked rather than wasted.
- Can I sell a stock at a loss and buy it back?
- Not within 30 days either side, and not into a spouse's account or your own RRSP. That is the superficial loss rule, and it deems the loss nil — the December sell-and-January-rebuy plan does not work.
- Are capital gains taxed less than dividends in Canada?
- At higher incomes, yes: a capital gain costs half your marginal rate whatever that rate is, while the dividend credit is a fixed percentage that matters less as your bracket rises. At modest incomes an eligible dividend can beat it, and can even be tax-free.
- How is the adjusted cost base calculated?
- Purchase price plus commissions and, for property, capital improvements — adjusted for reinvested distributions and any return of capital. It is the hardest figure in the exercise and the commonest reason a gain is misreported, because brokers do not always track it correctly across transfers.