Capital Gains Tax Calculator Canada

What Is a Capital Gain?

A capital gain arises when you sell a capital property (stocks, real estate, investment property, business assets) for more than you paid for it. The gain is the difference between the proceeds and your Adjusted Cost Base (ACB).

How Capital Gains Tax Works in Canada (2025)

• Capital gain = Proceeds − Adjusted Cost Base
• 50% of the capital gain is included in taxable income (one-half)
• This flat 50% rate applies to all capital gains, regardless of amount
• Taxable portion added to your other income
• Tax calculated at your combined marginal rate for that income

What Is Adjusted Cost Base (ACB)?

The ACB is your total cost of acquiring a property, including the purchase price, commissions, legal fees, and improvements. For stocks, ACB includes all purchases and reinvested dividends. Accurate ACB tracking is critical for correct capital gains reporting.

How to Calculate Capital Gains Tax in Canada (Step by Step)

Here is how to calculate capital gains tax in Canada, whether you are selling property, stocks, or other investments. Follow these five steps:

1. Find your proceeds of disposition — the amount you sold the asset for (selling price minus any selling costs like commissions or legal fees).
2. Determine your Adjusted Cost Base (ACB) — what you originally paid, plus purchase costs and the cost of any improvements.
3. Calculate the capital gain — subtract the ACB from the proceeds: Capital Gain = Proceeds − Adjusted Cost Base.
4. Apply the 50% inclusion rate — only one-half of the capital gain is taxable in Canada. Multiply the gain by 50%.
5. Apply your marginal tax rate — add the taxable half to your other income and tax it at your combined federal-and-provincial marginal rate.

Example — how to calculate capital gain tax in Canada: You sell a rental property for $500,000 with an ACB of $350,000. Your capital gain is $150,000. The taxable portion is 50%, or $75,000. If your marginal rate is 40%, your capital gains tax is roughly $30,000. Use the calculator above to run your own numbers instantly.

To calculate capital gains tax on the sale of a property specifically, the same five steps apply — just make sure your ACB includes closing costs, legal fees, and capital improvements (not routine repairs), as these reduce your taxable gain.

Principal Residence Exemption

If you sell your principal residence, the entire gain may be exempt from tax under the Principal Residence Exemption. You must designate the property as your principal residence for each year you own it. This calculator does not apply the PRE — consult an accountant if selling your home.

Capital Losses

Capital losses can offset capital gains in the same year. Unused losses can be carried back 3 years or forward indefinitely to offset future gains.