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Capital gains tax in Canada 2026
Only one half of a capital gain enters income, so the effective top rate is half your combined marginal rate — about 26.8% in Ontario, 24% in Alberta.
The big shelters: your principal residence is fully exempt (unless flipped within 12 months), and qualifying small-business, farm and fishing assets carry a CAD 1,275,000 (2026, indexation resumed) per-person lifetime exemption.
At a glance
- top rate
- Half the combined marginal rate — roughly 22% to 27.4%
- entry band
- Gains below personal credits effectively free
- tax year basis
- Calendar year
- filing deadline
- 30 April with the annual return
- residency basis
- Residents: worldwide gains; arrival step-up and departure tax bracket the residency period
- regime flag
- Principal residence: exempt; 12-month flips taxed as business income
Rates
Capital gains treatment (2026)
| Rate | Base | Applies to |
|---|---|---|
| Marginal rate on 50% of the gain | Half the net gain | Shares, funds, property and other capital assets |
| 0% | — | Principal residence (one per family unit; pro-rated for non-resident years) |
| 0% | Up to CAD 1,275,000 (2026, indexation resumed) lifetime | Qualifying small-business shares and farm/fishing property |
| 0% | — | Personal-use items sold under CAD 1,000; injury damages; life insurance death benefits |
| Full marginal rate | Whole profit | Homes sold within 12 months of purchase (flipping rule) and dealer-type activity |
Thresholds & allowances
- Inclusion rate50%
The proposed rise to two-thirds was abandoned — half remains the rule
- Spousal rolloverAutomatic
Transfers to a spouse (in life or at death) defer gains at cost, with attribution of future income to the transferor
- LossesAgainst gains only
Capital losses offset gains, carry back 3 years and forward indefinitely; personal-use property losses denied
Residency
Residency trigger
Residents pay on worldwide gains; immigrants receive a fair-market-value cost base on arrival, and emigrants face the departure-tax deemed sale on leaving.
Non-resident treatment
Non-residents are taxed on 'taxable Canadian property' — chiefly Canadian real estate and resource property — at ordinary half-inclusion rates, with clearance procedures collecting the tax at sale.
Notes
- Death is the realization event: the deceased is deemed to sell everything at market value, with tax in the final return — the spousal rollover defers it to the second death.
- Employee stock options can achieve capital-gains-equivalent treatment when granted at market value on common shares (special rules for Canadian-controlled private companies).
- Digital assets held as investments follow the same half-inclusion rules; inventory-style trading is business income.
- Non-Canadians remain barred from buying residential property until 1 January 2027 under the federal moratorium.
FAQ
How are capital gains taxed in Canada?
Half the gain joins your income — so at Ontario's 53.53% top rate the effective charge is about 26.8%; the 50% inclusion rate survived the abandoned 2024 reform.
Is my home tax-free?
Yes — the principal residence exemption covers the full gain, but homes sold within 12 months of purchase are taxed as fully included business income unless a life event forced the sale.
What is the lifetime exemption?
CAD 1,275,000 (2026, indexation resumed) of gains per person on qualifying small-business corporation shares and farm or fishing property, indexed from 2026.
Figures: tax year 2026, compiled from public sources. Not tax advice.