Adjusted cost base including fees
Net proceeds after fees
Used to determine your marginal rate on the gain
Tax on Capital Gain
After-Tax Proceeds
This is the amount you keep after paying tax on your gain. Your original investment of $50,000 is returned to you tax-free — only the gain is taxed.
Tip: Holding investments in an RRSP or TFSA eliminates capital gains tax entirely.
How the Calculation Works
- Capital gain = Sale price − Purchase price (ACB)
- Taxable amount = Capital gain × 50% inclusion rate
- Tax = Taxable amount × your combined marginal rate
- After-tax profit = Capital gain − Tax
Capital Gains Tax Canada — FAQ
Common questions about how capital gains are taxed in Canada for 2026.
What is the capital gains inclusion rate in Canada?
Canada taxes only 50% of capital gains as income (the "inclusion rate"). A $20,000 capital gain adds $10,000 to your taxable income, then taxed at your marginal rate. This makes capital gains one of the most tax-efficient forms of income in Canada.
How does my province affect capital gains tax?
While the federal inclusion rate (50%) is the same across Canada, your combined marginal rate varies by province. An Albertan at $150,000 income pays capital gains tax at ~21.5% effective rate on the gain, while a Nova Scotian at the same income pays closer to ~27%. Use the calculator above to see your exact provincial impact.
Is my principal residence taxable?
Generally no. Canada's Principal Residence Exemption (PRE) shelters your home from capital gains tax for each year it was your principal residence. If you owned it for all years, the entire gain is exempt. If only for some years, the exemption is prorated.
What is the Adjusted Cost Base (ACB)?
The ACB is the original cost of an investment plus any additional costs such as brokerage commissions, legal fees on a property purchase, or the cost of additional shares bought over time. Using the correct ACB ensures you're not taxed on money that was originally invested — only on the true profit.
How can I defer or reduce capital gains tax?
Key strategies: (1) Hold investments inside an RRSP or TFSA to eliminate capital gains tax entirely. (2) Harvest capital losses in the same year to offset gains. (3) Defer the sale to a lower-income year. (4) Spread gain across multiple tax years using an installment sale.