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Capital Gains Tax Calculator

2025
Capital Gain Details
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Affects marginal tax rate on gains

Tax Summary

Total Capital Gains Tax

$38,705.16

Net Proceeds After Tax

$251,294.84

Effective Rate

13.35%

Marginal Rate

37.16%

Calculation Breakdown
Sale Proceeds$500,000.00
Adjusted Cost Base-$200,000.00
Selling Expenses-$10,000.00
Capital Gain$290,000.00

Inclusion Rate Breakdown

$290,000.00 at 50% inclusion$145,000.00
Taxable Capital Gain$145,000.00
Inclusion Rate50.00%
Federal Tax on Gain$25,155.25
Provincial Tax (Ontario)$13,549.91
Total Capital Gains Tax$38,705.16
Net Proceeds After Tax$251,294.84
More Information
Frequently Asked Questions
In Canada, only a portion of your capital gain is included in your taxable income. For 2025, the first $250,000 of capital gains is included at 50% (so $125,000 is taxable). Capital gains exceeding $250,000 are included at 66.67% (two-thirds). This means the effective tax rate on capital gains is roughly half of your marginal tax rate for smaller gains, and about two-thirds of your marginal rate for larger gains.
Starting in 2025, the federal government introduced a tiered inclusion rate system. The first $250,000 of annual net capital gains realized by an individual continues to benefit from the 50% inclusion rate. Any capital gains above $250,000 in a given year are included at 66.67%. This threshold resets each tax year. For corporations and trusts, the 66.67% rate applies from the first dollar.
The principal residence exemption (PRE) allows you to shelter capital gains on the sale of your home from tax. If the property was your principal residence for every year you owned it, the entire gain is exempt. If it was your principal residence for only some years, a partial exemption applies using the formula: (years designated + 1) / years owned. You can only designate one property as your principal residence per year, and you must report the sale on your tax return.
The ACB is the cost of acquiring the property plus any additions or improvements, less any returns of capital. For shares, it includes the purchase price plus commissions. If you purchased identical shares at different prices, you must use the average cost method (total cost of all identical shares divided by the number of shares). Inherited property generally has an ACB equal to the fair market value at the date of death.
Yes, capital losses can be deducted against capital gains in the same year. If your capital losses exceed your capital gains, the net capital loss can be carried back 3 years or carried forward indefinitely to offset capital gains in other years. Allowable capital losses (50% of the loss) can only be applied against taxable capital gains, not other types of income. Superficial losses (where you repurchase the same property within 30 days) are denied.
The CRA treats cryptocurrency as a commodity. Gains from disposing of cryptocurrency (selling, trading, or using to purchase goods/services) are typically treated as capital gains and taxed at the inclusion rate. However, if you are in the business of trading cryptocurrency, the gains may be treated as business income (100% taxable). The determination depends on factors such as frequency of transactions, period of ownership, and trading knowledge.
The distinction between a capital gain and business income is important because business income is 100% taxable while only a portion of capital gains is taxable. The CRA considers several factors: your intention when acquiring the property, the nature of the property, how long you held it, frequency of similar transactions, work done to make the property saleable, and your course of conduct. If you buy and sell assets frequently or as part of a business, the gains are more likely to be treated as business income.

CRA-Aligned: This calculator uses 2025 capital gains inclusion rates and federal/provincial tax brackets. The $250,000 threshold for the higher inclusion rate applies to individuals. Corporations and trusts face the 66.67% rate from the first dollar. Consult a tax professional for your specific situation.

Understanding Capital Gains Tax in Canada

How the CRA taxes profits from selling investments, property, and other assets

What is the capital gains inclusion rate?

In Canada, you do not pay tax on the full capital gain. Only a portion — called the inclusion rate — is added to your taxable income. For 2025, the first $250,000 of capital gains is included at 50%. Any gains above $250,000 are included at 66.67%. So on a $100,000 gain, only $50,000 is taxable.

How do you calculate the actual gain?

Your capital gain is the sale price minus your Adjusted Cost Base (ACB) and any selling expenses. The ACB is what you originally paid for the asset, plus any costs to acquire it such as commissions. For example, if you bought shares for $20,000 and sold them for $35,000 with $500 in fees, your gain is $35,000 - $20,000 - $500 = $14,500.

What is the principal residence exemption?

If you sell your home and it was your principal residence for every year you owned it, the entire capital gain is tax-free. You can only designate one property as your principal residence per year. You must report the sale on your tax return even though the gain is exempt. If you owned the home for only part of the time, a partial exemption applies.

Can capital losses reduce your tax?

Yes. If you sell an asset for less than you paid, you have a capital loss. You can use capital losses to offset capital gains in the same year. If your losses exceed your gains, you can carry the net loss back 3 years or forward indefinitely. However, capital losses can only be used against capital gains, not other types of income.

How does your province affect the tax rate?

Capital gains are taxed at your combined federal and provincial marginal rate, but only on the included portion. In Ontario, someone in the top bracket might pay a combined marginal rate of about 53.53%. At a 50% inclusion rate, the effective tax on a capital gain would be roughly 26.76%. Provinces like Alberta have lower top rates, meaning less tax on gains.

Are there special rules for corporations?

Yes. For corporations and trusts, the 66.67% inclusion rate applies from the first dollar of capital gains — there is no $250,000 threshold at the lower rate. This means corporate investors pay tax on a larger portion of their gains compared to individuals who benefit from the 50% rate on the first $250,000.

What about cryptocurrency gains?

The CRA treats cryptocurrency as a commodity, so selling, trading, or spending crypto triggers a capital gain or loss. The same inclusion rates apply. However, if you trade crypto frequently as a business, the CRA may treat your gains as fully taxable business income instead of capital gains. Keep detailed records of all your crypto transactions.

CRA-Aligned: Based on 2025 CRA rates and thresholds. For personal advice, speak to a qualified accountant or tax professional.

Disclaimer: This calculator provides estimates based on current CRA rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant before making financial decisions. Read our terms

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