Capital gains tax calculator
Tax on the sale of an investment, a cottage or a property, with the principal residence exemption for a home you lived in.
Want this number lower?
The Lower My Tax report takes these numbers, tests every legal way to cut the bill, and shows the saving of each in dollars, with what to do and by when.
The short version
- Enter the sale price, your cost and selling costs, and the calculator shows the capital gain, the taxable half, the extra tax for 2026 and what you keep.
- Selling a home? Add the years you owned it and the years it was your principal residence, and it applies the exemption, including the plus-one rule.
- Example: shares bought for $35,000 and sold for $60,000 with $500 of fees: a $24,500 gain, $12,250 taxable, about $3,700 of tax on top of a $90,000 Ontario salary.
- Half of a capital gain is taxable in 2026. The proposed increase to two-thirds was cancelled in March 2025.
- Even a fully exempt home sale has to be reported on Schedule 3 and form T2091(IND).
Capital Gains Tax Calculator
A capital gain is the one kind of income where the tax depends as much on your paperwork as on the market. The cost you can prove, the selling costs you remember, and the years you call home all change the bill. This calculator does the arithmetic; the sections below cover what goes into each box.
How the Gain Is Worked Out
Sale price, minus what you paid plus improvements (the adjusted cost base), minus selling costs such as commission and legal fees. Half of the gain is added to your income for the year and taxed at your rates. For shares bought at different times, your cost is the average; use the ACB calculator and see adjusted cost base.
Selling a home or cottage?
The Home and Cottage Sale SmartFile works out the principal residence exemption year by year, picks the best designation, and fills in Schedule 3 and form T2091.
Principal Residence
If the property was your home for some of the years you owned it, the exemption covers this share of the gain: (1 + years designated as your principal residence) divided by the years you owned it. The "1 +" is why a family that owns two homes in the same year can often shelter more than it expects. A family unit can designate only one home per year; see the principal residence exemption and cottage capital gains.
Even when the whole gain is exempt, you must report the sale on Schedule 3 and form T2091(IND). Leaving it off can cost a penalty and keeps the year open for CRA; see reporting a home sale.
What It Leaves Out
- Capital losses carried forward from other years; see capital losses. And the lifetime capital gains exemption for small business shares and farm or fishing property.
- Rental buildings, where CCA claimed comes back as income. Use the rental property sale calculator.
- Gains that are really business income, such as frequent trading or flipping; see capital gains vs business income.
Capital Gains Calculator Questions
How is capital gains tax calculated in Canada?
Subtract your adjusted cost base and selling costs from the sale price. Half of that gain is added to your income and taxed at your marginal rate for the year.
What is the capital gains inclusion rate for 2026?
50%. The increase to two-thirds on gains over $250,000 that was proposed in 2024 was cancelled in March 2025.
Do I pay capital gains tax on selling my home?
Not if it was your principal residence for every year you owned it. You must still report the sale on Schedule 3 and form T2091(IND).
Can I reduce capital gains tax?
Common ways include using capital losses, timing the sale for a lower-income year, contributing to an RRSP in the year of the sale, donating shares to charity, and choosing the best years to designate as your principal residence.
Does the calculator include capital losses?
No. Subtract any net capital losses you are applying from the gain yourself, or ask the assistant to include them.
Sources: CRA, Guide T4037, Capital Gains; CRA, Folio S1-F3-C2, Principal Residence. Checked October 2026. Estimates only, based on the 2026 rules as last checked. CanadianTaxes.ai is not the Canada Revenue Agency and does not give tax advice.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.
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