Rental property sale calculator
Capital gain plus recaptured CCA when you sell a rental, and the extra tax for the year.
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 and purchase prices, the land share, improvements, selling costs and the CCA you claimed, and the calculator splits the sale into recapture and capital gain and shows the 2026 tax.
- Recaptured CCA is fully taxable. The capital gain is half taxable.
- Example: an Ontario rental bought for $400,000 and sold for $650,000, with $30,000 of selling costs and $40,000 of CCA claimed: $40,000 of recapture plus a $220,000 gain, about $63,700 of tax on top of an $80,000 salary.
- The split between land and building, at purchase and at sale, changes both numbers.
- If you ever lived in it, the principal residence and change-of-use rules come in; get those right before you file.
Rental Property Sale Calculator
Selling a rental is two tax events wearing one coat. The depreciation you claimed over the years comes back as ordinary income, and the rest of the profit is a capital gain. Landlords who skipped CCA to keep things simple get a smaller recapture; landlords who claimed it get the bill now. The calculator separates the two so you can see which is which.
Two Kinds of Income in One Sale
Recaptured CCA. If you claimed capital cost allowance on the building, the part you claimed comes back as regular income when you sell for more than the building's remaining value. All of it is taxable, not half; see CCA on rentals.
Capital gain. The rest of the profit, on the land and the building, is a capital gain. Half is taxable; see rental capital gains.
Want the sale done properly, forms included?
The Rental Sale SmartFile works out the land and building split, the recapture, the capital gain and the forms, and flags change-of-use and principal residence issues.
The Land Split Matters
CCA is only allowed on the building, never the land. The split between land and building at purchase and at sale changes both the recapture and the gain. Property assessments or an appraisal are the usual evidence.
When to Get Help
- You lived in the property at any point, or rented part of your home: see change of use and renting part of your home.
- The building sold for less than its remaining value while the land went up: a special rule moves part of the land gain to the building.
- You owned it with someone else, or through a corporation or partnership.
- You're a non-resident: the clearance certificate rules apply; see non-resident tax.
Rental Sale Calculator Questions
How is the sale of a rental property taxed in Canada?
Any capital cost allowance you claimed comes back as fully taxable recapture, and the rest of the profit is a capital gain, half of which is taxable. Selling costs reduce the gain.
What is recaptured CCA?
The depreciation (capital cost allowance) claimed on the building over the years that is added back to income when you sell the building for more than its remaining undepreciated cost.
Do I pay tax on the land when I sell a rental?
Yes, as part of the capital gain. Land can’t be depreciated, so there is no recapture on it, but its increase in value is a capital gain.
Can I avoid recapture by not claiming CCA?
If you never claimed CCA there is nothing to recapture, but you also gave up the deductions while you owned it. Claiming CCA defers tax rather than avoiding it.
What if I lived in the rental property at some point?
Part of the gain may be covered by the principal residence exemption, and change-of-use rules may apply. The calculator doesn’t handle this; get the years and designations right first.
Sources: CRA, Guide T4036, Rental Income; CRA, Guide T4037, Capital Gains. 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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