Canada Capital Gains Tax
Detailed capital gains tax rates and rules for Canada in 2026.
Canada does not have a separate capital gains tax rate. Instead, 50% of capital gains (the 'inclusion rate') are added to taxable income and taxed at the individual's marginal rate. For high-income earners in provinces with top combined rates around 53-54%, this results in an effective capital gains tax rate of approximately 27%. For the 2024 tax year, the federal budget proposed increasing the inclusion rate to two-thirds (66.67%) on capital gains exceeding $250,000 annually for individuals, and on all capital gains for corporations and trusts. Capital losses can only be deducted against capital gains, with net capital losses carried back three years or carried forward indefinitely.
Standard Rate
27%
Exemptions
- Lifetime Capital Gains Exemption (LCGE) of $1,016,836 (2024) on qualifying small business corporation shares and farm/fishing property
- Principal residence exemption eliminates capital gains on the sale of a primary home
- Tax-Free Savings Account (TFSA) gains are entirely tax-free
- Registered Retirement Savings Plan (RRSP) and Registered Education Savings Plan (RESP) gains grow tax-deferred
- Gifts of publicly listed securities to registered charities are exempt from capital gains tax
- Reserves allow deferral of gains when proceeds are received over multiple years
How Canada Capital Gains compares
Canada’s capital gains tax rate of 27% is the 22nd highest of 203 countries TaxAtlas tracks, above the global average of 13.8% and North America’s regional average of 8.9%.
