How much tax do I pay on capital gains in Canada?
Robert Miller
Updated on March 07, 2026
50%
Capital gains are 50% taxable. The amount of tax you pay on a capital gain depends on your annual income. That means 50% of the amount you made from selling your investment is added to your income, and then your personal tax rate is applied to the total.
How much capital gains is tax free in Canada?
Amount of Exemption The amount of the exemption is based on the gross capital gain that you make on the sale. However, since only 50 percent of any capital gain is taxable in Canada, the actual amount of the exemption will be a little over $400,000 of taxable capital gain.
How much tax do you pay on capital gains?
2020 capital gains tax rates
| Long-term capital gains tax rate | Your income |
|---|---|
| 0% | $0 to $80,000 |
| 15% | $80,001 to $496,600 |
| 20% | $496,601 or more |
| Short-term capital gains are taxed as ordinary income according to federal income tax brackets. |
How are capital gains tax calculated in Canada?
How Are Capital Gains Calculated? The capital gains tax is the same for everyone in Canada — currently 50%. So, for example, if you buy a stock at $100, and it earns $50 in value when you sell it, the total capital gain amount is $50. You would pay the marginal tax rate on the $50 capital gain — in this case, $25.
Are there any tax shelters for capital gains in Canada?
An RRSP is one of the most popular tax-shelters in Canada. You don’t pay any capital gains on any profit you make inside this account. When you withdraw funds you will be taxed at your full marginal rate because you did not pay tax on your income when you contributed.
What is the inclusion rate for capital gains in Canada?
The inclusion rate for the capital gains tax is the same for everyone, but the amount of tax you pay depends on your total income, personal situation and your province of residence. As of 2020, the capital gains inclusion rate is 50%. Choose the right time to sell investments.
Is there a lifetime capital gains exemption in Canada?
Donate assets to a registered charity or private foundation. Those who own a small business, farm, or fishing property can use the Lifetime Capital Gains Exemption (LCGE).
