Capital Gains Tax Calculator Canada — Investment Property
Selling an investment property or rental unit in Canada? Capital gains tax is owed on 50% of your profit. Know your exact tax bill before you sell — including adjusted cost base, realtor commissions, and the difference between investment vs. principal residence treatment.
What you'll need
- Original purchase price
- Expected sale price
- Whether it's an investment property or your principal residence
- Your approximate marginal tax rate
How it works
Enter purchase price and expected sale price
We estimate your closing costs at purchase (1.5% for legal, inspection) and at sale (4% for realtor commission and legal fees) to calculate the adjusted cost base and net proceeds.
Indicate investment property or principal residence
Principal residences are fully exempt from capital gains tax under Canada's principal residence exemption. Investment and rental properties are fully taxable on 50% of the gain.
See your capital gain, taxable amount, and estimated tax
We apply the 50% inclusion rate and your estimated marginal tax rate to show the exact tax owing, net profit after tax, and your effective tax rate on the gain.
Capital Gains on a $550K→$900K Investment Property Sale
| Item | Amount |
|---|---|
| Sale price | $900,000 |
| Less selling costs (4%) | −$36,000 |
| Proceeds of disposition | $864,000 |
| Adjusted cost base | $558,250 |
| Capital gain | $305,750 |
| Taxable gain (50%) | $152,875 |
| Tax at 43% marginal rate | $65,736 |
| Net profit after tax | $240,014 |
Closing costs at purchase estimated at 1.5% of purchase price. Actual ACB may be higher with capital improvements.
Frequently asked questions
What is the capital gains inclusion rate in Canada?
For most individuals, 50% of a capital gain is 'included' in taxable income and taxed at your marginal rate. This means if you make a $200,000 capital gain, $100,000 is added to your income. The 2024 federal budget proposed raising the inclusion rate to 2/3 for gains over $250,000 annually for individuals — this may affect high-value property sales.
Is my home sale exempt from capital gains tax in Canada?
If the property was your principal residence for every year you owned it, the full gain is exempt under the principal residence exemption. If you rented it out or used it as a secondary property for some years, only the years it was your principal residence may be exempt. You must designate it on your tax return.
How is the adjusted cost base calculated for a Canadian property?
The adjusted cost base (ACB) = original purchase price + closing costs paid at purchase (legal fees, land transfer tax, inspection) + capital improvements (major renovations that add value). Routine repairs and maintenance are not included. A higher ACB means a lower capital gain and less tax.
When is capital gains tax due on a Canadian property sale?
Capital gains are reported on your T1 income tax return for the year the property is sold. The tax is due by April 30 of the following year. If your capital gain is large, you may owe tax instalments — consult a CPA to avoid penalties.
Know your after-tax profit before you sign the listing agreement.
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