In Canada, you don't pay a separate "capital gains tax." Instead, a portion of your capital gains is added to your income and taxed at your marginal tax rate. For 2026, the inclusion rate (the percentage of gains that counts as income) is 50% on the first $250,000 of gains and 66.67% on gains above that threshold. This means if you sell an investment for $10,000 more than you paid, only $5,000 (or $6,667 on excess gains) gets added to your taxable income, not the full $10,000. Your actual tax bill depends on your province, total income, and which tax bracket you fall into. A capital gain happens when you sell an asset (stocks, real estate, cryptocurrency, art, or other property) for more than you paid for it. That profit is only taxable when you realize it, meaning you sell the asset. If you buy shares and they grow in value but you never sell them, there's no tax owed yet. The CRA taxes capital gains differently than other income because capital gains are usually one-time events rather than regular earnings. This more favorable treatment encourages saving and investing.
No. You only report the gain on your tax return for the year you sold the asset. You have until June 15 the following year to file. If you owe tax, it's due by April 30.
Capital losses can only reduce capital gains, not other income like salary or employment income. You can carry unused losses back three years or forward indefinitely to offset future capital gains.
For most homeowners, the exemption is automatic. The CRA doesn't ask you to report the gain on your main home. However, if you own multiple properties or your home was used for business, you may need to file Form T776 or T2091.
Cost basis includes what you paid for the asset plus any expenses directly tied to buying it (like brokerage commissions or legal fees). Selling costs (like commissions when you sell) also reduce your gain. Keep receipts and statements as proof.
Each calendar year, your first $250,000 of capital gains is taxed at the 50% inclusion rate. Any gains beyond that are taxed at 66.67%. This applies per individual, so spouses can each claim the threshold in their own names.