Starting in 2024, Canada changed how capital gains are taxed. For 2026, you'll need to include 50% of your capital gains up to $250,000 in your income, and 66.67% (two-thirds) of gains above $250,000. This tiered approach means not all of your gain is taxable, and the portion that counts depends on how much you actually made. Understanding this calculation is essential for accurate tax planning and reporting. Before June 25, 2024, all Canadian taxpayers could exclude 50% of their capital gains from income. That meant only half your profit was taxable. Starting June 25, 2024 (and carrying forward into 2026), the CRA introduced a two-tier system that affects how much of your gains get counted. If your total capital gains in the year are $250,000 or less, you include 50% of that amount in your taxable income. This is the same treatment as before 2024. Example: You sell an investment property and realize a $200,000 capital gain. You include 50% of $200,000 = $100,000 in your income. For any capital gains above the $250,000 threshold, you include 66.67% (two-thirds) in your taxable income. This higher inclusion rate applies only to the excess amount.
No. Capital gains inside an RRSP are tax-deferred, meaning you don't pay tax on them when they occur. You only pay tax when you withdraw money from the RRSP. The inclusion rate applies only to capital gains realized outside registered accounts.
You would net the gains and losses first. Your net capital gain is $50,000 ($100,000 gain minus $50,000 loss). Since this is under $250,000, you include 50% of $50,000 = $25,000 in your taxable income.
No. Capital gains from selling your principal residence are fully exempt from tax under the principal residence exemption. They don't count toward your $250,000 threshold and don't trigger the higher inclusion rate.
If your capital losses exceed your gains, you can carry the excess back up to three years or forward indefinitely to offset capital gains in other years. You cannot use capital losses to offset other types of income like salary (with some limited exceptions for allowable business investment losses).
Your taxable income (including the capital gains inclusion amount) is used to calculate eligibility for Canada Child Benefit, GST/HST credit, and other income-tested benefits. A large capital gain could affect your benefit amounts in the following year.