🇨🇦 Canada Capital Gains Tax Guide

Canada does not have a separate capital gains tax rate. Instead, a portion of your capital gain (the Inclusion Rate) is added to your income and taxed at your marginal rate.

How Capital Gains Tax Works in Canada

Historically, 50% of capital gains were taxable. As of June 2024, the inclusion rate increased to 66.67% (2/3) for gains exceeding $250,000 in a year (for individuals), appearing on your T1 return.

•Base Inclusion Rate: 50% (First $250k gains)
•High Earner Inclusion Rate: 66.67% (Gains > $250k)
•Tax Rate: Your Marginal Income Tax Rate applies to the included amount
•TFSA/RRSP: Gains in these accounts are tax-sheltered

Example: Capital Gains Tax in Canada

Scenario

You earned $10,000 profit from stock sales. Your marginal tax rate is 40%.

Total Capital Gain$10,000
Taxable Amount (50% Inclusion)$5,000
Tax Free Amount (50%)$5,000
Tax Due (40% of Taxable $5k)$2,000
Effectively, you pay tax on only half the profit. Your effective tax rate on the whole gain is 20%.

Canadian Tax Strategies

TFSA Maximization

Prioritize filling your Tax-Free Savings Account (TFSA) limit. Withdrawals and gains are 100% tax-free.

Superficial Loss Rule

If you sell at a loss and rebuy within 30 days, the loss is denied and added to the cost base of the new shares.

RRSP Contributions

Invest via RRSP to defer taxes until withdrawal, though withdrawals are taxed as full income, not capital gains.

Tax Optimization Tools

Capital Gains Calculator
Calculate exact tax liability
Portfolio Risk Checker
Assess tax-adjusted returns
Disclaimer: This is general information only, not tax advice. Tax laws change frequently and vary by individual circumstances. Consult a qualified tax professional in Canada for your specific situation.