Calculate your Canadian capital gains tax under the 2024 inclusion rate changes — old vs new rules side by side.
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A capital gain occurs when you sell an asset for more than you paid for it. In Canada, only a portion of your capital gain is included in your taxable income — this is called the inclusion rate.
Effective June 25, 2024, the federal government increased the capital gains inclusion rate from 50% to 66.7% on capital gains above $250,000 per year for individuals. Below $250,000, the 50% inclusion rate still applies. This means if you sell a cottage with a $500,000 gain, the first $250,000 is included at 50% and the remaining $250,000 at 66.7%.
If the property was your principal residence for all or part of your ownership, you may be able to eliminate or reduce the capital gain using the Principal Residence Exemption (PRE). The formula is: (years designated + 1) ÷ total years owned × capital gain = exempt amount.
If you're selling qualifying small business corporation shares or qualified farm/fishing property, you may be eligible for the Lifetime Capital Gains Exemption. For 2025, the LCGE limit is $1,016,602 — meaning up to that amount of capital gains can be sheltered from tax entirely.
Your ACB is what you originally paid for the asset, plus any capital improvements (for property) or additional purchases (for stocks). Selling expenses like real estate commissions and legal fees are deducted from your proceeds before calculating the gain.
This calculator provides estimates based on 2025 federal tax brackets and provincial top marginal rates. Actual tax owing depends on your complete tax situation. The 2024 inclusion rate change remains subject to parliamentary confirmation. Consult a tax professional for personalized advice.