Capital gains tax in Canada in 2026

For 2026, one half of a capital gain is included in income. Sell shares for $40,000 that cost you $25,000, with $100 of commission, and the gain is $14,900. The taxable amount is $7,450. That $7,450 is stacked on your other income and taxed at your marginal rate — it is not taxed at a flat “capital gains rate.”

The proposed increase of the inclusion rate above a $250,000 annual threshold did not become the rule you should plan on. We still use one half, and we will tell you if a return we prepare is filed under a different enacted rate.

Keep the cost base

Your adjusted cost base includes purchase price and most commissions. Reinvested distributions on a mutual fund raise the cost base; ignoring them means you pay tax twice. A principal residence is generally sheltered by the principal-residence exemption if it qualifies and you report the sale. A cottage or a rental is not automatically sheltered.

The capital-gains calculator estimates the Ontario tax on the taxable half. It does not model the lifetime capital gains exemption on qualified small-business shares, which has its own tests.