How capital gains tax works in Canada
Canada does not usually apply a standalone flat capital-gains rate. Under the enacted 2026 framework, one-half of a net capital gain is generally included in taxable income and taxed at the individual's federal and provincial or territorial marginal rates.
The federal government decided not to proceed with the proposed increase to a two-thirds inclusion rate. The 50% rule therefore remains the practical general rule for 2026, subject to special provisions and any later legislative change.
Shares, funds, cryptoassets, investment property and other capital property can produce capital gains. Frequent or organised trading, property flipping and business-like activity can instead be treated as business income, which is not entitled to the ordinary capital-gains treatment.
A qualifying principal residence can be sheltered by the principal residence exemption, but the property must be designated and the family-unit, ownership and reporting rules must be checked. Rental, cottage and mixed-use property can produce only partial relief.
When a Canadian resident emigrates, Canada generally deems many assets to have been disposed of at fair market value. Canadian real property, Canadian business property and several registered rights are among the exclusions, and an election can defer payment in qualifying cases.
At death, a taxpayer is generally deemed to have disposed of capital property immediately before death. A spousal or common-law partner rollover can defer the gain when its conditions are met, while the principal residence exemption and other special rules may reduce the final return.
Tax rates at a glance
- Capital gains tax
- 50% inclusion
- General capital-gains inclusion
- 50%Enacted 2026 rule
- Tax on the included amount
- Marginal rates
- Principal residence
- Potential exemption
- Lifetime capital gains exemption
- Indexed from $1.25m
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsCrypto holdersFoundersProperty ownersCross-border investors
Watch out for
- The 50% inclusion rate is not a 50% tax rate. The included half is taxed through the ordinary federal and provincial income-tax schedules, and a large gain can reach the highest marginal brackets.
- The proposed two-thirds inclusion-rate change was not enacted as announced. Do not use old 2024 Budget summaries as the current rule, and recheck the CRA position before filing a large 2026 transaction.
- Crypto-to-crypto swaps, staking, lending, mining and frequent trading each need their own analysis. A pattern that looks like a business can be taxed as ordinary business income instead of a capital gain.
- The principal residence exemption is not an automatic exemption for every home sale. A cottage, rental property, change of use, multiple residences or missing designation can materially change the result.
- Departure-tax payment can sometimes be deferred, but the election deadline, excluded property, information-return and security rules need to be checked before assets are moved or pledged.
Frequently asked questions
What is Canada's capital-gains tax rate?
Canada generally includes 50% of a net capital gain in taxable income. The included amount is taxed at the taxpayer's federal and provincial or territorial marginal income-tax rates, so the effective tax depends on the person and the province.
Are crypto gains taxed in Canada?
Usually yes. An investor may have a capital gain with a 50% inclusion rate, while a trader or business may have fully taxable business income. The transaction history, frequency, intention and financing are important.
Does Canada have an exit tax?
Yes. When an individual stops being a Canadian tax resident, Canada generally treats many assets as sold at fair market value. Canadian real estate and several other categories are excluded from the normal deemed disposition, and payment can sometimes be deferred with the required election and security.