Capital gains calculator

Last updated: May 6, 2022

What is a capital gain?

A capital gain refers to the increase in the value of a capital asset when you sell it for more than what you originally paid for it. Capital properties can include cottages, land, buildings, equipment used in a business or rental operation as well as stocks, bonds and units of a mutual fund trust. The capital gains tax rates will vary depending on the province you live in since provincial tax brackets vary. In Canada, 50% of the value of any capital gains is taxable, so if you sell a property or investment for more than what you originally paid for it, you will have to add 50% of the capital gains to your income. You will then be taxed based on your tax bracket.

How do I calculate capital gains tax?

To calculate capital gains tax, the formula is as follows:

Proceeds of disposition – (adjusted cost base + expenses on disposition) = capital gain

Then to determine the amount to add to your income tax and benefit return, you will multiply your capital gains by 50%.

With the Perch capital gains tax calculator, you can easily determine the amount of capital gains tax you will have to pay. This will be based on your tax bracket as well as the province you live in. If you are still unsure, it’s best to speak with your mortgage advisor to learn more about capital gains tax. Whether you are a buyer or homeowner, Perch has tools to help you quickly do those complicated calculations so you can reach your goals faster.

Are there any capital gains tax exemptions?

  • Lifetime capital gains exemption (LCGE)

    Also known as the capital gains deduction, if you are eligible, you are entitled to a cumulative lifetime capital gains exemption (LCGE) on net gains realized on the disposition of qualified property. This exemption also applies to reserves from these properties brought into income in a tax year. Capital properties eligible for the LCGE can include qualified small business corporation shares and qualified farm or fishing property. The lifetime limit refers to the total amount of LCGE you can claim throughout your lifetime.

  • Principal residence exemption

    This income tax benefit provides you with an exemption from tax on the capital gain when you sell the property that is your principal residence. To be eligible, you can only have one principal residence at a time. If you have a spouse, you may only have one principal residence between the both of you. Another important thing to note is that if there was a time in your ownership where the property was not your principal residence, you won’t be eligible to receive the full tax exemption. The exemption will be calculated based on the number of years that your property was your principal residence.

  • Exemptions on capital gains for donations
    You might be exempt from paying capital gains tax on certain assets that you donate to a registered charity or other organizations. Some assets that are eligible for this exemption would be:

    • a share of the capital stock of a mutual fund corporation
    • a unit of a mutual fund trust
    • a prescribed debt obligation
    • an interest in a related segregated fund trust
    • ecologically sensitive land

You will still be required to report any capital gains and losses of these donations on your capital gains tax forms and will need to fill out a separate form to receive the exemption.

Capital gains on gifted property

Generally, you don’t have a capital gain or loss if you give capital property to your spouse or common-law partner. You might be able to save on capital gains tax as a family if you transfer capital property to your spouse if they are in a lower income tax bracket.

At the time you give the gift, depending on the type of property you give, you are considered to receive an amount equal to one of the following:

  • the undepreciated capital cost for depreciable property
  • the adjusted cost base for other types of capital property

Terms to know

Adjusted cost base (ACB) – This refers to the change in an asset’s value or cost resulting from improvements, new purchases, sales, payouts or other factors. It is the cost of the property plus any expenses to acquire it, such as legal fees and commissions. However, you won’t be able to add current expenses like maintenance and repair costs to the cost base of the property.

Capital gains tax rate – In Canada, 50% of the value of any capital gains are taxable. So if you sell your investment at a higher price than you paid, you will need to add 50% of the capital gain to your income. The amount of additional tax you will pay will depend on how much you’re making and other sources of income you have.

Proceeds of disposition – This refers to the sale price of the property and is the amount you received for your property. This can also include compensation for destroyed or stolen property

Capital gains tax rates by province

Capital gains tax rate in Ontario

Lower Limit Upper Limit Capital Gains Tax Rate
$0 $13,229 0.00%
$13,230 $15,714 7.50%
$15,714 $20,644 12.55%
$20,645 $44,740 10.03%
$44,741 $48,535 12.08%
$48,536 $78,786 14.83%
$78,787 $89,482 15.74%
$89,483 $92,827 16.95%
$92,828 $97,069 18.95%
$97,070 $150,000 21.70%
$150,001 $150,473 22.48%
$150,474 $214,368 24.09%
$214,369 $220,000 25.98%
$220,001 Infinity 26.76%

Capital gains tax rate in British Columbia

Lower Limit Upper Limit Capital Gains Tax Rate
$0 $13,229 0.00%
$13,230 $20,698 7.50%
$20,699 $34,556 11.81%
$34,557 $41,725 10.03%
$41,726 $48,535 11.35%
$48,536 $83,451 14.10%
$83,452 $95,812 15.50%
$95,813 $97,069 16.40%
$97,070 $116,344 19.15%
$116,345 $150,473 20.35%
$150,474 $157,748 21.96%
$157,749 $214,368 23.01%
$214,369 $220,000 24.90%
$220,001 Infinity 26.75%

Capital gains tax rate in Alberta

Lower Limit Upper Limit Capital Gains Tax Rate
$0 $13,229 0.00%
$13,230 $19,369 7.50%
$19,370 $48,535 12.50%
$48,536 $97,069 15.25%
$97,070 $131,220 18.00%
$131,221 $150,473 19.00%
$150,474 $157,464 20.61%
$157,465 $209,952 21.11%
$209,953 $214,368 21.61%
$214,369 $314,928 23.50%
$314,929 Infinity 24.00%

Capital gains tax rate in Manitoba

Lower Limit Upper Limit Capital Gains Tax Rate
$0 $9,838 0.00%
$9,839 $13,229 5.40%
$13,230 $33,389 12.90%
$33,390 $48,535 13.88%
$48,536 $72,164 16.63%
$72,165 $97,069 18.95%
$97,070 $150,473 21.70%
$150,474 $214,368 23.31%
$214,369 Infinity 25.20%

Capital gains tax rate in Nova Scotia

Lower Limit Upper Limit Capital Gains Tax Rate
$0 $11,894 0.00%
$11,895 $13,229 4.40%
$13,230 $15,000 11.90%
$15,001 $21,000 14.40%
$21,001 $29,590 11.90%
$29,591 $48,535 14.98%
$48,536 $59,180 17.73%
$59,181 $93,000 18.59%
$93,001 $97,069 19.00%
$97,070 $150,000 21.75%
$150,001 $150,473 23.50%
$150,474 $214,368 25.11%
$214,369 Infinity 27.00%