Canada Capital Gains Tax Calculator 2021

Canada Capital Gains Tax Calculator 2021

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    Published 10/12/2021 15:12 EST

    A capital gain occurs when you sell, or are considered to have sold, a capital property for more than the total of its adjusted cost base and the expenses incurred in selling the property. Some common types of capital property are: cottages; land, buildings and equipment used in a business or rental operation; and securities such as stocks, bonds and units of a mutual fund trust. Capital property doesn’t, however, include the trading assets of a business, such as inventory. Nesto’s capital gains tax calculator will help you determine the amount of capital gains tax you’ll have to pay based on your tax bracket and the province in which you live.

    Key Takeaways
    • In Canada, 50% of the value of any capital gains is taxable: If you sell an investment at a higher price than you paid, you’ll have to add 50% of the capital gains to your income
    • Capital gains tax rates are dependent on the province in which you live since provincial tax brackets vary
    • There are several capital gains tax exemptions to be aware of, including those on your principal residence

    Capital gains tax in Canada

    In Canada, 50% of the value of any capital gains is taxable. In other words, if you sell an investment at a higher price than you paid (realized capital gains), you’ll have to add 50% of the capital gains to your income. You’re then taxed based on your particular province’s tax bracket. (See: Capital gains tax rates by province below.) 

    How to calculate capital gains tax

    Capital gains tax is calculated as follows: Proceeds of disposition – (Adjusted cost base + Expenses on disposition) = Capital gain. And since 50% of the value of any capital gains is taxable, you must then multiply the capital gains by 50% to determine the amount to add to your income tax and benefit return.

    ❗️ Important

    It’s always wise to speak with your accountant before filing your taxes, but particularly in a year when you’ve realized capital gains

    Adjusted cost base (ACB)

    The adjusted cost base for real estate is the cost of a property plus any expenses to acquire it, such as commissions and legal fees. The cost of a capital property is its actual or deemed cost, depending on the type of property and how you acquired it. It also includes capital expenditures, such as the cost of additions and improvements to the property. You can’t add current expenses, such as maintenance and repair costs, to the cost base of a property.

    Proceeds of disposition

    The proceeds of disposition is the amount you received, or will receive, for your property. In most cases, this refers to the sale price of the property. This could also include compensation you received for property that has been destroyed, expropriated or stolen.

    Capital gains inclusion rate

    The capital gains inclusion rate is 50% in Canada, which means that you have to include 50% of your capital gains as income on your tax return.

    Capital gains tax on sale of property

    In Canada, 50% of the value of any capital gains, including property, is taxable. This means that, if you sell an investment property at a higher price than you paid (realized capital gains), you’ll have to add 50% of the capital gains to your income.

    Capital gains tax exemptions

    • Lifetime capital gains exemption (LCGE). Also commonly known as the capital gains deduction, Canadian residents have a cumulative LCGE when they dispose of eligible properties. The capital properties eligible for the LCGE 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. Last updated in 2019, the lifetime capital gains exemption for qualified small business corporation shares is $866,912 and the lifetime capital gains exemption for qualified farm or fishing property is $1,000,000
    • Principal residence exemption. When you sell a property, you may be exempt from paying capital gains tax if the property was your principal residence. You’re only allowed to have one principal residence at a time and, if you have a spouse, there can only be one principal residence between you. You’ll still have to report the sale of the property on your taxes. If there was a period during your time of ownership where the property was not your principal residence, then you won’t be eligible to receive the full amount of tax exemption. In this case, the exemption will be calculated based on the number of years that you held the property as your principal residence
    • Exemptions on capital gains tax for donations. If you donate certain assets to a registered charity or other qualified organization, you may be exempt from paying capital gains tax on any capital gains realized from these gifts. The types of assets that are eligible for the exemption when donated include: Shares of stock in a mutual fund corporation or a unit of mutual fund trust; Shares, debt obligation or right listed on the stock exchange; Interest in a segregated fund trust; and Ecologically sensitive land. Qualified donees in Canada include: Registered charities; Registered amateur athletic associations; Registered municipalities; and Registered national arts service organizations. You’ll still have to report any capital gains and losses of these gifts on the capital gains tax form and you’re required to fill out a separate form – Capital Gains on Gifts of Certain Capital Property – to receive the exemption
    • Capital gains on gifted property. You may transfer capital property to your spouse if they’re in a lower income tax bracket to save on capital gains tax as a family. Depending on the type of property, ownership will be transferred to your spouse at either the adjusted cost base (ACB) or the undepreciated capital cost (UCC). After the transfer, you won’t incur capital gains tax but, when your spouse sells the capital property, they’ll pay capital gains tax. If the capital property you transferred to your spouse is eligible for the lifetime capital gains exemption (LCGE), your spouse can use their remaining LCGE limit when selling the capital property to reduce their capital gains tax. Eligible properties for the LCGE include qualified small business corporation shares and qualified farm or fishing properties

    Capital gains tax rates by province

    Capital gains tax rates are dependent on the province in which you live since provincial tax brackets vary. Specifics are laid out in the provincial charts below.

    Capital gains tax rates 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 rates 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 rates 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 rates 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 rates in Saskatchewan

    Lower Limit

    Upper Limit

    Capital Gains Tax Rate

    $0

    $13,229

    0.00%

    $13,230

    $16,065

    7.50%

    $16,066

    $45,225

    12.75%

    $45,226

    $48,535

    13.75%

    $48,536

    $97,069

    16.50%

    $97,070

    $129,214

    19.25%

    $129,215

    $150,473

    20.25%

    $150,474

    $214,368

    21.86%

    $214,369

    Infinity

    23.75%

     

    Capital gains tax rates in New Brunswick

    Lower Limit

    Upper Limit

    Capital Gains Tax Rate

    $0

    $13,229

    0.00%

    $13,230

    $17,463

    7.50%

    $17,464

    $40,063

    13.84%

    $40,064

    $43,401

    12.34%

    $43,402

    $48,535

    14.91%

    $48,536

    $86,803

    17.66%

    $86,804

    $97,069

    18.51%

    $97,070

    $141,122

    21.26%

    $141,123

    $150,473

    21.92%

    $150,474

    $160,776

    23.53%

    $160,777

    $214,368

    24.76%

    $214,369

    Infinity

    26.65%

     

    Capital gains tax rates in Newfoundland & Labrador

    Lower Limit

    Upper Limit

    Capital Gains Tax Rate

    $0

    $13,229

    0.00%

    $13,230

    $19,372

    7.50%

    $19,373

    $20,537

    11.85%

    $20,538

    $25,906

    19.85%

    $25,907

    $37,929

    11.85%

    $37,930

    $48,535

    14.75%

    $48,536

    $75,858

    17.50%

    $75,859

    $97,069

    18.15%

    $97,070

    $135,432

    20.90%

    $135,433

    $150,473

    21.65%

    $150,474

    $189,604

    23.26%

    $189,605

    $214,368

    23.76%

    $214,369

    Infinity

    25.65%

     

    Capital gains tax rates 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%

     

    Capital gains tax rates in Prince Edward Island

    Lower Limit

    Upper Limit

    Capital Gains Tax Rate

    $0

    $13,229

    0.00%

    $13,230

    $13,571

    7.50%

    $13,572

    $18,000

    12.40%

    $18,001

    $25,000

    14.90%

    $25,001

    $31,984

    12.40%

    $31,985

    $48,535

    14.40%

    $48,536

    $63,969

    17.15%

    $63,970

    $97,069

    18.60%

    $97,070

    $99,488

    21.35%

    $99,489

    $150,473

    22.19%

    $150,474

    $214,368

    23.79%

    $214,369

    Infinity

    25.69%

    Reporting capital losses to offset capital gains

    If your assets sold for less than the total cost you spent on them, you can offset your capital gains with the capital losses to reduce the amount of capital gains tax you have to pay. If you have more capital losses than capital gains in any given tax year, you can carry the net capital loss to the capital gains of the last three years or forward to offset any capital gains in future years. Capital losses can’t be claimed for personal-use properties – ie, your principal residence – as this is considered a personal expense.

    💡 Tip

    In the year you buy a depreciable property, such as a building, you can’t deduct its full cost. But, since this type of property wears out or becomes obsolete over time, you can deduct its capital cost over a period of several years. This deduction is called a capital cost allowance

    Reporting rules for registered investments

    If you have investments in a registered account, you’re not required to pay capital gains tax on them even if they grow in value as they fall under ‘tax-deferred’ or ‘tax-sheltered’ status. Registered accounts in Canada include:

    • Registered retirement savings plan (RRSP) – Retirement savings and investments that grow tax-deferred until retirement
    • Registered education savings plan (RESP) – Secondary education savings that grow tax-free until withdrawn with a lifetime contribution limit of $50,000. The government also contributes a maximum of $7,200 worth of Canada Education Savings Grant (CESG) funds by providing an additional 20% of your RESP to the plan each year
    • Registered disability savings plan (RDSP) – Canadians with disabilities are eligible for additional grants and bonds from the government that grow tax-deferred until withdrawn
    • Pooled registered pension plan (PRPP) – Large, pooled pension plan for retirement savings with lower administration costs
    • Tax-free savings account (TFSA) – Grants tax-free status to any contributions, income earned or withdrawals associated with the account. There’s an annual limit on contributions. The current annual TFSA limit is $6,000
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