How capital gains are taxed in Canada
Only 50% of a capital gain is taxable. That half is added to your income and taxed at your marginal rate, so the effective rate is half your marginal rate — up to about 26.8% in Ontario.
The increase to a two-thirds inclusion rate announced in 2024 was cancelled in March 2025. Capital losses can offset gains and be carried back three years or forward indefinitely.
TFSA
Gains inside a TFSA are tax-free. The 2026 TFSA limit is $7,000.
FAQ
What is the capital gains inclusion rate in 2026?
50%. The proposed increase to 66.67% was cancelled.
How much tax on a $20,000 capital gain in Ontario?
With $80,000 of other income, about $3,000: $10,000 is taxable at a combined marginal rate of roughly 29.65%.
Is the TFSA limit $7,000 in 2026?
Yes.