Capital Gains Tax in Canada 2026
In Canada, only 50% of capital gains are included in your taxable income (the "inclusion rate"). This means if you earn $100 in capital gains, only $5,000 is added to your income and taxed at your marginal rate.
Important 2026 update: The federal government has proposed increasing the capital gains inclusion rate to 66.7% for gains above $250,000 annually. Check the latest CRA guidance for current rules.
How to Minimize Capital Gains Tax
- Use your TFSA — all gains inside a TFSA are completely tax-free
- Hold investments for the long term to defer gains
- Use capital losses to offset gains (tax-loss harvesting)
- Consider timing of sales around tax year boundaries
- Contribute to your RRSP to reduce taxable income in high-income years
Save More with the Right Accounts
Tax strategy works best when paired with high-interest accounts. KOHO offers a $20 signup bonus + $100 per referral, and when held in a TFSA-eligible structure, your growth is completely tax-free. Sign up with code 45ET55JSYA for a bonus.