Bottom line: when you sell an investment property, stock, or business interest in 2026, half of the gain is added to your taxable income. There is no $250,000 threshold to worry about, no two-tier rate, and no 66.67% inclusion. The rule is the same as 2025.

Timeline: How We Got Here

• April 2024: Federal Budget 2024 proposed raising the inclusion rate to 66.67% for gains above $250,000 (individuals) and on every dollar (corporations/trusts), effective June 25, 2024.
• Late 2024 – early 2025: The implementing legislation stalled. The CRA announced it would administer the proposed rules anyway pending parliamentary approval — creating widespread confusion.
• 2025: The Department of Finance deferred the proposed effective date to January 1, 2026 to give Parliament more time.
• 2026: The proposal was formally cancelled. The 50% inclusion rate remains the law for all taxpayers.

What Actually Applies in 2026

Capital gains are taxed using the same long-standing rule:

• Inclusion rate: 50% — half of any capital gain is added to your taxable income; the other half is tax-free.
• No annual threshold: the rate is flat across the entire gain.
• Same rate for everyone: individuals, corporations, and most trusts.
• Principal residence exemption: still fully exempts your primary home from capital gains tax.
• Lifetime Capital Gains Exemption (LCGE): still applies to qualified small business corporation shares and qualified farm/fishing property — indexed to $1.25M for 2026.
• Registered accounts: capital gains in TFSAs, RRSPs, FHSAs, RRIFs, RESPs, and LIRAs remain fully tax-sheltered.

Worked Example: Selling a Rental Property

You sell a rental property in Vancouver for a $400,000 capital gain in 2026:

At a top BC marginal rate near 53.5%, the federal+provincial tax on this gain is roughly $107,000. Under the cancelled 2/3 proposal, this would have been about $13,400 higher.

Worked Example: Selling Stock

You sell tech stocks held in your non-registered account with a $180,000 gain. Half — $90,000 — is added to your taxable income. Same as 2025. Same as 2024. Same as 2000.

Common Misconceptions Still Floating Around

• "There's a $250,000 cap before the higher rate kicks in." No — that was part of the cancelled proposal. There is no two-tier system in 2026.
• "Corporations pay 2/3 on every dollar." Also part of the cancelled proposal. Corporate capital gains stay at 50% inclusion.
• "My principal residence might now be partially taxable." No — the principal residence exemption is unchanged.

What to Do If You Already Filed Assuming the Hike

Some Canadians filed 2024 returns under CRA's interim guidance assuming the 2/3 rate applied to gains realised after June 25, 2024. The CRA has issued guidance on reassessments and refunds for affected taxpayers. If your 2024 or 2025 return included a gain reported at the higher inclusion rate, contact the CRA or speak with a CPA — you may be owed a reassessment.

Plan With Confidence Again

Use our capital gains calculator to model the actual 2026 tax on a sale. For a fuller walk-through of capital gains rules, the principal residence exemption, and the LCGE, see our complete capital gains tax 2026 guide.

Sources: Department of Finance Canada (canada.ca/en/department-finance) and Canada Revenue Agency T4037 Capital Gains guide. General information only — not tax, legal, or financial advice. Verify with a CPA before acting on a large disposition. Last reviewed: April 29, 2026.