Capital Gains Inclusion Rate 2026: What Actually Applies?

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:
| Capital gain | $400,000 |
| Inclusion rate (50%) | × 0.50 |
| Taxable amount added to income | $200,000 |
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.
Editorial disclaimer
This is news reporting by LoonieLabs Editorial for general information only. It is not financial, tax, legal, or investment advice. Markets coverage is reported analysis, not personalized advice — we hold no positions in individual securities discussed and accept no paid placement. Verify quotes, rates, benefit amounts, and dollar figures on the official source before acting. See our methodology for sourcing and corrections policy. Last reviewed: April 29, 2026.
Written and reviewed by Shrey Patel — Founder & Editor-in-Chief
Winnipeg, MB · Fact-checked by our Tax & Benefits reviewer · Last reviewed April 29, 2026 · LinkedIn
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