Housing · selling
Capital Gains on House Sale Calculator
The tax on selling a home or rental property, with the principal residence exemption.
The sale
Do you pay capital gains tax when you sell your house?
Not on your principal residence. If the home was your main home every year you owned it, the gain is fully exempt; you just report the sale on Schedule 3 and designate it (form T2091). Only one home per family can be designated for each year.
If it was your home for only part of the time (say you rented it out, or it was a cottage), the exempt share is (1 + years designated) ÷ years owned. Half of the remaining gain is taxable at your marginal rate. Selling costs and improvements (not repairs) lower the gain.
Since 2023, a home sold within 12 months of buying it is taxed as business income, 100% taxable with no exemption, unless you sold because of a life event such as a death, divorce, new job or disability. For stocks and other assets use the capital gains calculator; buying next? See land transfer tax.
Sources: CRA: principal residence
Frequently asked questions
Do I pay capital gains on selling my house in Canada?
No, if it was your principal residence for every year you owned it. You still report the sale on your tax return.
How much capital gains tax will I pay on a rental property?
Half of the gain (sale price minus purchase price, improvements and selling costs) is added to your income and taxed at your marginal rate. Past depreciation (CCA) claimed is taxed in full.
What is the 1-plus rule for the principal residence exemption?
The exempt share is (1 + years designated) ÷ years owned, so the extra year covers the year you own two homes when you move.
Is the capital gains inclusion rate 50% or 66.7%?
50%. The planned increase to two-thirds was cancelled in March 2025.
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