Capital Gains Tax Real Estate Ontario Calculator

Calculating your capital gains tax on real estate sales in Ontario requires understanding the tax rates, holding periods, and deductions available. This calculator helps you determine your tax liability based on your sale price, purchase price, and holding period.

How to Calculate Capital Gains Tax in Ontario

The Ontario government taxes capital gains on the sale of real estate. The tax applies to the profit you make from selling a property, calculated as the sale price minus the purchase price and any allowable deductions.

Capital Gains Formula

Capital Gains = Sale Price - Purchase Price - Deductions

Once you've calculated your capital gains, you'll need to determine the applicable tax rate based on your holding period:

Short-term capital gains (holding period of 1 year or less)
Long-term capital gains (holding period of more than 1 year)

Each type of capital gain is taxed at different rates, as outlined in the next section.

Ontario Capital Gains Tax Rates

Ontario has different tax rates for short-term and long-term capital gains:

Holding Period	Tax Rate
Short-term (≤1 year)	50.917% of the gain
Long-term (>1 year)	50% of the gain

Note

The rates shown are effective for 2023. Tax rates may change each year, so always check the latest rates before filing your taxes.

In addition to the capital gains tax, you may also be subject to provincial sales tax (PST) on the sale price of the property, depending on the municipality where the property is located.

Examples of Capital Gains Tax Calculations

Let's look at two examples to illustrate how capital gains tax works in Ontario.

Example 1: Short-term Capital Gain

You bought a property in Toronto for $400,000 in January 2023 and sold it for $500,000 in June 2023. You had no deductions.

Calculation

Capital Gains = $500,000 - $400,000 - $0 = $100,000

Tax = 50.917% × $100,000 = $50,917

In this case, you would owe $50,917 in capital gains tax on your short-term capital gain.

Example 2: Long-term Capital Gain

You bought a property in Ottawa for $300,000 in January 2020 and sold it for $450,000 in June 2023. You had $30,000 in allowable deductions.

Calculation

Capital Gains = $450,000 - $300,000 - $30,000 = $120,000

Tax = 50% × $120,000 = $60,000

In this case, you would owe $60,000 in capital gains tax on your long-term capital gain.

Frequently Asked Questions

What is the difference between short-term and long-term capital gains?

Short-term capital gains are realized when you sell an asset within one year of purchase, while long-term capital gains are realized when you sell an asset after holding it for more than one year. In Ontario, short-term capital gains are taxed at a higher rate than long-term capital gains.

What deductions can I claim for capital gains tax?

You may be able to claim deductions for expenses related to the sale of your property, such as legal fees, advertising costs, and property taxes. However, not all expenses are deductible, so it's important to consult with a tax professional to ensure you're claiming all eligible deductions.

Do I have to pay capital gains tax if I sell my primary residence?

In Ontario, you may be exempt from capital gains tax on the sale of your primary residence if you meet certain conditions, such as having lived in the home as your principal residence for at least two out of the last five years. However, you may still be subject to other taxes, such as provincial sales tax (PST).