Definition
Capital gains tax on real estate is calculated at sale and paid when filing the tax return for the year of sale.
Simplified calculation (individual, $100,000 gain, non-principal residence): 1. Gross gain: $100,000 2. Taxable portion (50%): $50,000 included in income 3. Combined marginal tax rate (federal + provincial QC, $100,000-150,000 bracket): ~53% 4. Capital gains tax: $50,000 × 53% ≈ $26,500
2024 change: for gains exceeding $250,000 in the year, the inclusion rate increases to 2/3 instead of 1/2.
**Non-resident withholding**: if the seller is a Canadian non-resident, the buyer must withhold 25% of the purchase price and remit it to CRA at closing, unless the seller has obtained a compliance certificate (Form T2062).
**Planning**: donating property to a child at reduced price triggers a deemed capital gain based on fair market value — even if no money changes hands.