Alberta 2025 Capital Gains Tax Calculator
This calculator helps you calculate capital gains tax in Alberta on the sale of property and stocks. This calculator uses the current inclusion rate and compares it to the new inclusion rate set to come into effect on January 1, 2026.
What is capital gains tax?
Capital gains tax is a fee paid on the increase in value of investments or assets from their original purchase price. When sold for more than the purchase price, this results in a capital gain, which is taxable. Capital gains can be “realized” when sold, or “unrealized” when value increases but the asset isn’t sold yet. While unrealized gains aren’t taxed until sold, it’s essential to consult a tax professional for personalized advice due to varying financial situations.
What is a capital gains loss?
A capital loss occurs when you sell an investment or asset for less than its original purchase price. This loss is the difference between the purchase price and the lower sale price. Similar to capital gains, capital losses can be “realized” when the sale occurs, or “unrealized” when the asset’s value decreases but hasn’t been sold. While unrealized losses can indicate a drop in value, they aren’t counted for tax purposes until the asset is sold. Realized capital losses can offset capital gains and reduce taxable income. As with all financial matters, consulting a tax professional is advisable to understand the implications for your specific situation.
How to avoid or reduce capital gains in Alberta
There are strategies that can be used to reduce or fully avoid paying capital gains in Canada. Since capital gains and losses can be netted against each other, capital losses incurred can be used to reduce your overall capital gain and the overall tax that you will have to pay.
Capital losses can be realized by selling off low performing stocks which can then be applied to capital gains. However, it is important that you follow the rules outlied by the CRA as purchasing these stocks quickly back can be deemed as a superficial loss. If the CRA deems a superficial loss you will be unable to use the losses to offset the capital gains.
If you are to sell your primary residence you may be able to avoid paying capital gains through the primary residence exemption so long as you meet the criteria.
Alberta capital gain tax rates
These are the tax rates in Alberta combined with federal tax rates for the 2024 tax year.
| 2024 Taxable Income | Other Income Marginal Tax Rate |
|---|---|
| first 55867 | 25.% |
| over $55,867 up to $111,733 | 30.5% |
| over $111,733 up to $148,269 | 36.% |
| over $148,269 up to $173,205 | 38.% |
| over $173,205 up to $177,922 | 41.32% |
| over $177,922 up to $237,230 | 42.32% |
| over $237,230 up to $246,752 | 43.32% |
| over $246,752 up to $355,845 | 47.% |
| over $355,845 | 48.% |
These are the 2025 tax year combined federal and provincial tax rates for Alberta.
| 2025 Taxable Income | Other Income Marginal Tax Rate |
|---|---|
| first $57,375 | 25.% |
| over $57,375 up to $114,750 | 30.5% |
| over $114,750 up to $151,234 | 36.% |
| over $151,234 up to $117,882 | 38.% |
| over $117,882 up to $181,481 | 41.32% |
| over $181,481 up to $241,974 | 42.32% |
| over $241,974 up to $253,414 | 43.32% |
| over $253,414 up to $362,961 | 47.% |
| over $362,961 | 48.% |
New capital gains tax in Canada
New changes were made to capital gains tax in Canada which target high income individuals who realize substantial capital gains each year. This change can also have a impact on individuals who are disposing of other personal property that would not be expempt under the principal tax exemption such as cottages, rental properties, farms and shares of private corporations.
There were changes to the tax in Canada that came into effect on June 25th, 2024 these are the changes and how they will impact tax on capital gains.
- The amount of capital gains that will be increased from 50% (1/2) to 67% (2/3) on capital gains in excess of $250,000 in a year.
- For capital gains that are under $250,000 in a year the inclusion rate for individuals will remain at 50%.
- The inclusion rate for capital gains for corporations and trusts will increase to 67% on all capital gains.
Capital gains tax inclusion rates under new rules
These are the new inclusion rates under the rules effective June 25th, 2024:
| Amount of Capital Gain | Inclusion Rate |
|---|---|
| Below $250,000 | 50% (1/2) |
| Above $250,000 | 67% (2/3) |
What is a capital gain in Canada?
A capital gain occurs in Canada when you sell capital property for more than the adjusted cost base if you were to sell the capital property for less than the adjusted cost base (ABC) you would have a capital loss.
Adjusted Cost Base (ABC): The initial cost of the capital property plus any other costs asociated with purchasing or making improvements the capital property, such as commissions, accounting and legal fees or improvements.
How to calculate tax on capital gains?
The formula to calculate tax on captail gains includes calculating the capital gain and multiplying the capital gain by the inclusion rate and tax rate.
Proceeds of disposition less Adjusted cost base (ACB) plus Expenses equals Captial gain / loss
