Tax in Canada
See what Canada's tax rules do to your property portfolio.
What Freeholt models for property, income and retirement in Canada, and what it does not.
Free to start. No card. Rules reviewed 2 July 2026.
Modelled here
- Tax on rental income
- Capital gains on a sale
- Duty on purchase (approximate)
- Income tax beyond the rent
- Dividends, interest and share sales
- Retirement savings
CAD · Rates as at 2 July 2026 · Rates editable in Settings · Estimates, not advice
Residents pay tax on net rent at federal + provincial rates (pick the province for the full stack); rental losses can offset other income. Non residents face 25% withholding on gross rent but can file NR6/s.216 for net. Capital gains keep the 50% inclusion rate (the 2024 hike was cancelled).
How rental income is taxed in Canada
For a resident owner: Progressive rates from 14% to 33%, stacked on other income in this country. The top rate of 33% applies above CA$258,482. For an owner living abroad and renting this out: Tax is withheld at source at 25% of the gross rent, before any costs.
Interest and losses
Mortgage interest is deductible against the rent. A rental loss is ring fenced: it carries forward against future rental income rather than reducing other income now.
Capital gains on a sale
Gains are added to income and taxed at the marginal income rate. Hold for at least 1 year and 50% of the gain is discounted. 25% of the SALE PRICE is withheld at settlement from a non resident seller. It is a credit against the bill, not an extra tax, but it is cash the seller does not get on the day.
Annual property tax while holding
An annual property or land tax is not modelled here, which is not the same as there being none. Treat holding costs on this page as excluding it.
What it costs to buy
Purchase duty here is more than a single rate, and Freeholt prices the published rules rather than an average. For a foreign buyer Freeholt adds 20% on top, as a single figure standing in for a rule that is not a single rate. Provincial land transfer tax plus foreign buyer surcharges (ON 25% NRST, rising to 35% in Toronto; BC 20%; NS 10% for ALL non Nova Scotians) and a federal ban on non citizen/non PR purchases to Jan 2027. BC/Toronto add vacancy taxes if left empty.
Can a foreign buyer purchase here?
Foreign buyers are generally BANNED from buying existing residential property here. Federal ban on purchases by non citizens/non PRs runs to 1 Jan 2027 (keyed to citizenship/PR, NOT residence. A Canadian PR abroad CAN buy). Work permit holders with 183+ days validity may buy one home. Provincial foreign buyer taxes (ON 25%, BC 20%, NS 10%) apply to exempt categories. Under review toward a new build carve out.
Income tax in Canada, beyond the rent
Progressive, up to 33%. The bands run Up to 16,452 at 0%; 16,452 to 58,523 at 14%; 58,523 to 117,045 at 20.5%; 117,045 to 181,440 at 26%; 181,440 to 258,482 at 29%; Above 258,482 at 33%. Canada charges a second ladder on the same income, 1 per province, charged alongside the national tax rather than replacing it. Each one is set out here beside the national ladder rather than added into a single figure; the rate quoted per province below is the two top rates added, and is a marginal rate rather than a bill. Ontario: Up to 53,891 at 5.05%; 53,891 to 107,785 at 9.15%; 107,785 to 150,000 at 11.16%; 150,000 to 220,000 at 12.16%; Above 220,000 at 20.53%, taking a top earner there to 53.53% all in. British Columbia: Up to 50,363 at 5.6%; 50,363 to 100,728 at 7.7%; 100,728 to 115,648 at 10.5%; 115,648 to 140,430 at 12.29%; 140,430 to 190,405 at 14.7%; 190,405 to 265,546 at 16.8%; Above 265,546 at 20.5%, taking a top earner there to 53.5% all in. Alberta: Up to 61,200 at 8%; 61,200 to 154,259 at 10%; 154,259 to 185,111 at 12%; 185,111 to 246,813 at 13%; 246,813 to 308,518 at 14%; Above 308,518 at 15%, taking a top earner there to 48% all in. Quebec: Up to 54,345 at 14%; 54,345 to 108,680 at 19%; 108,680 to 132,250 at 24%; Above 132,250 at 25.75%, taking a top earner there to 58.75% all in. We don't yet hold bands for Manitoba, Saskatchewan, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland & Labrador, Yukon, Northwest Territories and Nunavut, so for those the figures above are the national ones alone and the real bill is higher. We won't borrow a neighbouring province's rates to fill the gap. Rental profit joins this ladder. Figures in CAD, as verified 29 August 2026.
Dividends, interest and share sales
How Canada taxes investment income. For dividends: Taxed at the marginal income rate. Part of the company tax already paid is credited back. For interest: Taxed at the marginal income rate. For share sale gains: Taxed at the marginal income rate. Only 50% of the gain is taxable. Tax free accounts worth knowing about: TFSA. Up to 7,000 a year can be paid into TFSA. That is a limit on what goes IN, not an allowance against the tax.
Pensions and retirement savings
EET. Deductible in, taxed out. Contributions come off taxable income. Capped at 33,810 a year. Growth inside the fund is untaxed. Withdrawals can start at any age. The rest is taxed as income.
Worth knowing about tax in Canada
Canada's 38% dividend gross up is expressed here through a derived company rate. That figure is a modelling device, not a claim about what a Canadian company pays. The withholding on an RRSP withdrawal is not shown. It is a prepayment credited on the tax return rather than an extra cost, so the tax is unchanged and only the timing of the cash differs.
How Freeholt models Canada
Every rate above is priced from Freeholt's own table for Canada and runs through the whole projection: rental income, a modelled sale and the annual holding costs all use the same figures. They are also defaults that can be edited in Settings, so a position that differs, or a rate that changes before we catch it, can be corrected and the projection reprices around it.
What running this property costs
In Canada this covers municipal property tax, condo/strata fees, insurance, and maintenance.
How borrowing works here
A long (25 to 30 year) amortisation with a shorter 3 to 5 year fixed term that must be renewed.
What actually happened here
This country's own record, one year at a time. Nothing on this page is borrowed from another country. Move across a chart to read a year.
This is the published benchmark that mortgages here are priced from, not a rate a household is quoted. The level sits away from what a borrower pays; the swings are the real cycle.
Recent rule changes in Canada
- 2025-03-21 The proposed capital gains inclusion rate hike to 66.7% was CANCELLED. The 50% inclusion rate stands.
- 2025-01-01 The federal Underused Housing Tax was eliminated from 2025 (Bill C 15); provincial/municipal vacancy taxes still apply.
- The federal foreign buyer ban runs to 1 Jan 2027 and is under review toward an Australia style new build carve out. Nothing enacted for 2027+.(proposed only, never priced into your figures)
What Freeholt models here
- ModelledTax on rental income
- Resident and non resident rates, with interest and losses treated under the local rule.
- ModelledCapital gains on a sale
- Priced in the year of the sale under the rules of that year.
- ApproximateDuty on purchase
- The published scale is priced. The foreign buyer surcharge is carried as one figure, where the real charge follows a rule that is not a single rate.
- Not yetAnnual property or land tax
- Not priced here; the page says where the charge falls instead.
- ModelledIncome tax beyond the rent
- Salary and other income, stacked with the rent.
- ModelledDividends, interest and share sales
- Investment income and gains, with the local allowances.
- ModelledRetirement savings
- Contributions, the fund and the way out.
- Not yetInheritance and what happens on death
- Not modelled for this country yet.
What Freeholt does not model here
- Any annual property or land tax, which may still exist here
- Inheritance and estate tax
- Local property taxes and transfer taxes below the national level, which vary by state, province and county
- Treaty relief between this country and the owner's country of residence
What the figures above leave out (18)
- Each province's own dividend tax credit is not applied, which on its own overstates the dividend charge. On the investment figures the provincial tax is missing as well, and it is the larger of the two, so the provincial layer there still nets to an understatement.
- A Quebec resident's federal tax is abated by 16.5%, and that abatement is not applied, so a Quebec figure is overstated.
- Canada's basic personal amount is modelled as a 0% band rather than as the credit it really is. The two agree at the lowest rate and differ slightly otherwise.
- Canada's basic personal amount shrinks from $16,452 to $14,829 between $181,440 and $258,482 of income, and that phase out is not applied: the full amount is granted at every income. Above $181,440 the tax is understated, by at most $227.22 a year.
- Canada's general income tax for a non resident is not modelled at all: no non resident ladder was sourced, so rather than lend a non resident the resident ladder and its basic personal amount, no figure is produced. Nothing is shown, so nothing is wrong; there is simply no answer here for a non resident.
- Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) contributions are not taken off a salary here. They are social insurance rather than income tax, so the income tax shown is right but the total deducted from pay is understated: for 2026, up to $4,230.45 of CPP plus $416 of the second CPP tier for an employee, and up to $4,479.30 under the QPP.
- No province was given, so this is federal tax only. Provincial tax is a second ladder on the same income and is a third to a half of the total for most Canadians.
- The investment and pension figures here are federal only: provincial tax is a second ladder on the same income and is not applied to either of them, and for most Canadians it is a third to a half of the total. The income tax ladder does charge it, once the province of residence has been given.
- These investment figures are a Canadian resident's. A non resident instead pays a flat 25% withholding on dividends, often cut by treaty to 15% or lower, and is generally exempt on interest from an unrelated payer. So for a non resident the interest figure is overstated by the whole of it, while the dividend figure is wrong in a direction that depends on their income and treaty and cannot be stated here.
- Canada's lifetime capital gains exemption, now $1,250,000, shelters gains on qualified small business shares and farm or fishing property and is not modelled. It does not reach the listed securities priced here, so a portfolio holder's figure is unaffected; someone selling a qualifying business or farm is overstated by the tax on whatever the exemption would have sheltered.
- Every Canadian dividend is priced as an eligible one. A non eligible dividend is understated. About $27.53 per $1,000 at the top rate, and proportionally more further down.
- Canada's dividend tax credit is treated as non refundable, which was not stated either way. If it is refundable, a shareholder whose credit exceeds their bill is overstated.
- The $33,810 RRSP contribution cap shown is the 2026 dollar limit only. The real room is the lesser of that and 18% of last year's earned income, plus any unused room carried forward, less a pension adjustment from an employer plan. So for anyone who earned under $187,833 last year the cap shown is too high, and for anyone with accumulated unused room it is too low.
- No minimum age for an RRSP withdrawal was stated, so none is enforced. If one does exist, this prices a withdrawal Canadian law would refuse.
- An RRSP must be wound up by the end of the year the holder turns 71: withdrawn, converted to a Registered Retirement Income Fund (RRIF) or used to buy an annuity. A RRIF then pays out a prescribed minimum every year, from 5.28% of the fund at 71 rising to 20% at 95. Neither is modelled, so a projection past 71 leaves money compounding untaxed that the law would have forced out: the pot is overstated and the tax in later retirement understated.
- Canada's TFSA is the mirror of the account modelled here (nothing off going in, nothing to pay coming out) and is not priced separately.
- Canada's First Home Savings Account is a third wrapper with rules of its own and is not modelled here.
- Canada's public pensions, the Canada or Quebec Pension Plan and Old Age Security (OAS), are state entitlements rather than a pot the member owns and are not modelled. This answers what an RRSP withdrawal is charged, not how much retirement income there will be; and the OAS recovery tax, which claws back 15% of income above a threshold ($93,454 for 2025 income), is not applied, so a high income retiree's total charge is understated.
Coverage deepens country by country. Every figure is an estimate, not advice.
Compare with another country
Each page is built from the same table the app runs on, so the figures line up side by side.
Compare Canada with another country — rent, gains, annual tax and duty, side by side.
Questions people ask
- Does Freeholt model Canada property tax?
- Yes. Rental income tax, capital gains on a sale and duty on purchase are priced from Freeholt's own rate table for Canada. Duty on purchase carries a simplification that the page names beside the figure. Annual property or land tax is not priced here, and the page says so rather than showing a zero. Any rate or threshold can be corrected in Settings so the whole projection reprices. Every figure is an estimate, not advice.
- How is rental income from Canada taxed if I live somewhere else?
- Tax is withheld at source at 25% of the gross rent, before any costs. Tax may also be due in the country of residence, with credit for what was paid here. Estimates only, not advice.
- What are the Canada figures as at?
- The rate table for Canada was last reviewed on 2 July 2026. Freeholt date stamps every country rather than implying all of them were checked on the same day. Estimates only, not advice.
Model a property in Canada alongside everything else you own: see the year your portfolio starts paying you back.