Chapter 04 · Sale
Canadian Capital Gains: 50% Inclusion Rate
How US real estate capital gains are taxed in Canada for Canadian residents.
Direct answer · 60-second summary
The 60-second version
- Canada inclusion rate: 50% (2026)
- US real property gains = capital income Canada
- Reporting: Schedule 3 (CRA)
- Florida purchase = foreign property
- Gain = sale price − adjusted cost basis
- PRE eligibility for Canadian principal residence
- Foreign tax credit: US FIRPTA withholding
- Planning: timing sale before Canada departure
Acronyms used in this guide
- CRA — Canada Revenue Agency
- Schedule 3 — Schedule 3 (capital gains Canada)
- FIRPTA — Foreign Investment in Real Property Tax Act
- PRE — Principal Residence Exemption
- FTC — Foreign Tax Credit
50% Inclusion: Canada 2026 rule
Canadian residents taxable in Canada on 50% of capital gains realized (after cancellation of proposed 66.67% increase in March 2025). For US real estate: gain fully recognized, then 50% included in taxable income.
Foreign property, taxed in Canada
Florida real property = foreign property for Canadian residents. All capital gains from it taxable by CRA via Schedule 3.
Schedule 3 CRA
Report real estate capital gains on Schedule 3 (Capital Gains and Losses). Include: acquisition date, sale date, purchase price, sale price, closing costs, net gain.
Foreign Tax Credit (FTC)
US FIRPTA withholding 15% is eligible foreign tax credit in Canada. Reduce Canada tax owing by US withholding, avoiding double taxation.
Every figure, rate, threshold, and deadline in this guide is drawn from a verifiable primary source listed at the bottom of the page. The article is updated whenever the underlying rules change, with a fresh review date stamped at the top.
Sources and references
Disclaimer
This guide is for educational purpose only.
For concrete decisions, consult a licensed attorney.