🇨🇦 Canada Rental Property Capital Gains Calculator 2025

Calculate capital gains, CCA recapture, and terminal loss on the sale of a rental property under CRA rules for 2025.

💡 Quick Example — See how the rental property calculation works ▶

Scenario: Bought a rental duplex in 2015 for $500,000 (Land: $150,000, Building: $350,000). Sold in 2025 for $900,000 (Land: $300,000, Building: $600,000). UCC of building at start of 2025: $250,000. Selling costs: $20,000. Ownership: 100%.

Step 1 — Total Capital Gain (A):
$900,000 − ($500,000 + $20,000) = $380,000

Step 2 — Building Proceeds:
$900,000 × ($600,000 / $900,000) = $600,000

Step 3 — CCA Recapture:
min($600,000, $350,000) − $250,000 = $100,000 recapture (100% taxable)

Step 4 — Taxable Capital Gain:
$380,000 × 50% = $190,000

Result: Report $190,000 on Line 12700 (Schedule 3) and $100,000 recapture on Form T776.

🏢 Property Information

Year of Acquisition

Year of Sale

Total Proceeds of Disposition ($)

Total Adjusted Cost Base (ACB) ($)

Total Outlays & Expenses ($)

Your Ownership Percentage (%)

🏞️ Land & Building Allocation

Land Value at Acquisition ($)

Building Value at Acquisition ($)

Land Value at Sale ($)

Building Value at Sale ($)

📉 CCA & UCC Information

UCC of Building at Start of Sale Year ($)

Enter 0 if you never claimed CCA.

Total CCA Claimed Over the Years ($)

⚠️ Additional Checks

Owned for less than 365 consecutive days Property was ever your principal residence

Number of years the property was your principal residence

Used to estimate potential Principal Residence Exemption overlap.

⚠️ Flipping Rule Applies: Since you owned the property for less than 365 consecutive days, the entire gain is treated as business income (100% taxable). The capital gains treatment and PRE do not apply. Report on Form T2125.

CAPITAL GAIN — 50% Taxable

Total Capital Gain (A) $380,000

Land Portion at Sale 33.3%

Building Portion at Sale 66.7%

Building Proceeds $600,000

Building Capital Cost $350,000

UCC at Start of Year $250,000

CCA Recapture (100% taxable) $100,000

Terminal Loss (fully deductible) $0

Taxable Capital Gain (50%) $190,000

      Your Share of Taxable Gain (100%)
      $190,000
    

      Your Share of Recapture
      $100,000
    

📋 Reporting Instructions:

Report $190,000 as taxable capital gain on Line 12700 (Schedule 3).
Report $100,000 recapture on Form T776, line 9947 (Statement of Real Estate Rentals).
Complete Schedule 3 for the capital gain.

📊 Gain Breakdown

Taxable Gain: $190,000 Recapture: $100,000 Non-taxable portion: $190,000

🧮 Formula Walkthrough — See your numbers plugged in ▶

Step 1 — Total Capital Gain (A):

Proceeds − (ACB + Outlays)

Step 2 — Land / Building Split at Sale:

Building % = Building Value at Sale / Total Value at Sale

Step 3 — Building Proceeds:

Building Proceeds = Total Proceeds × Building %

Step 4 — CCA Recapture or Terminal Loss:

min(Building Proceeds, Capital Cost) − UCC

Step 5 — Taxable Capital Gain (50%):

Capital Gain × 50%

Step 6 — Your Share (Ownership %):

Taxable Gain × Ownership %

⚠️ Disclaimer: This calculator provides an estimate for informational purposes only. Actual tax treatment is determined by the Canada Revenue Agency (CRA) based on your tax return and individual circumstances. Rental property sales involve complex rules (CCA classes, change-in-use elections, principal residence overlap). Verify with the CRA or a qualified tax professional before filing.

❓ Frequently Asked Questions

How is capital gain on rental property calculated?

Capital Gain = Proceeds of Disposition − (Adjusted Cost Base + Outlays and Expenses). 50% of the resulting gain is taxable and reported on Line 12700 (Schedule 3).

What is CCA recapture?

Recapture occurs when the sale proceeds allocated to the building exceed its Undepreciated Capital Cost (UCC). The excess is added to income and is 100% taxable. It goes on Form T776, line 9947 — NOT on Schedule 3.

What is a terminal loss?

When all assets in a CCA class are disposed of and a positive UCC remains, the remaining UCC is a terminal loss. It is fully deductible against income and can create or increase a rental loss.

What is the difference between land and building for tax purposes?

Land is not depreciable — you cannot claim CCA on land, and there is no recapture or terminal loss on land. Building is depreciable (typically Class 1 at 4%) and is subject to recapture or terminal loss on sale.

What happens if I never claimed CCA?

If you never claimed CCA, your UCC equals the capital cost of the building. On sale, if proceeds exceed the capital cost, there is no recapture (recapture is the excess above UCC, but since UCC = cost, recapture only triggers when proceeds exceed cost).

What is the residential property flipping rule?

If you owned the property for less than 365 consecutive days before selling, the gain is treated as business income (100% taxable) and the capital gains treatment does not apply — unless a qualifying life event exception applies (death, divorce, disability, relocation, insolvency, etc.).

What forms do I need to complete?

Complete Schedule 3 (Capital Gains or Losses) for the capital gain, and Form T776 (Statement of Real Estate Rentals) for the CCA recapture or terminal loss. If the property was also your principal residence for some years, complete Form T2091(IND).

Can I claim a capital loss on rental property?

No — you cannot have a capital loss on depreciable property. Instead, if all assets in the class are disposed of and UCC remains, it becomes a terminal loss, which is fully deductible against income.

Official CRA information: T4036 Rental Income · Line 12700 Capital Gains

⚠️This tool is for information purpose only. We do not guarantee any claim.
It is made based on data publicaly available on official website of concerned department.

Last Updated: March 2026 | Official Determination Required

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