How much tax when I sell my rental property?
Use the capital cost and undepreciated capital cost (UCC) from Area A of your last T776, and split the sale price between building and land as your assessment or an appraiser does.
Your estimate
What the calculator assumes.
The rules. The building’s UCC is reduced by the lesser of its sale price, minus selling costs, and its capital cost. If that leaves a negative balance, the difference is recapture of the CCA you claimed and is fully taxed; if a balance remains and the building was the last property in its class, it is a terminal loss you can deduct. A gain above the capital cost is a capital gain, half of which is taxed; a building cannot give a capital loss, but land can. When the building sells for less than its UCC and capital cost, section 13(21.1) of the Income Tax Act moves part of the land’s price to the building, so a land gain cannot fund a terminal loss. Sources: CRA guide T4036, Rental Income and Income Tax Act, s. 13.
Not included. Other buildings in the same CCA class, the years it was your home (see the capital gains calculator for the principal residence exemption), reserves for sales paid over time, the alternative minimum tax, and GST/HST on a new or substantially renovated rental. Non-resident sellers also face withholding; see the non-resident guide. Track the CCA each year with the rental income tax calculator.