INDIVIDUAL TAXATION
Canadian residents are subject to Canadian income tax on their worldwide income. Married couples are taxed separately and there is no option for joint taxation.
INCOME TAX
There are four categories of income: (1) business income, (2) employment income, (3) capital gains, and (4) property income (consists of passive income earned through investments such as rents, interest, royalties, and dividends).
Income is taxed at the federal level and at the provincial level. In all provinces, except Quebec, the Canadian Government collects taxes on behalf of the provincial or territorial government. The provincial rules for computing income are generally (but not always) consistent with the federal rules. The tax bands and rates are regularly adjusted annually.
FEDERAL INCOME TAX 2020 |
| TAXABLE INCOME, CA$ (US$) |
TAX RATE |
| Up to 48,535 (US$35,952) |
15% |
| 48,535 – 97,069 (US$71,903) |
20.50% on band over US$35,952 |
| 97,069 – 150,473 (US$111,461) |
26% on band over US$71,903 |
| 150,473– 214,368 (US$158,791) |
29% on band over US$111,461 |
| Over 214,368 (US$158,791) |
33% on all income over US$158,791 |
| Source: Global Property Guide |
FEDERAL INCOME TAX 2019 |
| TAXABLE INCOME, CA$ (US$) |
TAX RATE |
| Up to 47,630 (US$35,282) |
22.20% |
| 47,630 – 95,259 (US$70,562) |
30.34% on band over US$35,282 |
| 95,259 – 147,667 (US$109,383) |
38.48% on band over US$70,562 |
| 147,667 – 210,371 (US$155,830) |
42.92% on band over US$109,383 |
| Over 210,371 (US$155,830) |
48.84% on all income over US$155,830 |
| Source: Global Property Guide |
FEDERAL INCOME TAX 2018 |
| TAXABLE INCOME, CA$ (US$) |
TAX RATE |
| Up to 46,605 (US$34,522) |
22.20% |
| 46,605 – 93,208 (US$69,043) |
30.34% on band over US$34,522 |
| 93,208 – 144,489 (US$107,029) |
38.48% on band over US$69,043 |
| 144,489 – 205,842 (US$152,476) |
42.92% on band over US$107,029 |
| Over 205,842 (US$152,476) |
48.84% on all income over US$152,476 |
| Source: Global Property Guide |
FEDERAL INCOME TAX 2017 |
| TAXABLE INCOME, CA$ (US$) |
TAX RATE |
| Up to 45,916 (US$34,012) |
15% |
| 45,916 - 91,831 (US$68,023) |
20.50% on band over US$34,012 |
| 91,831 - 142,353 (US$105,447) |
26% on band over US$68,023 |
| 142,353 - 202,800 (US$150,222) |
29% on band over US$120,593 |
| Over202,800 (US$150,222) |
33% on all income over US$150,222 |
| Source: Global Property Guide |
FEDERAL INCOME TAX 2016 |
| TAXABLE INCOME, CA$ (US$) |
TAX RATE |
| Up to 45,282 (US$33,542) |
15% |
| 45,282 - 90,563 (US$67,084) |
20.50% on band over US$33,542 |
| 90,563 - 140,388 (US$103,991) |
26% on band over US$67,084 |
| 140,388 - 200,000 (US$148,148) |
29% on band over US$103,991 |
| Over 200,000 (US$148,148) |
33% on all income over US$148,148 |
| Source: Global Property Guide |
PROVINCIAL/ TERRITORIAL INCOME TAX
ALBERTA INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 131,220 (US$97,200) |
10% |
| 131,220 – 157,464 (US$116,640) |
12% on band over US$97,200 |
| 157,464 – 209,952 (US$155,520) |
13% on band over US$116,640 |
| 209,952 – 314,928 (US$233,280) |
14% on band over US$155,520 |
| Over 314,928 (US$233,280) |
15% on all income over US$233,280 |
| Source: Global Property Guide |
BRITISH COLUMBIA INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 41,725 (US$30,907) |
5.06% |
| 41,725 – 83,451 (US$61,816) |
7.70% on band over US$30,907 |
| 83,451 – 95,812 (US$70,972) |
10.50% on band over US$61,816 |
| 95,812 – 116,344 (US$86,181) |
12.29% on band over US$61,816 |
| 116,344 – 157,748 (US$116,850) |
14.70% on band over US$86,181 |
| Over 157,748 (US$116,850) |
16.80% on all income over US$116,850 |
| Source: Global Property Guide |
BRITISH COLUMBIA INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 40,707 (US$30,153) |
5.06% |
| 40,707 – 81,416 (US$60,308) |
7.70% on band over US$30,153 |
| 81,416 – 93,476 (US$69,241) |
10.50% on band over US$60,308 |
| 93,476 – 113,506 (US$84,079) |
12.29% on band over US$69,241 |
| 113,506 – 153,900 (US$114,000) |
14.70% on band over US$84,079 |
| Over 153,900 (US$114,000) |
16.80% on all income over US$114,000 |
| Source: Global Property Guide |
MANITOBA INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 33,389 (US$24,733) |
10.80% |
| 33,389– 72,164 (US$53,455) |
12.75% on band over US$24,733 |
| Over 72,164 (US$53,455) |
17.40% on all income over US$53,455 |
| Source: Global Property Guide |
MANITOBA INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 32,670 (US$24,200) |
10.80% |
| 32,670 – 70,610 (US$52,304) |
12.75% on band over US$24,200 |
| Over 70,610 (US$52,304) |
17.40% on all income over US$52,304 |
| Source: Global Property Guide |
NEW BRUNSWICK INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 43,401 (US$32,148) |
9.68% |
| 43,401 – 86,803 (US$64,299) |
14.82% on band over US$32,148 |
| 86,803 – 141,122 (US$104,535) |
16.52% on band over US$64,299 |
| 141,122 – 160,776 (US$119,093) |
17.84% on band over US$104,535 |
| Over 160,776 (US$119,093) |
20.30% on all income over US$119,093 |
| Source: Global Property Guide |
NEW BRUNSWICK INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 42,592 (US$31,550) |
9.68% |
| 42,592 – 85,184 (US$63,099) |
14.82% on band over US$31,550 |
| 85,184 – 138,491 (US$102,586) |
16.52% on band over US$63,099 |
| 138,491 – 157,778 (US$116,873) |
17.84% on band over US$102,586 |
| Over 157,778 (US$116,873) |
20.30% on all income over US$116,873 |
| Source: Global Property Guide |
NEWFOUNDLAND AND LABRADOR INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 37,929 (US$28,096) |
8.70% |
| 37,929 – 75,858 (US$56,191) |
14.50% on band over US$28,096 |
| 75,858 – 135,432 (US$100,320) |
15.80% on band over US$56,191 |
| 135,432 – 189,604 (US$140,447) |
17.30% on band over US$100,320 |
| Over 189,604 (US$140,447) |
18.30% on all income over US$140,447 |
| Source: Global Property Guide |
NEWFOUNDLAND AND LABRADOR INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 37,591 (US$27,845) |
8.70% |
| 37,591 – 75,181 (US$55,690) |
14.50% on band over US$27,845 |
| 75,181 – 134,224 (US$99,425) |
15.80% on band over US$55,690 |
| 134,224 – 187,913 (US$139,195) |
17.30% on band over US$99,425 |
| Over 187,913 (US$139,195) |
18.30% on all income over US$139,195 |
| Source: Global Property Guide |
NORTHWEST TERRITORIES INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 43,957 (US$32,561) |
5.90% |
| 43,957 – 87,916 (US$65,123) |
8.60% on band over US$32,561 |
| 87,916– 142,932 (US$105,876) |
12.20% on band over US$65,123 |
| Over 142,932 (US$105,876) |
14.05% on all income over US$105,876 |
| Source: Global Property Guide |
NORTHWEST TERRITORIES INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 43,137 (US$31,953) |
5.90% |
| 43,137 – 86,277 (US$63,909) |
8.60% on band over US$31,953 |
| 86,277 – 140,267 (US$103,902) |
12.20% on band over US$63,909 |
| Over 140,267 (US$103,902) |
14.05% on all income over US$103,902 |
| Source: Global Property Guide |
NOVA SCOTIA INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 29,590 (US$21,919) |
8.79% |
| 29,590 - 59,180 (US$43,837) |
14.95% on band over US$21,919 |
| 59,180 - 93,000 (US$68,889) |
16.67% on band over US$43,837 |
| 93,000 - 150,000 (US$111,111) |
17.50% on band over US$68,889 |
| Over 150,000 (US$111,111) |
21% on all income over US$111,111 |
| Source: Global Property Guide |
NUNAVUT INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 46,277 (US$34,280) |
4% |
| 46,277 – 92,555 (US$68,559) |
7% on band over US$34,280 |
| 92,555 – 150,573 (US$111,536) |
9% on band over US$68,559 |
| Over 150,573 (US$111,536) |
11.50% on all income US$111,536 |
| Source: Global Property Guide |
NUNAVUT INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 45,414 (US$33,640) |
4% |
| 45,414 – 90,829 (US$67,281) |
7% on band over US$33,640 |
| 90,829 – 147,667 (US$109,383) |
9% on band over US$67,281 |
| Over 147,667 (US$109,383) |
11.50% on all income US$109,383 |
| Source: Global Property Guide |
ONTARIO INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up 44,740 (US$33,141) |
5.05% |
| 44,740– 89,482 (US$66,283) |
9.15% on band over US$33,141 |
| 89,482 – 150,000 (US$111,111) |
11.16% on band over US$66,283 |
| 150,000 – 220,000 (US$162,963) |
12.16% on band over US$111,111 |
| Over 220,000 (US$162,963) |
13.16% on all income over US$162,963 |
| Source: Global Property Guide |
ONTARIO INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up 43,906 (US$32,523) |
5.05% |
| 43,906 – 87,813 (US$65,047) |
9.15% on band over US$32,523 |
| 87,813 – 150,000 (US$111,111) |
11.16% on band over US$65,047 |
| 150,000 - 220,000 (US$162,963) |
12.16% on band over US$111,111 |
| Over 220,000 (US$162,963) |
13.16% on all income over US$162,963 |
| Source: Global Property Guide |
PRINCE EDWARD ISLAND INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 31,984 (US$23,692) |
9.80% |
| 31,984 - 63,969 (US$47,384) |
13.80% on band over US$23,692 |
| Over 63,969 (US$47,384) |
16.70% on all income over US$47,384 |
| Source: Global Property Guide |
QUEBEC INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 44,545 (US$32,996) |
15% |
| 44,545 – 89,080 (US$65,985) |
20% on band over US$31,996 |
| 89,080 – 108,390 (US$80,689) |
24% on band over US$65,985 |
| Over 108,390 (US$80,689) |
25.75% on all income US$80,689 |
| Source: Global Property Guide |
QUEBEC INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 43,790 (US$32,437) |
15% |
| 43,790 – 87,575 (US$64,870) |
20% on band over US$31,633 |
| 87,575 – 106,555 (US$78,930) |
24% on band over US$63,263 |
| Over 106,555 (US$78,930) |
25.75% on all income US$78,930 |
| Source: Global Property Guide |
SASKATCHEWAN INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 45,225 (US$33,500) |
11% |
| 45,225 - 129,214 (US$95,714) |
13% on band over US$33,500 |
| Over 129,214 (US$95,714) |
15% on all income over US$95,714 |
| Source: Global Property Guide |
YUKON INCOME TAX 2020 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 48,535 (US$35,952) |
6.40% |
| 48,535 – 97,069 (US$71,903) |
9% on band over US$35,952 |
| 97,069 – 150,473 (US$111,461) |
10.90% on band over US$71,903 |
| 150,473 – 500,000 (US$370,370) |
12.80% on band over US$111,461 |
| Over 500,000 (US$370,370) |
15% on all income over US$370,370 |
| Source: Global Property Guide |
YUKON INCOME TAX 2019 |
| TAXABLE INCOME, CAD (US$) |
TAX RATE |
| Up to 47,630 (US$35,282) |
6.40% |
| 47,630 – 95,259 (US$70,562) |
9% on band over US$35,282 |
| 95,259 – 147,667 (US$109,383) |
10.90% on band over US$70,562 |
| 147,667 – 500,000 (US$370,370) |
12.80% on band over US$109,383 |
| Over 500,000 (US$370,370) |
15% on all income over US$370,370 |
| Source: Global Property Guide |
Residents are entitled to claim certain deductions, non-refundable tax credits, and refundable federal, provincial or territorial credits.
RENTAL INCOME
Deductible expenses include Capital Cost Allowance, advertising, insurance, interest, maintenance and repair costs, management, administration and legal fees, office expenses, property taxes, travel, utilities and others.
The depreciation allowance is called Capital Cost Allowance (CCA). Only 50% of the cost of the property is depreciable for the year of acquisition. The maximum CCA that can be taken is the amount that reduces the net income to nil.
Rental buildings may belong to different classes depending on the structure and the acquisition date. Most buildings acquired after 1987 belong to class 1 and are depreciated at 4%. Furniture and equipment are depreciated at 20%.
CAPITAL GAINS
Only half of the final capital gains are taxed as part of income. Capital gains are computed by deducting the costs incurred in selling and purchasing the property, capital expenditures, and such costs as additions and improvements in the property.
| |
Proceed of Disposition |
| Less: |
Adjusted Cost basis |
| Less: |
Outlays and Expenses on Disposition |
| = |
Capital Gains |
| |
Capital Gains ÷ 2 = Taxable capital gains |
Proceeds from the disposal of property used as a principal residence are exempt from taxation.
PROPERTY TAX
Real Property Tax
Property taxes are levied by local governments. The rates depend on the city or municipality where the property is located, and the assessed value of the property. Property taxes can be deducted from rental income when paying taxes.
For comparison, we show the effective residential tax rate as percent of market value for a detached bungalow and a standard condo apartment for different cities.
EFFECTIVE PROPERTY TAX RATES
(as % of Market Value) |
|
MUNICIPALITY
|
DETACHED BUNGALOW
|
STANDARD CONDO APARTMENT
|
| Calgary |
0.84
|
0.88
|
| Edmonton |
1.24
|
0.94
|
| Halifax |
1.18
|
1.18
|
| Montreal |
1.78
|
1.39
|
| Ottawa |
1.34
|
1.08
|
| Regina |
1.99
|
1.98
|
| Saskatoon |
1.57
|
1.83
|
| St. Catherines |
1.93
|
1.17
|
| St. John |
1.29
|
1.20
|
| Toronto |
1.15
|
1.05
|
| Vancouver |
0.72
|
0.57
|
| Victoria |
0.61
|
0.61
|
| Winnipeg |
1.96
|
2.56
|
| Source: Frontier Centre for Public Policy 2002 |