In Canada, the proceeds from the sale of a property that was your principal residence is tax-free. With a residential income property, you may claim a capital gains exemption only for the percentage of space within the property that you occupied. Currently in Canada capital gains are taxed at 50% of the net gain of your sale at your marginal tax rate. For example, if you sell your income property for $50,000 more than you paid, you will have to declare an additional $25,000 on taxable income. It is strongly recommended that you discuss the tax implications of selling your income property with your accountant or financial planner.