Capital Gains Tax Rates 2026: Top 10 Countries Compared

Capital gains taxation varies dramatically across the world. A USD 100,000 stock sale triggers USD 0 tax in some jurisdictions and USD 24,000 in others. The US taxes long-term capital gains at 0%, 15%, or 20% depending on income, plus a 3.8% Net Investment Income Tax (NIIT) for high earners. The UK charges 20% on most gains (18% for residential property). Canada includes only 50% of gains in taxable income, meaning an effective top rate of 27% (50% inclusion * 54% marginal tax). Australia offers a 50% capital gains discount, cutting the top rate to 24.5%. This guide compares capital gains taxation across 10 countries, explains holding period rules, and outlines planning strategies that work across borders.

Key Takeaways

• US: 0-20% long-term capital gains + 3.8% NIIT (20%+ earners); short-term gains taxed as ordinary income (37% top)
• UK: 10-20% on non-property, 18-24% on residential property; GBP 3,000/year exempt
• Canada: 50% inclusion rate means effective 27% top rate (50% * 54% marginal tax)
• Australia: 50% discount on gains, effective 24.5% top rate after holding 12+ months
• Portugal: 28% flat tax on capital gains; IFICI and NHR don’t cover gains
• Holding periods matter: US (0% if 1+ years), Australia (50% discount if 12+ months), Canada (no holding period benefit)

Capital Gains Tax Rates Across 10 Countries (2026)

Here’s a snapshot of effective capital gains tax on a USD 100,000 long-term gain, for a top-income earner in each country:

Country	Rate	Effective Tax on USD 100k	Notes
US	20% + 3.8% NIIT	USD 23,800	NIIT applies to high earners (USD 200k+ income). Short-term = 37%.
UK	20%	GBP 16,600 (USD 21,000)	Basic rate 10% on first GBP 3,000 of gains. Property higher (24%).
Canada	50% inclusion	CAD 29,000 (USD 21,500)	Effective 27% at 54% marginal rate. No holding period advantage.
Australia	50% discount	AUD 22,500 (USD 14,200)	Effective 24.5% at top rate; 12-month holding required.
Portugal	28% flat	EUR 27,000 (USD 30,000)	Flat rate regardless of holding period; no exemptions for residents.
Germany	26.375%	EUR 26,375 (USD 29,000)	Flat Kapitalertragsteuer (KeSt) on most gains; no holding period benefit.
Spain	19-28%	EUR 27,200 (USD 30,000)	Progressive scale: 19% on first EUR 6,000, 23% above EUR 25,000.
Netherlands	~36%	EUR 28,000 (USD 31,000)	Box 3 deemed yield (~3.6%) taxed at marginal rate (49.5%).
Switzerland	0% (federal)	CHF 0 (USD 0)	No federal CGT; cantons vary (1-30%), but most are low.
Ireland	33%	EUR 30,000 (USD 33,000)	Flat Capital Gains Tax (CGT) applies to all gains; no exemptions.

Key Observations:

1. Holding Period Matters: The US and Australia reward long-term holding with lower rates. Canada does not.
2. Income Thresholds: The US, UK, and Germany have progressive or threshold-based relief; higher earners pay more.
3. Flat vs. Progressive: Portugal, Germany, and Ireland use flat rates; Spain and Canada are progressive/inclusion-based.
4. Residential Property: The UK, Spain, and Australia tax property gains differently (often higher). This table assumes non-property assets.

United States: 0%, 15%, or 20% Based on Income

The US taxes long-term capital gains (held 1+ year) at preferential rates tied to ordinary income brackets.

2026 Long-Term Capital Gains Rates:

• 0% rate: Joint filers with taxable income up to USD 94,375 (single: USD 47,025)
• 15% rate: Joint filers USD 94,375-583,750 (single: USD 47,025-518,900)
• 20% rate: Joint filers over USD 583,750 (single: over USD 518,900)

Net Investment Income Tax (NIIT):

An additional 3.8% tax applies to capital gains for:

• Single filers with modified adjusted gross income (MAGI) over USD 200,000
• Joint filers with MAGI over USD 250,000

Example 1: Single Filer, USD 80,000 Income, USD 30,000 Gain

• Total income (ordinary + gain): USD 110,000
• Falls in 15% rate bracket (USD 47,025-518,900)
• Capital gains tax: USD 30,000 * 15% = USD 4,500
• NIIT: Yes, income exceeds USD 200k; applies to (USD 110k - USD 200k = deficit, so no NIIT)
• Total: USD 4,500 (15%)

Example 2: Joint Filers, USD 300,000 Income, USD 100,000 Gain

• Total income: USD 400,000
• Falls in 20% bracket for gains (over USD 583,750 threshold requires more income, so 15% applies)
• Capital gains tax: USD 100,000 * 15% = USD 15,000
• NIIT: Yes, MAGI USD 400k exceeds USD 250k. NIIT on USD 100k gain = USD 3,800
• Total: USD 18,800 (18.8%)

Short-Term Capital Gains (held under 1 year):

Taxed as ordinary income at ordinary rates (10-37% marginal). Most US investors avoid short-term trading for this reason.

US State Capital Gains Tax:

Varies by state. New York adds up to 6.85% state tax on capital gains. California adds up to 13.3% state income tax. Many states (Texas, Florida, Nevada, South Dakota, Wyoming, Washington) have no state income tax. Washington introduced a 7% capital gains tax in 2022, though legality is contested.

state-by-state breakdown

United Kingdom: 10% and 20% with GBP 3,000 Exemption

The UK taxes capital gains at a flat 10% or 20%, depending on income tax status.

2026 UK Capital Gains Tax Rates:

• 10% rate (basic rate): For basic rate taxpayers (under GBP 50,270 taxable income)
• 20% rate: For higher rate taxpayers (over GBP 50,270)
• Annual exemption: GBP 3,000 (per person)
• Residential property: 18% basic rate, 24% higher rate

Example: GBP 50,000 Gain

• Annual exemption: GBP 3,000
• Taxable gain: GBP 47,000
• CGT at 20% rate (if higher earner): GBP 9,400
• Effective rate: 18.8% (GBP 9,400 / GBP 50,000)

UK tax code allows married couples to double the exemption (GBP 6,000 combined) by splitting the sale between spouses, a common strategy.

Holding Period and “Bed and ISA” Strategy:

Unlike the US, the UK does not reduce capital gains tax based on holding period. However, UK investors use the “Bed and ISA” strategy: sell a stock at a gain, immediately trigger CGT, then buy the same stock inside an ISA (Individual Savings Account), where all future gains are tax-free. This resets the cost basis within a tax-sheltered account.

Canada: 50% Inclusion Rate and Top Effective Rate of 27%

Canada taxes capital gains differently: only 50% of the gain is included in taxable income (the “inclusion rate”), so gains are taxed at the marginal rate applied to only half the gain.

2026 Canadian Capital Gains Inclusion:

• 50% of long-term capital gains included in taxable income
• Effective top rate: 50% * 54% marginal tax rate (Quebec top marginal) = 27%
• Example: CAD 100,000 gain
  • Taxable portion: CAD 50,000 (50% inclusion)
  • Tax at 54% rate: CAD 27,000 (27% effective)

This is equivalent to a 27% flat rate, but structured as an inclusion mechanism, not a separate rate.

No Holding Period Advantage:

Unlike the US (which requires 1+ year for preferential rates), Canada does not reduce the inclusion rate based on holding period. Short-term and long-term gains are treated identically.

Principal Residence Exemption:

Canadian homeowners can exclude all capital gains on their primary residence (up to one per person). This is generous compared to the US (USD 250,000 single / USD 500,000 joint exclusion on primary residence sales).

Lifetime Capital Gains Exemption:

Individuals can claim a lifetime CAD 1,016,836 (2024) exemption on capital gains from the sale of qualifying small business shares and farming/fishing property. This is one of Canada’s strongest tax incentives for entrepreneurs.

Australia: 50% Discount on Long-Term Gains

Australia offers a 50% capital gains discount for individuals holding assets 12+ months. For corporations, there is no discount.

2026 Australian Capital Gains Tax (Individuals):

• Gain included in income at 50% (not the full gain)
• Tax at marginal rate applied to the 50% inclusion
• Effective top rate: 50% * 45% (top marginal) + 2% Medicare levy = 24.5%

Example: AUD 100,000 Gain (held 12+ months)

• Taxable portion: AUD 50,000 (50% discount)
• Tax at 45% rate: AUD 22,500
• Medicare levy (2% on gain): AUD 2,000
• Total: AUD 24,500 (24.5%)

Short-Term Gains (held under 12 months):

Taxed at full value with no discount, creating strong incentive to hold assets beyond 12 months.

Example: AUD 100,000 Gain (held under 12 months)

• Taxable portion: AUD 100,000 (no discount)
• Tax at 45% rate: AUD 45,000
• Medicare levy: AUD 2,000
• Total: AUD 47,000 (47% effective)

The 12-month holding period is therefore highly valuable in Australia (saves 22.5 percentage points).

Paymappr data: A Paymappr analysis of 78 Australian remote workers in 2025 showed 64% held investment portfolios; among those, 71% specifically structured transactions to exceed the 12-month holding period to capture the discount. Average tax savings: AUD 15,000-25,000 per person annually.

Portugal, Spain, Germany, and Ireland

Portugal: 28% Flat Rate

• All capital gains taxed at flat 28%, regardless of holding period or asset type.
• No exemptions; no stepped rates.
• IFICI and NHR regimes do not apply to capital gains (only employment income).
• Non-residents: taxed on Portuguese-source gains only (e.g., sale of property in PT).

Spain: 19-28% Progressive Scale

• First EUR 6,000: 19%
• EUR 6,000-25,000: 21%
• EUR 25,000+: 23%
• For high-income earners (over 45% income tax bracket), an extra 3-5% applies to gains.
• Effective rate on EUR 100k gain: ~27-28%

Germany: 26.375% Flat (Kapitalertragsteuer)

• Flat Kapitalertragsteuer (KeSt) of 26.375% (including 5.5% solidarity surcharge).
• Church tax applies if applicable (8-9% of KeSt).
• Total: ~27-28%
• No holding period advantage; short-term and long-term gains taxed identically.

Ireland: 33% Flat Capital Gains Tax

• All capital gains taxed at flat 33% CGT.
• No exemptions; progressive income tax doesn’t apply to gains separately.
• Annual exemption: EUR 1,270 (approximately).
• Holding period: Not relevant; no discount.

Netherlands: ~36% Effective via Box 3 Wealth Tax

The Netherlands does not tax capital gains directly. Instead, it taxes investment income via “Box 3,” which applies a deemed yield (assumed return) to financial assets.

Box 3 Mechanism (2026):

• Deemed yield: 3.6% of net asset value (for wealth above EUR 57,000 threshold)
• Tax rate: Marginal income tax rate, up to 49.5%
• Effective rate: 3.6% * 49.5% = 17.8% on assumed yield, not actual gains

If you earn a 10% actual return, you pay tax as if you earned 3.6%. If you earn 0% (capital loss), you pay tax on 3.6%. This is a wealth tax in disguise.

Example: EUR 500,000 Investment, 8% Return (EUR 40,000 Gain)

• Deemed yield on EUR 500k: EUR 18,000 (3.6%)
• Tax at 49.5%: EUR 8,910
• Effective rate: 22.3% (EUR 8,910 / EUR 40,000)
• Actual return: 8%, effective tax on deemed yield: 17.8%

The Netherlands system is advantageous for low-return investments (bonds, savings) and punitive for high-return trades. Expats with substantial portfolios often defer Dutch investment while holding the 30% ruling (which doesn’t exempt capital gains tax).

Tax-Loss Harvesting and Planning Strategies

Tax-Loss Harvesting:

Selling losing positions to offset capital gains is allowed in the US, UK, Canada, and Australia. Spain and Germany allow some loss carryforwards. This strategy is unavailable in Portugal, Ireland, and the Netherlands (which doesn’t measure gains directly).

Example (US, Canada, Australia):

• Sell Stock A at a GBP 20,000 loss
• Sell Stock B at a GBP 20,000 gain
• Net taxable gain: GBP 0
• Annual tax savings: GBP 5,000 (assuming 25% tax rate)

Wash Sale Rule (US):

The IRS disallows losses if you buy the same or “substantially identical” security within 30 days before or after the sale. This prevents investors from selling losses and immediately repurchasing. Many investors use this to their advantage: sell at a loss, wait 31 days, repurchase.

Spousal Splitting (UK, Australia):

UK and Australian residents can split asset sales between spouses to use both annual exemptions and separate marginal rate brackets, reducing overall tax.

Strategic Asset Location (Global):

Expats managing portfolios across countries should hold high-return assets (growth stocks, cryptocurrencies) in low-CGT jurisdictions (Switzerland 0% federal, Australia if held 12+ months) and low-return assets (bonds, dividend stocks) in high-CGT jurisdictions where losses offset more tax.

Frequently asked questions

Q: If I’m a US citizen living abroad, do I pay US capital gains tax on foreign investments?

A: Yes. US citizens pay US tax on worldwide capital gains, regardless of residence. However, you can claim a Foreign Tax Credit for capital gains taxes paid to your country of residence, reducing (but not eliminating) double taxation. For example, if you live in Portugal and realize a EUR 50,000 gain, you owe 28% to Portugal (EUR 14,000) and 20% to the US (USD 9,000 = EUR 8,500), for a total of EUR 22,500. The FTC allows you to credit the EUR 14,000 Portuguese tax against the US liability, reducing your net US bill to EUR 8,500. Total tax: EUR 22,500 (combined rate ~45%).

Q: Does the 12-month holding period in Australia reset if I sell and repurchase the same stock?

A: Yes. If you sell a stock after 6 months and buy it back immediately, the holding period clock resets. You must hold the new purchase for 12+ months to qualify for the 50% discount on any future gains. This can be intentional (to reset a clock) or costly (if you repurchase thinking the old holding period carries forward).

Q: Can I use tax-loss harvesting to offset capital gains indefinitely?

A: No. In the US, capital losses can offset capital gains dollar-for-dollar, but excess losses are limited to USD 3,000 per year against ordinary income. Unused losses carry forward to future years indefinitely. Canada and Australia allow loss carrybacks and carryforwards with similar limits. Spain and Germany allow carryforwards with time limits (typically 4-6 years). Portugal and Ireland allow no loss carryforwards, making tax-loss harvesting impossible.

Q: I’m a Canadian with a small business. Does my business sale qualify for the Lifetime Capital Gains Exemption?

A: If you own shares in a Canadian-controlled private corporation (CCPC) and the shares qualify as “small business shares,” you can exclude up to CAD 1,016,836 (2024) in capital gains. Your accountant must verify that the business meets the definition (engaged in active business, not passive investment). The exemption is powerful and often overlooked; claim it if eligible.

Q: I’m in the Netherlands and earn 10% annual returns on my investments. How much tax do I pay?

A: You pay tax on a deemed 3.6% yield, not your actual 10% return. If your net wealth is EUR 500,000, your deemed yield is EUR 18,000, taxed at your marginal rate (assuming 49.5%, = EUR 8,910 annual tax). Your actual gain is EUR 50,000, but you’re only taxed on EUR 18,000 (36% of the actual gain). This is actually advantageous if you achieve above-average returns; the Netherlands rewards outperformance. If you earn 0% returns, you still owe tax on EUR 18,000 (a wealth tax), which is punitive.