How is tax calculated when an Ontario resident sells property in another country?

You calculate the gain in Canadian dollars and report it on Schedule 3, then claim a foreign tax credit if you paid foreign tax. A capital gain is the proceeds of disposition minus the property's adjusted cost base (ACB) and any outlays and expenses of selling it. For 2025 the capital gains inclusion rate is 50%, so half of a capital gain is taxable.

For foreign currency, convert the proceeds at the exchange rate in effect at the time of the sale, the cost base at the rate on the purchase date, and expenses at the rate when they were incurred. This means a change in exchange rates between purchase and sale can affect your Canadian-dollar gain. Where you paid foreign tax on income you reported, the federal credit is generally the lesser of the foreign income tax you actually paid and the Canadian tax otherwise payable on your net income from that country.

For U.S. property, the Canada–U.S. Tax Convention allows the U.S. to tax gains from selling real property there, and Canada gives a deduction from Canadian tax for U.S. income tax paid on U.S.-source income. Your own facts decide the details, so confirm with a lawyer or accountant.