Cap Rate Calculator Canada

Typical two-bedroom deals by province

Each row uses that province’s default purchase price, CMHC two-bedroom sitting rent where we have it, CMHC vacancy, and the local property tax assumption. Ordered by cap rate, highest first.

New Brunswick, P.E.I., and Newfoundland and Labrador use starter rents, not a CMHC major-CMA average. Replace them with the rent roll.

Typical two-bedroom deals by city

Same price and rent in every CMA, so mill rate and CMHC vacancy are the only things that move. Flip to condo vacancy — CMHC’s 2025 survey kept it well below purpose-built. Edmonton is not Calgary.

Typical two-bedroom preloads, city mill rates. Ordered by cap rate, highest first.

Mississauga and Brampton use the Toronto CMA sitting rent. The mill rate is theirs. Campus-area vacancy in Peel ran above 4% in CMHC’s GTA chapter.

The same $400,000 building, $1,800 a month

Hold price, rent, insurance, and maintenance still. Only CMHC vacancy and the provincial tax assumption move. This is the part a national “5% vacancy, 1% tax” spreadsheet flattens.

Vacancy is not 5% everywhere

CMHC’s 2025 Rental Market Report put Canada’s purpose-built vacancy rate at 3.1%, up from 2.2% in 2024. Calgary was unchanged at 5.0% — the highest among major markets — even as the rental stock grew 11%. Vancouver hit 3.7%, the highest since 1988. Toronto hit 3.0% for the first time since the pandemic. Montréal was 2.9%. A spreadsheet that haircuts every city at 5% is running Calgary’s number in Toronto.

Condo vacancies stayed tighter than purpose-built almost everywhere. Toronto’s rental condos were at 1.0%. If you are buying a strata unit, the purpose-built default in this calculator is the conservative one.

The rent in the model has to be rent you can collect

Ontario’s 2026 guideline is 2.1% on covered units, with vacancy decontrol and an exemption for units first occupied after 15 November 2018. B.C.’s 2026 limit is 2.3%. Manitoba is 1.8%, but units first occupied after March 2005 and units at $1,670 a month or more are exempt. Nova Scotia caps existing tenancies at 5% through 2027. New Brunswick is a hard 3% with six months’ notice. P.E.I. is vacancy-controlled: you generally cannot reset to market just because the tenant left. Alberta, Saskatchewan, and Newfoundland and Labrador have no standard annual percentage cap.

CMHC’s published two-bedroom averages are sitting rents. In Halifax, turnover two-bedrooms were 23% above sitting rents in 2025. A cap rate on asking rent is a different building from a cap rate on the rent roll.

What cap rate is — and what it is not

Gross yield is annual rent over price. Cap rate is NOI over price. The gap is vacancy plus operating expenses. The mortgage is not in either number. Neither is land transfer tax. A Toronto purchase that looks like a 2.5% cap can be a still-worse cash-on-cash once you write the municipal land transfer tax cheque.

Cap rate FAQs