Cap Rate vs TGA: Are They the Same Thing?
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In brief — Yes. "Cap rate" (capitalization rate) and "TGA" (taux global d'actualisation) mean exactly the same ratio: net operating income divided by price. It is simply the English term and the Quebec French term for the same thing. What you really need to separate is the cap rate/TGA from the gross rent multiplier, which ignores expenses.
You see "cap rate" on a listing, "TGA" in an appraisal, and wonder whether to compare them. The answer is simple: it is the same number.
Two names, one calculation
- TGA (taux global d'actualisation): the term used in Quebec.
- Cap rate (capitalization rate): the term used elsewhere in Canada and in English.
Both are computed the same way: net operating income ÷ price. A 5% TGA is a 5% cap rate. No conversion needed.
What really sets them apart: the GRM
The real confusion is not between cap rate and TGA, but between net income and gross income:
- Cap rate / TGA = net operating income ÷ price (after expenses).
- GRM (gross rent multiplier) = price ÷ gross income (before expenses).
The GRM is quicker to compute but misleading: two properties with the same GRM can have very different cap rates, depending on their expenses. Always check which basis a number uses.
And the net income multiplier?
The net income multiplier is the inverse of the cap rate: price ÷ net income. A 5% cap rate equals a multiplier of 20. Same information, shown as a multiplier rather than a percentage.
For the full calculation and a worked example, see the cap rate for Canadian rentals guide.
FAQ
Are the cap rate and the TGA the same? Yes. They are two names — English and Quebec French — for the same ratio: net operating income divided by price.
What is the difference between the cap rate and the GRM? The cap rate (or TGA) is computed on net income, after expenses; the GRM is computed on gross income. The GRM ignores expenses and can therefore mislead.
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For information only, not personalized financial advice. Last verified: July 2026.