Leaving Canada: Departure Tax and Coming Back

When you leave Canada for good, the CRA can tax you on property you haven't sold, and the return for that year works differently from a normal one. Coming back has its own rules too.

Working out your residency status

The CRA looks at all the facts, including your residential ties and how long and why you're away. The significant ties are a home, a spouse or common-law partner, or dependants in Canada. Secondary ties that may matter include a car or furniture, Canadian bank accounts or credit cards, a Canadian driver's licence or passport, and provincial health coverage.

If you leave but keep your residential ties, you're usually still a factual resident, not an emigrant. If you're also a resident of a country Canada has a tax treaty with, you may be a deemed non-resident, and the emigrant rules apply to you. For the CRA's opinion, you can send Form NR73, Determination of Residency Status (leaving Canada). Our Ask Clint answer on moving abroad partway through the year covers a common case.

Your departure date and the return for that year

You usually become a non-resident on the latest of the day you leave, the day your spouse or partner and dependants leave, or the day you become a resident of your new country.

• File for the year you leave if you owe tax or want a refund. If you don't need to file, tell the CRA your departure date as soon as possible.
• Report your world income up to your departure date. After that you're taxed only on Canadian-source income.
• The usual due dates apply. For the 2025 tax year, most people had to file and pay by April 30, 2026.
• Tell your Canadian bank and anyone paying you that you're no longer a resident. The CRA needs your departure date as well, since non-residents generally can't get the Canada Groceries and Essentials Benefit (formerly the GST/HST credit) or the Canada child benefit.

The deemed disposition (departure tax)

When you emigrate, you're treated as having sold most of your property (shares, jewellery, paintings or a collection, for example) at fair market value and bought it straight back for the same amount. Any gain is a capital gain on your return, which is what people call departure tax. You work it out on Form T1243, Deemed Disposition of Property by an Emigrant of Canada, and carry the result to Schedule 3. The main exceptions the CRA lists:

• Canadian real or immovable property (plus Canadian resource and timber resource property)
• Canadian business property, including inventory, if the business is carried on through a permanent establishment in Canada
• pension plans, RRSPs, RRIFs, RESPs, RDSPs, TFSAs and similar plans
• property you owned when you last became a resident (or inherited afterward), if you were a resident for 60 months or less in the 10 years before leaving

Forms T1161 and T1244

If everything you owned when you left was worth more than $25,000 in total, file Form T1161, List of Properties by an Emigrant of Canada. Cash, registered plans and pensions, personal-use items worth under $10,000 each and a few other things don't count toward the total or go on the list. The form is due by your filing due date even if you don't otherwise have to file, and filing late costs $25 a day (minimum $100, maximum $2,500).

You can also elect on Form T1244 to put off paying departure tax, whatever the amount, until you actually sell the property, with no interest. The election is due by April 30 of the year after you emigrate and doesn't cover an employee benefit plan. If you make the election and the federal tax owing on the deemed disposition is more than $16,500 ($13,777.50 for former residents of Quebec), you have to give the CRA adequate security. That threshold counts federal tax only, and the CRA may want security for the provincial tax as well. Contact the CRA as soon as possible to arrange it, before April 30. When you later sell the property, some or all of the deferred tax can come due, and it's payable by April 30 of the year after the sale.

After you leave

Canadian payers withhold non-resident tax from things like pensions, RRSP and RRIF payments, dividends and rent, usually at 25% unless a tax treaty lowers it. It's often your final tax on that income. Our post on filing as a non-resident covers this and the elections that can get some of it back. You can keep a TFSA, but you can't contribute to it while you're a non-resident. Selling Canadian real estate later has its own process (see selling property as a non-resident).

Coming back to Canada

Generally, you become a resident again when you settle here and establish significant residential ties, such as a home or your family in Canada. That date goes on your return, and you report world income from then on. You're also generally treated as having sold and bought back most property you own at its fair market value on that date, so write those values down. They become your cost when you sell later.

If you left after October 1, 1996 and still own property that was deemed sold when you left, you can elect to unwind that deemed disposition, which may reduce or eliminate the departure tax. Send a written request listing the properties and the fair market value of each by your filing due date for the year you re-establish residency. If you deferred departure tax, you may have to pay it now, so check with the CRA.

How we help

Departure tax forms are among the government forms we fill out for people leaving Canada, and we prepare filings for non-residents, including selling property here after you've gone. If you have one of these forms in front of you and you're not sure, bring it to us.