Quick answer
You stop being a Canadian tax resident in 2026 on the day you cut your significant residential ties – home, spouse or partner, and dependants – and settle abroad. On that date, departure tax treats most of your assets as sold at market value. Half of the resulting gain is taxable. You then file a final part-year return by 30 April 2027.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Check my tax setup →You are leaving Canada and want a clean break with the CRA. After reading, you will know how to prove you left, how departure tax works, and what still gets taxed in Canada once you are a non-resident.
Canada ceasing tax residency in 2026: the key figures
| Item | 2026 detail |
|---|---|
| Date you become non-resident | Latest of: you leave, your spouse and dependants leave, you become resident abroad |
| Departure tax | Deemed sale of most assets at market value (section 128.1(4) ITA) |
| Capital gains inclusion rate | 50% of the gain is taxable |
| Exempt from departure tax | Canadian real estate, RRSPs, RRIFs, pensions, TFSAs, most business assets in Canada |
| Asset list required | Form T1161 if your property is worth more than CAD 25,000 when you leave |
| Deferring payment | Post security with Form T1244; no security needed on tax on up to CAD 100,000 of taxable capital gains |
| Withholding tax after you leave | 25% on Canadian passive income, often reduced by treaty |
| Final return deadline | 30 April 2027 (15 June 2027 if self-employed) |
Is this guide for you?
Read on if you…
- live in Canada now and plan to move abroad for good, or for several years
- own investments, crypto or a private company that could trigger departure tax
- want to keep some Canadian assets, such as an RRSP or a rental property, after you go
Probably not your case if you…
- are leaving for a short work assignment and keeping your home and family in Canada
- want the theory of the residence tests – see our guide to Canadian tax residency rules
When do you legally stop being a Canadian resident?
There is no form that switches off your residence. You stop being resident when your ties with Canada are no longer significant. The CRA usually takes the latest of these dates:
- the day you leave Canada
- the day your spouse or common-law partner and dependants leave
- the day you become a resident of the country you are moving to
Ties to cut, and ties you may keep
| Tie | Cut it? | Why |
|---|---|---|
| Home in Canada | Sell it, or rent it at arm's length on a long lease | An available home keeps you resident |
| Spouse or partner, dependants | They should move with you | One of the strongest ties |
| Provincial health insurance | Cancel | A clear signal you left |
| Driver's licence, car | Give up or sell where possible | Secondary ties add up |
| Bank account | You may keep one | Tell the bank you are non-resident |
| RRSP, TFSA | You may keep them | Rules change once you leave |
Honestly? The single best proof of departure is becoming resident in a new country. Moving between short rentals for years weakens your case.
How does Canada's departure tax work?
When you emigrate, you are deemed to have sold most of your property at its fair market value on the day before you left. You then reacquire it at the same value. No cash changes hands, but you report a capital gain or loss.
What is caught
- shares and funds in non-registered accounts
- cryptocurrency
- shares of your private company, Canadian or foreign
- foreign real estate
What is not caught
- Canadian real estate – taxed later when sold
- RRSPs, RRIFs, registered pension plans and TFSAs
- property of a business you carry on through a permanent establishment in Canada
- for short-term residents (resident 60 months or less in the past 10 years), property you owned on arrival or inherited
How much you pay
Half of the deemed gain – the 50% inclusion rate – is added to your income and taxed at your marginal rate. In most provinces, that means a top effective rate of roughly 24% to 27% on the full gain. For detail on rates and exemptions, see our guide to capital gains tax in Canada.
Paying later
You can elect on Form T1244 to defer payment until you actually sell. The CRA asks for security above the tax on CAD 100,000 of taxable capital gains. No interest runs while acceptable security is in place.
Your exit plan: before, during and after
Before you leave (3–6 months out)
- List every asset with its cost and expected value on departure day.
- Model departure tax. Consider selling loss-making assets to offset gains.
- Check the treaty with your destination country, and its rules for newcomers.
- Decide what happens to your Canadian home: sell or rent at arm's length.
Departure day
- Keep proof of the date: one-way ticket, new lease abroad, moving invoice.
- Cancel provincial health coverage and tell your banks you are a non-resident.
- Stop contributing to your TFSA. Contributions while non-resident cost 1% per month.
After you leave (first year)
- File your final T1 return by 30 April 2027, showing your departure date.
- Report worldwide income up to departure, and Canadian-source income after.
- Attach Form T1161 and Form T1243 for deemed dispositions, and Form T1244 if you defer.
- Optionally file Form NR73 to ask the CRA for an opinion on your status.
- If you rent out Canadian property, appoint an agent and consider the section 216 election – filing a return on net rent instead of 25% tax on gross rent.
What does Canada still tax after you leave?
As a non-resident you pay Canadian tax only on Canadian-source income.
| Income | 2026 treatment |
|---|---|
| Dividends from Canadian companies | 25% withholding, often 15% under a treaty |
| Rent from Canadian property | 25% of gross, or net-basis return under section 216 |
| RRSP and RRIF withdrawals | 25% withholding; periodic payments often lower under treaty |
| CPP and OAS benefits | Withholding by treaty; OAS recovery tax may apply |
| Sale of Canadian real estate | Taxable; buyer withholds unless you get a clearance certificate |
| Employment duties performed in Canada | Taxable on a T1 return |
Example – Marc, product manager leaving Montreal for Dubai
Marc leaves on 1 August 2026 with his wife and child. He sells his condo and cancels his Quebec health card. His non-registered ETFs cost CAD 80,000 and are worth CAD 200,000 on departure: a CAD 120,000 deemed gain, of which CAD 60,000 is taxable. He also holds Bitcoin bought for CAD 20,000, now worth CAD 70,000, adding CAD 25,000 of taxable gain. His RRSP stays untouched. He reports both gains on his final 2026 returns, federal and Quebec.
Marc's exit cost turned on two asset values. Yours will too.
Plan my exit: we model your departure tax and the best date to leave before you book the flight.
Check my tax setup →Common mistakes (and what they cost)
- Leaving your family behind for the school year → you stay resident until they leave, and pay Canadian tax on months of foreign income.
- Forgetting departure tax on crypto or private shares → reassessment with interest, and penalties for an incomplete return.
- Not filing Form T1161 → a penalty of CAD 25 per day, up to CAD 2,500.
- Selling Canadian real estate without a clearance certificate → the buyer must withhold 25% of the gross price, not of the gain.
- Contributing to your TFSA while abroad → a 1% per month penalty tax on each contribution.
Frequently asked questions
Do I need to tell the CRA that I am leaving Canada?
You tell the CRA by filing your final return with your departure date. Form NR73 is optional and asks the CRA for an opinion on your status. You should also update your address and tell your banks and financial institutions, so they apply non-resident withholding. Without the departure date on your return, you remain on file as a resident.
Is my RRSP subject to departure tax?
No. RRSPs, RRIFs, registered pension plans and TFSAs are excluded from the deemed disposition. You can keep them after you leave. Withdrawals will face Canadian withholding tax, generally 25%, which some treaties reduce for periodic pension payments. Your new country may also tax the withdrawal, usually with a credit for the Canadian tax.
Can I avoid departure tax by giving away assets before leaving?
Not really. Gifts to anyone other than your spouse are treated as sales at fair market value, so the gain is taxed anyway. Transfers to a spouse can roll over at cost, but attribution rules may bring the gain back to you. The legal route is planning: timing, using losses, and deferral by posting security.
What if I come back to Canada later?
If you return, you can elect to unwind the departure tax on property you still own. You must file the election with your return for the year you come back. This avoids paying tax twice on the same gain. Keep your old valuations and departure documents – you will need them years later.
Does the CRA require a certificate to sell my house after I leave?
Yes, for Canadian real estate. As a non-resident seller, you should apply for a certificate of compliance under section 116 within 10 days of the sale. Without it, the buyer must hold back 25% of the gross price and send it to the CRA. With it, the holdback is limited to tax on the actual gain.
Will I lose my Canada Child Benefit?
Yes. The Canada Child Benefit and the GST/HST credit stop once you and your family become non-residents. Tell the CRA your departure date to avoid overpayments, which you would have to repay. Your CPP and OAS entitlements are not lost, but OAS for non-residents depends on years of residence and treaty rules.
Related guides
- How Canadian tax residency is decided
- Capital gains tax in Canada
- Cryptocurrency taxes in Canada
- Canada's tax landscape in one page
- Ceasing tax residency in the United Kingdom
- Ceasing tax residency in Ireland
- All country tax guides
Sources
- Canada Revenue Agency – Emigrants and income tax
- Canada Revenue Agency – International and non-resident taxes
- Justice Laws – Income Tax Act
- Revenu Québec
- OECD – Tax treaties
This guide is general information, not personalised tax advice. See how we research and review.
Leaving Canada? Know your departure tax before you go.
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