Taxes When Leaving Canada
Departure tax, your last Canadian return, forms T1243, T1161 and T1244, and what happens to your RRSP, TFSA, home and pensions.
The short version
- You stop being a Canadian resident for tax when you cut your ties: you leave, your spouse and kids leave or are already gone, and you set up a home abroad. That date goes on your last return.
- Departure tax: most investments are treated as sold at market value the day you leave. Canadian real estate, RRSPs, RRIFs, TFSAs and pensions are not.
- You can put off paying the departure tax until you actually sell, with form T1244. Above $16,500 of federal tax, CRA wants security.
- Own more than $25,000 of property when you leave (not counting cash, registered plans and small personal items)? List it on form T1161, or pay $25 a day late.
- After you go, Canada still taxes Canadian income: usually 25% withheld from RRSP and RRIF payments, rent and dividends, less under a tax treaty.
Taxes When Leaving Canada
Leaving Canada is the one time CRA charges you for a sale you never made. It's called departure tax, and it exists because once you're gone, Canada can't tax the growth that happened while you lived here. So it taxes it on your way out, like a hotel checking the minibar. Plan it and the bill is manageable, or deferred. Ignore it and you find out when the new country is also asking questions.
Your Departure Date
CRA usually takes the latest of: the day you leave, the day your spouse or common-law partner and dependants leave, and the day you become a resident of the new country. Keep a home here that you could move back into, or leave your family behind, and CRA may decide you never left at all. The rules on ties are on tax residency; form NR73 asks CRA for its opinion.
What the Departure Tax Hits
| Treated as sold when you leave | Not treated as sold |
|---|---|
| Shares, ETFs and mutual funds in non-registered accounts | Canadian real estate, including your home and rentals |
| Shares of your private corporation | RRSPs, RRIFs, TFSAs, RESPs, RDSPs |
| Crypto, foreign property, collectibles worth having | Pensions and annuities |
| Partnership interests | Property you brought with you, if you lived here 60 months or less in the last 10 years |
Example: you leave Ontario in 2026 with a stock portfolio that cost $100,000 and is worth $200,000, after earning $60,000 here that year. The $100,000 deemed gain adds about $15,200 of tax, about $10,250 of it federal. That's under the $16,500 federal line, so you can defer the whole amount with form T1244 without posting security, and pay when you actually sell. Interest doesn't run on a properly deferred amount. Gains in general are on capital gains tax, and you can run your own numbers in the capital gains calculator.
Planning a move abroad?
Tell the assistant where you are going, when, and what you own: investments, property, RRSPs, a company. It explains what is taxed on the way out, what can be deferred, and what happens to each account.
Your Last Canadian Return
- Enter your departure date. Report world income up to that date, and only certain Canadian income after it.
- Personal credits are prorated to the days you were resident, like a newcomer's first year in reverse; see first tax return. Coming back later? See returning to Canada, which can also unwind departure tax.
- Attach the departure forms: T1243 for the deemed sale, T1161 for the property list, T1244 if you defer.
- File by April 30 of the next year; see tax deadlines.
- Tell CRA you've left so the child benefit and Groceries and Essentials Benefit stop. Repaying a year of benefits you weren't entitled to is a poor welcome-home gift.
What Happens to Each Account
- RRSP and RRIF: you can keep them. Withdrawals have 25% non-resident tax withheld, often less for periodic payments under a treaty. Your new country may tax them too; see RRSP.
- TFSA: you can keep it and withdraw tax-free in Canada, but you earn no new room, and contributing as a non-resident costs 1% a month. The new country may not respect the tax-free part; see TFSA.
- Your home: renting it out after you leave means 25% of the gross rent is withheld unless you file form NR6 and a yearly section 216 return. Selling it later as a non-resident needs a CRA clearance certificate; see non-resident tax.
- CPP and OAS: CPP is paid anywhere. OAS abroad usually needs 20 years of Canadian residence after age 18. Both have non-resident tax withheld.
- Investment income: dividends and interest from Canada have tax withheld at source; see investment taxes.
Moving to the U.S.?
The Canada-U.S. treaty has extra rules for emigrants: a step-up of cost for U.S. tax purposes in many cases, and relief for RRSPs. Both countries' returns are needed in the year you move. We explain the Canadian side; get U.S. advice for the other half. Foreign tax paid on the same income is handled by the foreign tax credit.
Leaving Canada Questions
What is departure tax in Canada?
When you stop being a resident, you are treated as having sold most of your property at fair market value on the day you left. The capital gain is taxed on your final return as a resident. Canadian real estate, registered plans such as RRSPs and TFSAs, and pensions are excluded.
Can I defer departure tax?
Yes. Form T1244 lets you defer paying the tax on deemed dispositions until you actually sell. CRA requires security if the federal tax deferred is more than $16,500. The election is due April 30 of the year after you leave.
What is form T1161?
A list of the property you owned when you left Canada, required if its total fair market value is more than $25,000. Cash, registered plans and personal-use items worth under $10,000 are left out. Filing late costs $25 a day, up to $2,500.
Can I keep my RRSP and TFSA after leaving Canada?
Yes. RRSP and RRIF withdrawals have non-resident tax withheld. A TFSA stays tax-free in Canada, but you get no new room while non-resident and contributions are penalized 1% a month.
Do I still pay Canadian tax after I leave?
On certain Canadian income, yes. Pensions, RRSP and RRIF withdrawals, rent and dividends from Canada usually have 25% non-resident tax withheld, reduced under many tax treaties.
Sources: CRA, Dispositions of property (emigrants); Leaving Canada (emigrants). Checked October 2026. The example uses our 2026 Ontario rules engine with basic credits, rounded; the departure-year return also prorates credits, so the real figure differs a little. The 20-year OAS rule and treaty withholding rates are general; your country's treaty or social security agreement may differ. We do not advise on U.S. tax.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.