💡 What Is Departure Tax (Deemed Disposition)?
When you leave Canada permanently, the Canada Revenue Agency (CRA) treats you as if you sold most of your assets on the day you leave — even if you didn’t actually sell them.
This is called a deemed disposition, and it triggers departure tax, a form of capital gains tax (CGT).
👉 Official CRA reference: Leaving Canada (emigrants) – CRA
You must report the deemed gains on your departure return for that year.
🏠 Property Rules for Canadian Expats
Property (including homes and cottages) is subject to CGT if you’re considered to have disposed of it.
But there are exceptions:
✅ Exempt Assets:
- Canadian real estate is excluded — it remains “taxable Canadian property,” not subject to departure tax until actually sold.
- RRSPs, pensions, and other registered accounts are also excluded.
💬 Example:
If you move to Singapore in 2025, the CRA assumes you sold your foreign assets (e.g., stocks, investments), but not your Canadian home — that remains taxable when you eventually sell it.
⚖️ How the CRA Calculates Departure Tax
- Determine the fair market value (FMV) of your assets the day before leaving.
- Subtract the adjusted cost base (ACB) — the original purchase price + expenses.
- The difference = your capital gain, taxed as if sold that day.
You can elect to defer payment of this tax until you actually sell the asset by filing Form T1244 and providing security to the CRA.
🔗 External reference: Form T1244 – Election to Defer Payment of Tax on Income Relating to Deemed Dispositions
🌍 Selling Property After Becoming a Non-Resident
Once you’re officially non-resident, selling Canadian property requires:
- Reporting the sale to the CRA within 10 days using Form T2062.
- Paying any withholding tax due.
- Filing a Section 216 return to report the actual gain and claim refunds if overpaid.
🔗 Related: Filing a Section 216 Return for Canadian Rental Property (create later)
If you sell foreign property (e.g., your new home abroad), your new country’s tax rules apply — check the Canada–Country Tax Treaty List to avoid double taxation.
📅 Residency Drives Everything
Whether you pay departure tax or not depends on your residency status when leaving Canada.
CRA looks at:
- Residential ties (home, family, accounts)
- Days in-country (183-day rule)
- Intention to return
🔗 Learn more: Canada Expat Tax Residency Tests
💰 Felix’s Quick Tips
🦊 File your departure return properly — it tells CRA you’ve ceased residency.
🦊 Consider deferring departure tax using Form T1244 if you plan to sell later.
🦊 Keep evidence of asset values and travel dates — the CRA may review years later.
🦊 Review treaty rules if both countries claim you as a resident.
🇨🇦 For Canadian Expats
- Need the full roadmap? Read the Canada Expat Tax Guide.
- Want to avoid these traps? Watch Common Mistakes Canadian Expats Make.
- Ready to organize your move? Download the Free Expat Tax Checklist.
🧭 See Also
- Canada Expat Tax Residency Tests
- Departure Tax Explained (general article)
- Expat Tax Tips & Insights
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