Canada’s Departure Tax When You Emigrate (2026)
Key takeaways
- On emigration you are deemed to have disposed of certain property at fair market value, which can create taxable capital gains even though nothing was actually sold.
- Excluded property — not subject to deemed disposition — includes Canadian real property, Canadian business property, and registered plans such as RRSPs, RRIFs and TFSAs.
- Report the deemed disposition on Form T1243; if the total fair market value of all your property exceeded CAD 25,000, also file Form T1161.
- You can elect on Form T1244 to defer paying the departure tax, without interest, until the property is actually sold — usually by providing acceptable security to the CRA.
- Departure tax is reported on your final (part-year) Canadian return for the year you leave, normally due by 30 April of the following year.
- Canadian real estate is not caught by departure tax but is instead taxed on a later sale through the section 116 clearance-certificate process.
What the departure tax actually is
The departure tax is not a separate tax; it is regular capital gains tax triggered by a deeming rule. The CRA explains that when you leave Canada you are considered to have sold certain types of property at their fair market value and to have immediately reacquired them for the same amount, even if you have not actually sold them. This “deemed disposition” crystallises any accrued gain up to your departure date, so Canada can tax the growth that happened while you were resident before it loses the right to do so.
The taxable amount is the accrued gain — fair market value on the departure date minus the adjusted cost base — of which the standard inclusion rate applies. Assets commonly caught include publicly traded shares and other securities held outside registered accounts, mutual fund units, cryptoassets, and personal-use items of significant value such as jewellery, paintings and collections.
Which property is excluded
Several important categories are exempt from the deemed disposition. According to the CRA’s guidance for emigrants, you are not deemed to dispose of:
- Canadian real property, Canadian resource property and timber resource property;
- Property of a business carried on through a permanent establishment in Canada;
- Pensions and similar rights, including registered plans — RRSPs, RRIFs, registered pension plans (RPPs), TFSAs, RESPs, RDSPs, pooled registered pension plans and deferred profit-sharing plans;
- Certain rights to benefits under employee stock option and similar arrangements; and
- Property owned when you last became a Canadian resident (or inherited afterwards), if you were resident for 60 months or less in the previous 10 years.
Because registered accounts are excluded, your RRSP and TFSA do not attract departure tax simply because you leave — their treatment as a non-resident is a separate topic covered in our companion guide.
The forms: T1243 and T1161
You report the deemed disposition and calculate the resulting gain on Form T1243, Deemed Disposition of Property by an Emigrant of Canada. The CRA instructs you to complete it if you ceased to be a resident of Canada for income tax purposes in the year and were deemed to have disposed of certain properties on leaving.
Separately, if the total fair market value of all the property you owned when you left Canada was more than CAD 25,000, you must complete Form T1161, List of Properties by an Emigrant of Canada. Note that the T1161 threshold is based on nearly all property you owned — but certain items, such as cash and bank deposits, registered plans and personal-use property worth under CAD 10,000 each, are excluded from that list. Late-filing Form T1161 carries its own penalties, so file it on time even where no tax is due.
Deferring the tax with Form T1244
A deemed sale can leave you with a tax bill on gains you have not received in cash. To relieve this, you may elect under subsection 220(4.5) to defer payment of the departure tax on the deemed disposition until you actually sell the property. This is done on Form T1244, Election to Defer the Payment of Tax on Income Relating to the Deemed Disposition of Property. No interest accrues during the deferral, but for amounts above a set limit the CRA generally requires you to provide acceptable security. The deferral effectively lets you pay the tax when the asset is genuinely disposed of.
Canadian real estate and section 116
Canadian real property is deliberately left out of departure tax because Canada keeps the right to tax it on a future sale. When a non-resident later sells Canadian real estate, the buyer must withhold tax unless the CRA issues a certificate of compliance under section 116. You then file a Canadian return to report the actual gain and reconcile the tax. Keeping good records of your property’s cost base and fair market value at departure is essential for both the deemed disposition and any later real-estate sale.
When you actually become a non-resident
Departure tax only applies once you have genuinely ceased to be a resident of Canada for tax purposes. The CRA determines this from your residential ties — the most significant being a home in Canada available to you, a spouse or common-law partner, and dependants who remain in Canada. Secondary ties include Canadian bank accounts, a driving licence, provincial health coverage and memberships. Your date of departure is normally the latest of the day you leave, the day your spouse and dependants leave, or the day you become a resident of your new country. Because that date sets the valuation point for every deemed disposition, pin it down carefully and keep evidence of when your ties were severed.
Valuing your property and returning later
The gain on each asset is measured against its fair market value on your departure date, so obtain and retain contemporaneous valuations — brokerage statements, appraisals for art or jewellery, and exchange records for cryptoassets. If you later return to live in Canada, you may be able to unwind the deemed disposition on property you still hold, effectively reversing the earlier deemed sale so it is not double-taxed. This makes accurate departure-date records valuable even if you expect to come back one day.
Timing and your final return
Departure tax is reported on your final Canadian income tax return for the year you emigrate — a part-year return covering the period you were resident. That return, and payment of any balance owing, is normally due by 30 April of the year after you leave. Because valuations, T1161 reporting and the deferral election all have to line up, most emigrants benefit from professional cross-border tax advice before their departure date. This guide is general information, not tax advice.
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Frequently asked questions
What triggers Canada’s departure tax?
Ceasing to be a resident of Canada for tax purposes triggers a deemed disposition of most property at fair market value, which can create taxable capital gains, per Source.
Is my RRSP or TFSA hit by departure tax?
No. Registered plans such as RRSPs, RRIFs and TFSAs are excluded from the deemed disposition, per Source.
Do I pay departure tax on my Canadian home?
No. Canadian real property is excluded from departure tax and is instead taxed on a later sale through the section 116 process, per Source.
Which forms do I file?
Form T1243 to report the deemed disposition, and Form T1161 if your property’s total fair market value exceeded CAD 25,000, per Source.
Can I delay paying the departure tax?
Yes. You can elect on Form T1244 to defer payment, interest-free, until you actually sell the property, usually by posting security, per Source.
When is the departure tax due?
It is reported on your final part-year return for the year you leave, normally due by 30 April of the following year, per Source.
Sources
- CRA — Leaving Canada (emigrants)
- CRA — Dispositions of property for emigrants of Canada
- CRA — Guide T4056, Emigrants and Income Tax
- CRA — Form T1243, Deemed Disposition of Property by an Emigrant of Canada
- CRA — Form T1161, List of Properties by an Emigrant of Canada
- CRA — Form T1244, Election to Defer the Payment of Tax on Deemed Disposition
- CRA — Disposing of certain Canadian property (section 116)
- CRA — Individuals leaving or entering Canada and non-residents