Key takeaways
- You stop being a resident on the latest of: the day you leave, the day your spouse and children leave, or the day you become resident somewhere else
- Your final return covers world income up to that date; after it, Canada taxes only Canadian-source income
- Departure tax applies only to gains on some assets, like non-registered shares. Canadian real estate, RRSPs and TFSAs are exempt
- Non-residents usually pay a flat 25% withholding tax on Canadian pensions, dividends and rent, often lower under a tax treaty
- You lose the Canada child benefit and the Canada Groceries and Essentials Benefit when you leave
Who this guide is for
Who this page is for: people who live in Canada now and plan to move abroad for good or for several years. That includes newcomers going back to their home country, Canadians moving to the US or elsewhere, and retirees moving abroad. If you will only travel for a few months, you probably stay a resident and most of this does not apply.
This is the starting page for our leaving Canada section. Each step below links to a detailed guide or calculator. The rules are federal (Canada Revenue Agency, or CRA, and Service Canada), so they apply in every province, except where we say Quebec is different.
When do you stop being a Canadian resident for tax?
Canada taxes people based on residency, not citizenship. You can be a Canadian citizen and a non-resident for tax. You can also be a permanent resident (PR) and a non-resident for tax at the same time.
The CRA looks at your residential ties. The significant ties are:
- a home in Canada (owned or rented and kept available to you)
- a spouse or common-law partner in Canada
- dependants (such as children) in Canada
Secondary ties also count: a car, furniture, bank accounts, credit cards, a provincial driver’s licence and health card.
The CRA says you become a non-resident on the latest of these dates: the day you leave Canada, the day your spouse or partner and dependants leave, or the day you become a resident of your new country. If you keep a home that is available to you, or your family stays behind, you may still be a resident (a “factual resident”) and owe tax on your world income.
If you are unsure, you can ask the CRA for an opinion with Form NR73. Our tax residency checker walks through the ties.
Your final (departure) tax return
You file a normal T1 return for the year you leave, by the usual deadline (April 30 of the next year, or June 15 if you or your spouse are self-employed; any balance is still due April 30). On it you:
- write your departure date on the first page
- report world income from January 1 to your departure date
- report only certain Canadian-source income after that date
- claim non-refundable credits, some of them reduced for the part of the year you were not resident
- report the deemed sale of property (departure tax), if any
You must also tell your Canadian banks, brokerages and other payers that you are now a non-resident, so they apply the right withholding tax. Use our part-year tax estimator for a rough idea of the final bill.
Departure tax: what it is and what is exempt
When you leave, the CRA treats you as if you sold certain property at its fair market value (FMV) on your departure day and bought it back. This is called a deemed disposition. It is often called the “exit tax”. You pay tax only on the gain, and only half of a capital gain is taxable.
Not included: Canadian real estate, Canadian business property, registered plans such as the RRSP, RRIF, TFSA, RESP and RDSP, and (for short-term residents) property you owned when you arrived if you lived in Canada 60 months or less in the last 10 years.
So for most people, departure tax is about non-registered investments: shares, ETFs and mutual funds in a taxable account, crypto, foreign real estate and private company shares. If the total value of your property is more than $25,000, you must also file Form T1161 (a list of your property), even if you owe nothing.
Read the full departure tax guide or estimate your amount with the departure tax calculator.
How Canada taxes you after you leave
As a non-resident, most Canadian income is taxed by Part XIII withholding: the payer keeps a flat 25% and sends it to the CRA. A tax treaty between Canada and your new country can lower the rate. This applies to:
- dividends from Canadian companies
- rent from Canadian property (25% of the gross rent, unless you use a section 216 election)
- pensions, RRSP and RRIF withdrawals, CPP and OAS
Ordinary interest paid by a Canadian bank is generally exempt. Employment income for work done in Canada, and gains on selling Canadian real estate, are taxed differently: you file a Canadian return for them.
Try the non-resident withholding tax calculator. If you plan to keep or sell your home, see keep or sell your home and the section 116 guide.
RRSP, TFSA and FHSA when you leave
| Account | Can you keep it? | Main rule as a non-resident |
|---|---|---|
| RRSP / RRIF | Yes | Grows tax-deferred in Canada. Withdrawals face 25% withholding (lower for some periodic payments under a treaty). Not hit by departure tax. |
| TFSA | Yes | No Canadian tax on growth or withdrawals. Do not contribute: 1% tax per month on contributions made while non-resident. No new room for full non-resident years. |
| FHSA | Yes | You cannot make a qualifying (tax-free) home withdrawal while non-resident. Taxable withdrawals face 25% withholding. |
| Home Buyers’ Plan balance | Repay | Repay within 60 days of leaving (or before you file), or the balance is added to your income. |
Your new country may tax these accounts differently. The US, for example, does not treat a TFSA as tax-free. See TFSA after leaving Canada.
Benefits and pensions: what stops and what continues
- Canada child benefit (CCB) and the Canada Groceries and Essentials Benefit (formerly the GST/HST credit): stop when you become a non-resident. Tell the CRA your departure date so you do not have to repay.
- CPP: you can receive it anywhere in the world, with non-resident tax withheld unless a treaty says otherwise.
- OAS: paid abroad only if you lived in Canada at least 20 years after age 18, or reach 20 with time in a country that has a social security agreement with Canada. Check with the OAS abroad checker.
- Guaranteed Income Supplement (GIS): stops after more than 6 months outside Canada.
- Employment Insurance (EI): regular benefits can be paid outside Canada only if you live in the US; elsewhere only special benefits such as maternity or parental.
PR, citizenship and coming back
If you are a permanent resident, leaving does not cancel your status on its own. But you must be physically present in Canada for 730 days in any 5-year period to keep it. Read will I lose my PR if I leave? and count your days with the PR residency calculator.
Provincial health coverage usually ends soon after you leave, so plan private cover: see health insurance when leaving Canada. If you may come back, keep records of your departure values. The returning to Canada checklist explains how to unwind departure tax and restart benefits.
A simple order of steps
- Decide your departure date and check your residential ties.
- List your assets with their cost and current value (for departure tax and T1161).
- Decide what to do with your home, car and accounts. Make any FHSA home withdrawal and HBP repayment before you leave.
- Tell your bank, brokerage, pension plans, Service Canada and the CRA about your new address and non-resident status.
- Buy health insurance for the gap before your new country’s cover starts.
- File your final return by the deadline, with T1161, T1243 and T1244 if needed.
Use the full leaving Canada checklist to track each step.