Key takeaways
- Sell before you leave: no section 116, and the gain on your home is usually fully tax-free
- Keep and rent: the tenant or your agent withholds 25% of gross rent unless you file Form NR6
- Each year you own the home as a non-resident makes part of the later gain taxable
- Your new country may also tax the rent and the gain
- Small changes in home prices often decide the result, so test a few scenarios
Option 1: sell before you leave
If the sale closes while you are still a resident of Canada, it is a normal sale. If the home was your principal residence every year you owned it, the whole gain is usually tax-free. There is no section 116 certificate and no holdback.
The trade-off: you give up future price growth and rent, and you may sell in a hurry. Plan the listing date so the sale closes before your departure date. Your departure date for tax is usually the latest of the day you leave, the day your family leaves, and the day you become resident somewhere else (CRA).
Option 2: keep it and rent it out
As a non-resident landlord, Canada taxes your rent:
- By default, your tenant or agent must withhold 25% of the gross rent and send it to the CRA by the 15th of the next month.
- If you file Form NR6 before the year starts (or before the first rent payment), your agent can withhold 25% of the net rent instead. You must then file a section 216 return (by June 30 of the next year) and pay tax at normal rates on net rent.
- Without NR6 you can still choose to file a section 216 return within 2 years to get back part of the 25%.
When you later sell, section 116 applies, and the principal residence exemption covers only your resident years. See the section 116 calculator.
How the calculator compares them
For "sell now", it takes today’s value minus selling costs and grows that money at the return you enter. For "keep", it adds up rent after Canadian tax for each year, grows the home value, takes off selling costs, and taxes the part of the gain that is no longer exempt. Half of that gain is taxable, at the tax rate you enter.
It leaves out mortgage principal (you own that equity either way), rent increases, empty months, currency changes and tax in your new country. Keep these in mind: a mortgage often must be renewed with a lender that serves non-residents, and some lenders do not.
Worked example
With the default values, a home worth $800,000 bought in 2015 and kept for 5 years after leaving in 2026: the owner gets 12 resident years plus one out of 17 owned years exempt (13 ÷ 17 = 76%). About 24% of the gain is taxable later. Net rent of $1,600 a month is taxed at 30% with NR6. Change the growth rate from 3% to 1% and see how quickly the answer moves.
Things the numbers do not show
- Time and stress: managing a rental from another time zone usually means paying a property manager.
- Coming back: if you might return within a few years, keeping a home can make sense.
- Tax at home and abroad: your new country may tax the rent and the gain. A tax treaty usually gives credits, but not always for the full amount.
- Ties: keeping a home you could live in can be a residential tie that makes the CRA see you as still resident. Renting it to an arm’s-length tenant on a long lease helps. Check with the tax residency checker.
This tool gives an estimate for planning. It is not tax advice. Rules for non-residents are complex, so have a cross-border accountant check your numbers before you sign a sale or leave Canada.