What Is the "Departure Tax" When You Leave Canada?

The deemed disposition of assets when you leave, which assets are included, and how to value them

Scott Tang, CPAUpdated 2026-11-052026 rules5 min read

On the day you stop being a Canadian tax resident, the tax law treats you as having sold most of your assets at their market value on that day. The resulting capital gains are taxed on your return for the year you leave — this is what's commonly called the "departure tax". You owe tax without having received any money, so if you hold a large stock portfolio or shares in a company, be sure to work out the numbers before you leave.

Deemed sold

On the day you leave, most assets are deemed sold at market value

50%

Half of the capital gain on the deemed sale is included in income for the year you leave

$25,000

If, leaving out the property the rules exclude, your assets are worth more than this when you leave, you must file a T1161 list of properties

Can be deferred

Elect on T1244 to defer payment; for large amounts, security is required

What's included and what isn't

Asset	Deemed sold when you leave Departure tax applies	Not deemed sold Dealt with when actually disposed of later
Shares and funds in a non-registered account	✓	—
Shares of a private corporation (Canadian or foreign)	✓	—
Real estate outside Canada	✓	—
Real estate in Canada (your home or a rental)	—	✓When you sell later, non-resident rules apply (section 116 clearance)
RRSP, RRIF, pensions	—	✓Non-resident tax is withheld when you take money out later
TFSA	—	✓You can keep it; contributions made while you are a non-resident are subject to a separate tax of 1% a month
RESP	—	✓You can keep it; whether contributions and grants are possible depends on the beneficiary's residency and the plan's terms
Property of a business still carried on through a permanent establishment (fixed place of business) in Canada after you leave	—	✓
Property a short-term resident owned before landing	—	✓If you lived in Canada for no more than 60 months in total in the 10 years before leaving, it is generally not included (see "Which Assets Are Not Deemed Sold When You Leave Canada?" in this series)

Shares and funds in a non-registered account

🔁 Deemed sold when you leave: ✓
🛡️ Not deemed sold: —

Shares of a private corporation (Canadian or foreign)

🔁 Deemed sold when you leave: ✓
🛡️ Not deemed sold: —

Real estate outside Canada

🔁 Deemed sold when you leave: ✓
🛡️ Not deemed sold: —

Real estate in Canada (your home or a rental)

🔁 Deemed sold when you leave: —
🛡️ Not deemed sold: ✓When you sell later, non-resident rules apply (section 116 clearance)

RRSP, RRIF, pensions

🔁 Deemed sold when you leave: —
🛡️ Not deemed sold: ✓Non-resident tax is withheld when you take money out later

TFSA

🔁 Deemed sold when you leave: —
🛡️ Not deemed sold: ✓You can keep it; contributions made while you are a non-resident are subject to a separate tax of 1% a month

RESP

🔁 Deemed sold when you leave: —
🛡️ Not deemed sold: ✓You can keep it; whether contributions and grants are possible depends on the beneficiary's residency and the plan's terms

Property of a business still carried on through a permanent establishment (fixed place of business) in Canada after you leave

🔁 Deemed sold when you leave: —
🛡️ Not deemed sold: ✓

Property a short-term resident owned before landing

🔁 Deemed sold when you leave: —
🛡️ Not deemed sold: ✓If you lived in Canada for no more than 60 months in total in the 10 years before leaving, it is generally not included (see "Which Assets Are Not Deemed Sold When You Leave Canada?" in this series)

How it's calculated

1
Set the departure date
The day your ties are cut and you move away
2
Value each asset
The market value of each asset on the day you leave
3
Subtract the cost
Deemed gain = market value − cost
4
Include half in income
Taxed together with your income before you leave
5
Elect to defer
Use T1244, with security if required

Example: you hold shares of a private corporation with a cost of $100,000. On the day you leave, they are valued at $2.1 million, so the deemed gain is $2 million, and half of that, $1 million, is included in your income for the year you leave — the tax could be several hundred thousand dollars, even though you haven't sold a single share.

Forms to file

Item	T1243	T1161	T1244
What it's for	Calculating the gain or loss on deemed dispositions	Listing the properties you own when you leave	Electing to defer payment of the departure tax
Who files	Anyone with assets deemed sold	Anyone whose assets are worth more than $25,000 when they leave (excluding cash, registered plans such as RRSPs, certain property of short-term residents, personal-use items worth less than $10,000 each, etc.)	Anyone who wants to defer payment
If filed late	Filed with your return	$25 a day, minimum $100, maximum $2,500	If you don't file it, you can't defer

If you defer with T1244, you must make the election by April 30 of the following year. If the federal tax on the deemed dispositions is more than $16,500, you must provide security acceptable to the CRA (it may also be needed for provincial tax), in an amount agreed with the CRA.

Points to watch

Valuations need support
For private company shares and real estate outside Canada, we recommend a valuation report for the market value on departure. You'll also need it when you actually sell later, or when you file in your new country.
How your new country sees it
Whether your cost in the new country is the market value on departure depends on that country's rules. You could be taxed twice, and the treaty can sometimes help.
Losses can be used too
Losses from deemed dispositions can offset gains from deemed dispositions; you can also elect to have Canadian real estate deemed sold as well, to provide an offset.
Coming back allows adjustments
If you leave and later return, you can, if you qualify, elect to "unwind" part of the departure tax; see "Coming Back: Becoming a Canadian Resident Again" in this series.

How Sheng Qian CPA can help

Estimate before you leave
We list your assets, estimate the departure tax, and compare the results of different departure dates, and of selling first versus a deemed disposition.
Deferral and security
We assess whether to defer with T1244 and how to prepare the security.
Departure-year filing
T1243, T1161, T1244 and the return for the year you leave, done together. For prices, see "What Sheng Qian CPA Can Do for Newcomers and People Leaving Canada: Support on Arrival and on Departure" in this series.

Sources

CRA: Emigrants and income tax · Dispositions of property for emigrants of Canada
CRA: Form T1161 · Form T1243 · Form T1244

Disclaimer

This article is general information only and is not tax advice. Every person's situation is different; please consult a CPA about your specific arrangements, and a qualified local adviser about tax matters in your new country. Service fees are as set out in our written quote.