Coming Back: Becoming a Canadian Resident Again

The cost base of your assets when you return, and how your earlier departure is treated

Scott Tang, CPAUpdated 2026-11-052026 rules4 min read

You left Canada for a few years and now you've come back. For tax purposes, you become a resident again on the day you return, much like when you first landed: most assets get a new cost base equal to their market value on the day you return. But two things are different: for assets on which you paid departure tax when you left, you can elect to "unwind" it if you meet the conditions; and the first-year T1135 exemption generally can't be used again.

The day you return

You become a resident again; most assets take that day's market value as their cost

Can be adjusted

For assets deemed sold when you left and held until you return, you can elect to reduce the original departure disposition

No first-year exemption

The T1135 exemption for the year you "first become resident" generally no longer applies

Reapply for benefits

The Canada Child Benefit and other benefits have to be applied for again

How your assets are treated when you return

Asset	On return how the cost is set	Watch for
Assets bought abroad after you left	✓Market value on the day you return	—Same as when you first landed; keep the valuations
Assets taxed on departure and held until you return	◐Market value on return; if you elect the adjustment, the cost is reduced by the elected amount at the same time	—Compare the refund now with the tax later before deciding
Your Canadian home (not deemed sold when you left)	✕Cost unchanged	—Years as a non-resident generally can't count as principal residence years
RRSP, TFSA	✕Not affected	—TFSA room starts building up again from the year you return

Assets bought abroad after you left

🔁 On return: ✓Market value on the day you return
💡 Watch for: —Same as when you first landed; keep the valuations

Assets taxed on departure and held until you return

🔁 On return: ◐Market value on return; if you elect the adjustment, the cost is reduced by the elected amount at the same time
💡 Watch for: —Compare the refund now with the tax later before deciding

Your Canadian home (not deemed sold when you left)

🔁 On return: ✕Cost unchanged
💡 Watch for: —Years as a non-resident generally can't count as principal residence years

RRSP, TFSA

🔁 On return: ✕Not affected
💡 Watch for: —TFSA room starts building up again from the year you return

Electing to "unwind" the departure disposition: how the numbers change

Suppose you have held a stock all along (not taxable Canadian property): its cost before you left was $200,000, and its market value when you left was $1 million. The amount you elect reduces both the original proceeds of the departure disposition and your cost on return; it is limited to the lowest of the gain on departure, the market value on return and the amount you choose.

Item	No election	Elect to reduce by $800,000
Original departure proceeds	$1 million	$200,000 (the departure gain becomes 0)
Market value on return of $900,000: cost on return	$900,000	$100,000
Market value on return of $1.5 million: cost on return	$1.5 million	$700,000

Whether to elect, and for how much, means comparing the tax adjustment for the year you left with the tax when you actually sell in the future. Taxable Canadian property has its own rules. The election has to be made in writing by the filing deadline for the year you return, listing the assets and their market values.

What to do in the year you return

1
Fix your return date
The day you re-establish residential ties
2
Value your assets
Market value on the day you return
3
Review departure assets
Whether to elect the adjustment
4
Part-year return
Worldwide income after you return
5
Reapply for benefits
Canada Child Benefit, CGEB

Points to watch

The T1135 applies from the year you return
If you have been a Canadian resident before, you generally can't use the first-year exemption again; if your foreign property is over C$100,000 in the year you return, you have to report it.
Principal residence status of your Canadian home
The years you were away generally can't be designated as principal residence years; when you sell later, the calculation is done year by year.
RRSP room
You only get new room if you have earned income as defined; room left over from before you left is generally still there.
Deal with the country you're leaving too
You may also face "departure" tax rules in the other country; the timing on both sides needs to line up.

How Sheng Qian CPA can help

Planning before you return
We run the numbers first on your return date, asset valuations and whether to unwind the departure tax.
Getting the year of return right
The part-year return, the unwinding election and the T1135, handled together.
Benefits and accounts back on track
The Canada Child Benefit, CGEB and TFSA room restarted. 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

Disclaimer

This article is general information only and is not tax advice. Everyone's situation is different; please consult a CPA about your specific arrangements. Service fees are as set out in our written quote.