Updated Checked by the Tax-Services.ca editorial team How we check
Canada’s exit tax isn’t a fee for leaving. It’s a capital gains tax on things you own, charged as though you sold them the day you left. The CRA calls it a deemed disposition, and the rule treats you as having sold certain property at fair market value and bought it straight back for the same amount. You don’t get a cheque for that pretend sale, but the tax is real.
Who has to deal with the Canada exit tax?
You count as an emigrant if you leave Canada to live in another country and cut your main ties here. Selling or giving up your home and establishing a permanent home abroad points that way, and so does a spouse or dependants leaving with you. Your departure date is the latest of the day you leave, the day your spouse and dependants leave, and the day you become resident of the new country.
Picture Priya, a software developer in Toronto who takes a job in Dublin, sells her condo and moves her partner and daughter with her. She’s an emigrant. A student who spends a year abroad and keeps her parents’ basement, her bank accounts and her health card is a different story, and the CRA may still see her as a resident.
For the year you leave, you file using the package for the province or territory where you lived on your departure date. That’s easy to miss.
What is taxed and what is left alone
Only some property is deemed sold. The CRA lists four groups that are excluded, and most people’s biggest assets fall in them.
| Left out of the deemed sale | Examples given by the CRA |
|---|---|
| Canadian real property and resource property | A house or land in Canada, timber resource property |
| Canadian business property | Assets of a business run through a permanent establishment |
| Registered plans | RRSPs, RRIFs, TFSAs, RESPs, RDSPs |
| Property owned when you last became resident | Applies if your residency in the ten years before leaving added up to five years or less |
Property outside those four groups is deemed sold, and that can include investments you hold outside registered plans. A house in Canada isn’t in the deemed sale. Neither is your RRSP. Shares in a regular brokerage account are the classic example of what does get caught, since the gain on paper can be large even though you never clicked sell.
A worked example on $50,000 of gains
Say you’re an Ontario resident on a $90,000 salary, holding shares that have gained $50,000. At the 50% inclusion rate our capital gains tax calculator uses, $25,000 lands on your return. The income tax calculator shows $7,859.63 of extra federal and Ontario tax, about 15.7% of the gain. That’s a ballpark, not a quote.
The gain sits on top of your other income, so it’s taxed at your higher steps. Want to see what the same gain does at another salary? Try the marginal tax rate calculator.
Forms, limits and the deferral option
Form T1243 reports the gains and losses from the deemed disposition. If the fair market value of everything you owned when you left was more than $25,000, you also complete T1161, the list of properties. A late T1161 is fined per day, at $25, but the CRA floors the total at $100 and caps it at $2,500.
Can you delay the bill? Yes. Form T1244 lets you defer payment of the tax without interest, and the CRA gives April 30 following emigration as the deadline for the election. Where the federal tax is more than $16,500 ($13,777.50 for former Quebec residents), you have to put up security.
Coming back changes things. Returning residents can ask to adjust the earlier deemed sale on or before the filing due date for the year they became resident again.
Do you owe the tax if you never sold anything?
Yes, if the property is in the deemed sale and the gain is positive. Nothing has to change hands. The flip side is that a loss on the deemed sale can be reported too, so check each property rather than only the winners.
If cash is tight, that’s what the deferral form is for. The tax waits, and so does the interest, until you actually sell or until another trigger in the rules applies.
Mistakes that cost people money
The biggest is assuming that only property sold counts. Nothing has to be sold. Another is treating the RRSP as a loophole, since leaving doesn’t trigger tax on it, though withdrawals later are their own matter that the RRSP withdrawal tax calculator can estimate. And a few people assume their new country’s tax cancels the Canadian one. We couldn’t check any treaty rules, so ask the CRA or a cross-border accountant about that part. Keep your records of what each holding cost you, because the CRA will want the starting number.
Where we got these figures
Every rule, form and dollar limit above is from the Canada Revenue Agency pages on leaving Canada and on dispositions of property for emigrants, read in September 2026. The tax example is our own estimate for a single Ontario employee. This site is independent and has no government link.
Frequently asked questions
Is there really an exit tax in Canada?
Yes, though the CRA calls it a deemed disposition on emigration. You're treated as having sold certain property at fair market value when you left.
Do I pay exit tax on my RRSP?
No. Registered plans such as RRSPs, RRIFs and TFSAs are excluded from the deemed sale. Later withdrawals are taxed under their own rules.
Does my Canadian house trigger it?
No. Canadian real property is excluded from the deemed disposition.
Which forms do I file?
T1243 reports the gains, and T1161 lists your properties if their total fair market value is more than $25,000. T1244 is the election to defer payment.
Can I defer the tax?
Yes, with Form T1244. The CRA requires security if the federal tax owing is more than $16,500.
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