Departure Tax Calculator (Canada)
Estimate the deemed-disposition tax on emigration under ITA s.128.1(4). Excludes RRSP, principal residence, and Canadian real property from the deemed disposition.
Your departure tax calculator
$17,128 departure tax
Marginal rate 31.1% on 50% taxable capital gain inclusion.
| Total asset FMV | $170,000 |
| Total realized gain (taxable-cap-property only) | $110,000 |
| Taxable capital gain (50%) | $55,000 |
| Federal + provincial tax | $17,128 |
What triggers departure tax
Departure tax under ITA s.128.1(4) is triggered the moment you cease to be a Canadian tax resident. Residency is determined by primary and secondary ties (home, spouse, dependents, driver's licence, health card, vehicle registration). Tax residency does not automatically follow physical move dates — many Canadians establishing residency abroad retain enough ties to remain Canadian residents.
Excluded categories
Five categories are excluded from the deemed disposition:
- • Canadian real property — taxed only when actually sold, regardless of when
- • Business assets used in a Canadian permanent establishment
- • RRSP, RRIF, and similar deferred plans — tax deferred until withdrawal; withholding at non-resident rate
- • Principal residence — the PR exemption continues to apply for the period of Canadian residency
- • Personal-use property under $1,000 — de minimis
Forms triggered on departure
Three forms commonly file with your year-of-departure T1:
- • Form T1161 — list of properties owned at departure with FMV exceeding $25,000 in aggregate
- • Form T1243 — deemed disposition of taxable Canadian property
- • Form T1244 — election to defer payment of the departure tax by posting acceptable security; useful when liquidity is constrained
Frequently asked questions
What is departure tax in Canada?
When you cease to be a Canadian tax resident, ITA s.128.1(4) deems you to have disposed of most of your assets at fair market value on the day you leave. The resulting capital gains are 50% taxable in your year-of-departure return at your full Canadian marginal rate. Canadian real property, RRSP/RRIF balances, principal residence, and personal-use property under $1,000 are excluded from the deemed disposition.
Do I need to file Form T1161 and T1243?
Form T1161 (list of properties) is required when the aggregate FMV of your reportable property exceeds CAD 25,000 on departure. Form T1243 (deemed disposition of property) is required whenever any taxable Canadian property is deemed disposed under s.128.1(4). Both are filed with your final Canadian T1 for the year of departure. Form T1244 lets you elect to defer payment of the departure tax by posting acceptable security (e.g., a bank letter of credit).
What happens to my RRSP when I leave Canada?
Your RRSP is NOT subject to the s.128.1(4) deemed disposition. The plan stays Canadian-resident; tax is deferred until withdrawal. When you eventually withdraw, the financial institution withholds Canadian non-resident tax (25% by default, reduced under treaty for many countries — 15% for US residents under the Canada-US treaty). You may also owe US income tax on the withdrawal, with foreign tax credit available for the Canadian withholding.
Related decisions
If you hold QSBC shares at departure, the Lifetime Capital Gains Exemption Calculator tells you how much of the deemed gain is exempt under s.110.6. If you are leaving for the US specifically, see the US Citizens in Canada Calculator and the Snowbird SPT Calculator for the US-side implications.