Question 1

What is departure tax in Canada?

Accepted Answer

Departure tax is a deemed disposition tax that applies when you leave Canada. The CRA treats you as if you sold most of your assets at fair market value on the day you leave, which may trigger capital gains tax on your final Canadian return.

Question 2

Is departure tax the same as Canada's exit tax?

Accepted Answer

Yes. “Departure tax” and “exit tax” are two names for the same thing: the deemed disposition rules that apply when you cease to be a Canadian tax resident. This calculator estimates that tax.

Question 3

Who needs to pay departure tax when leaving Canada?

Accepted Answer

Anyone who ceases to be a Canadian tax resident and owns assets with accrued capital gains may be subject to departure tax. This includes investments, real estate (other than your principal residence), and business interests.

Question 4

Can I reduce or defer the departure tax?

Accepted Answer

You can elect to defer payment until the assets are actually sold by posting security with the CRA (Form T1244) — no interest applies while the deferral is in place. Timing your departure, realizing capital losses, and the principal residence exemption can also reduce the bill. Speak to a cross-border tax professional before you move.

Question 5

What is the Section 216 election?

Accepted Answer

Section 216 allows non-residents earning Canadian rental income to elect to file a Canadian tax return and pay tax on net rental income instead of the 25% withholding tax on gross rent.

Question 6

What is the Section 217 election?

Accepted Answer

Section 217 allows non-residents receiving certain Canadian pension and benefit income to elect to pay tax at graduated rates instead of the flat 25% withholding tax.

Canada Departure Tax Calculator

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Departure tax FAQ

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Canada Departure Tax Calculator

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Departure tax FAQ