Canada Departure Tax Calculator (Deemed Disposition)
The day you cut Canadian residency you're treated as having sold your non-exempt property at fair market value, and the gain is taxed on your final return. Size that deemed-disposition gain at the 50% inclusion rate, price it at your province's 2026 tax brackets, check whether you must file Form T1161, and see any late-filing penalty and deferral security.
Where your deemed gain lands in the tax brackets
The combined federal and provincial rate on each dollar of taxable income. Your taxable gain stacks on top of your other income, so a large gain climbs into higher brackets than a single marginal rate suggests.
If you defer: federal tax against the security threshold
If you elect to defer the tax with Form T1244, the CRA asks for adequate security once federal tax on the gain is over $16,500 ($13,777.50 for Quebec residents).
Gain, taxable half, and tax
Your gain, the taxable half at the 50% inclusion rate, and the estimated tax split into its federal and provincial parts.
Deemed-disposition breakdown
Line by line, from fair market value to the estimated tax and any T1161 penalty.
| Line item | Amount |
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How this is calculated
Deemed disposition on emigration (ITA s.128.1(4))
When you cease to be a resident of Canada, you're deemed to have disposed of most property at fair market value on the emigration date and to have immediately reacquired it at the same value. For each non-exempt capital property the gain is capital gain = FMV at departure − ACB (losses are allowed too). Source: CRA: Dispositions of property for emigrants of Canada.
Inclusion rate: 1/2 (50%)
The taxable portion is taxable capital gain = net capital gain × 0.50. The proposed increase to 2/3 was deferred (Jan 31, 2025) then cancelled on March 21, 2025 and never took effect, so there is no 66.67% rate and no $250,000 two-tier threshold. Source: Prime Minister of Canada: press release, March 21, 2025.
Graduated rates, not a flat tax
Departure tax isn't a separate levy. The taxable gain is added to your departure-year income on the T1 and taxed at graduated federal and provincial rates. In the default Tax brackets view this page prices it bracket by bracket: tax on the gain = income tax(other income + taxable gain) − income tax(other income), using the same 2026 engine as the income tax calculator, with the federal and provincial brackets, the basic personal amounts (including the federal phase-out, Manitoba's clawback and Yukon's match), Ontario's surtax and health premium, and Quebec's 16.5% federal abatement. The province is the one you live in on the day you leave. Other income means what goes on that same return: your income up to the day you leave (plus any Canadian employment or business income after it), not a full year's salary if you leave partway through. It is treated as employment income: the enhanced CPP or QPP contributions on it are deducted (and in Quebec, the deduction for workers), so your taxable income before the gain is a little under it, and CPP, EI and QPIP depend only on it, so they are the same with or without the gain and drop out. The One marginal rate view keeps the shortcut taxable gain × your marginal rate, which misses any part of a large gain that climbs into higher brackets. Source: CRA: Leaving Canada (emigrants).
Where your deemed gain lands in the brackets
The step chart plots the combined marginal rate on each dollar of taxable income, from $0 to a little past your income with the gain. Each step is the tax added across its slice of income divided by the slice's width, so a slice that straddles a bracket edge reads in between. Below your other income the curve keeps your return's credits (the basic personal amounts, plus the payroll and Canada Employment Amount credits that come with your other income) and lowers only the taxable income, so it shows the brackets that income already fills, at your return's own rates. The shaded span is your taxable gain stacked on top, priced by the same return as the headline estimate. The markers give the rate on the first and the last $100 of the gain, and the dashed line is the average across all of it: average = tax on the gain ÷ taxable gain. The gap between the first-dollar rate (your marginal rate before the gain) and that average is what a single marginal rate gets wrong. In Ontario, narrow spikes mark where the health premium phases in.
Exempt / excluded property
Not everything is caught. Exempt categories include: Canadian real or immovable property, resource and timber property; Canadian business property carried on through a permanent establishment; registered / "excluded rights" (RRSP, RRIF, TFSA, RESP, RDSP, pensions, annuities and more per ITA s.128.1(10)); and, for short-term residents (resident 60 months or less in the prior 10 years), property owned before arriving. Full legal list: Income Tax Act s.128.1. The deemed gain is reported via Form T1243, carried to Schedule 3.
Form T1161 (list of properties) and its penalty
If the FMV of all property you owned at emigration exceeded $25,000 you must file Form T1161 (cash, registered plans and personal-use property under $10,000 are excluded from the list). It's due even if no return is otherwise required. Late filing: penalty = clamp($25 × days late, $100, $2,500). Source: CRA: Dispositions of property for emigrants of Canada.
Deferring the tax (Form T1244) and security
You can elect under ITA s.220(4.5) to defer paying the tax, interest-free, until you actually sell the property (Form T1244, deadline April 30 of the year after emigration). If the federal tax on the deemed-disposition income exceeds $16,500 ($13,777.50 for residents of Quebec, which is $16,500 less Quebec's 16.5% federal abatement), adequate security must be posted. The meter compares your estimated federal tax on the gain with that threshold, after the abatement for Quebec residents, so both sides are measured the same way, and the bar chart splits the estimate into its federal and provincial (or territorial) parts. In the one-rate view, enter the federal rate before any abatement; the page applies it. The combined rate should include the federal one, so if the federal tax alone comes out above the whole estimate the page asks you to check the two rates: the estimate then uses the combined rate and the security test the federal rate. A separate election, Form T2061A, lets you deliberately include otherwise-exempt Canadian real or business property. Source: CRA: Leaving Canada (emigrants).
What this does not model
Residency determination itself (fact- and treaty-based); the destination-country side (the US does not automatically recognize the Canadian FMV step-up, creating double-tax risk that may need a treaty election, e.g. Canada-US Treaty Art. XIII(7)); personal credits prorated to the days you were resident (ITA s.118.91), which can make the real tax on the gain higher when your other income is low; the alternative minimum tax, which since 2024 counts all of a capital gain rather than half: on a deemed gain of several hundred thousand dollars or more, especially with little other income, it can come to more than the regular federal tax shown here; other credits and deductions on your return, and other income types such as pension or dividends; using a capital loss against other gains; foreign tax credits, withholding, and trusts; and the full mechanics and security valuation of the T2061A / T1244 elections. This is a planning estimate. See a cross-border or tax professional.
Common questions
What is Canada's departure tax?
When you stop being a resident of Canada you are deemed under Income Tax Act section 128.1(4) to have sold most of your property at its fair market value on the day you leave, and to have immediately reacquired it at that value. Any resulting capital gain is reported on your departure-year return and taxed like any other capital gain. It is not a separate flat tax, and it does not apply to Canadian real estate or registered plans.
What is the capital gains inclusion rate for departure tax in 2026?
One half (50%). The federal government proposed raising it to two thirds on gains over $250,000, but that increase was first deferred on January 31, 2025 and then cancelled outright on March 21, 2025. It never came into force, so half of your deemed capital gain is taxable, with no $250,000 two-tier threshold.
Which assets are exempt from the deemed disposition on emigration?
Canadian real or immovable property, Canadian resource and timber property; Canadian business property carried on through a permanent establishment in Canada; and registered or 'excluded' rights such as RRSPs, RRIFs, TFSAs, RESPs, RDSPs, pensions and annuities. Short-term residents (resident 60 months or less in the prior 10 years) can also exempt property they owned before arriving. Everything else, like a non-registered stock portfolio, is caught.
Do I have to file Form T1161 when I leave Canada?
Yes, if the total fair market value of all property you owned when you emigrated was more than $25,000 (cash, registered plans, and personal-use property worth under $10,000 are excluded from the list). T1161 must be filed by your return's due date even if no tax is owing, and late filing costs $25 a day, minimum $100 and maximum $2,500.
Can I defer paying the departure tax?
Yes. Form T1244 lets you elect, under ITA s.220(4.5), to defer paying the tax on the deemed disposition (interest-free) until you actually sell the property, regardless of amount. If the federal tax on that income exceeds $16,500 ($13,777.50 for Quebec residents, whose federal tax is 16.5% lower after the Quebec abatement) you must post adequate security. The election deadline is April 30 of the year after you emigrate.