Canada Departure Tax Calculator (Deemed Disposition)
Leaving Canada for good? The day you cut residency you're treated as having sold your non-exempt property at fair market value, and the gain is taxed on your final return. This sizes that deemed-disposition gain at the 50% inclusion rate, flags whether you must file Form T1161, and estimates any late-filing penalty and deferral security.
Gain, taxable half, and tax
Your gain, the taxable half at the 50% inclusion rate, and the estimated tax at your marginal rate.
Deemed-disposition breakdown
Line by line, from fair market value to the estimated tax and any T1161 penalty.
| Line item | Amount |
|---|
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.
Not a flat tax — graduated rates
Departure tax isn't a separate levy. The taxable gain is added to your income on the T1 and taxed at graduated federal + provincial rates, so estimated tax ≈ taxable gain × your marginal rate. Use your real marginal rate for the departure year. Source: CRA — Leaving Canada (emigrants).
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 (about $13,777.50 for former Quebec residents), adequate security must be posted. 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)); provincial/Quebec variation beyond the flagged security threshold; 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 (about $13,777.50 for former Quebec residents) you must post adequate security. The election deadline is April 30 of the year after you emigrate.