To declare non-resident status in Canada, you cut your residential ties to the country, file a final T1 return that shows your date of departure, settle the departure tax on any unrealized capital gains, and notify Canadian payers so they begin applying non-resident withholding on anything you still earn here. It isn’t an immigration step and there’s no single form that flips a switch; the Canada Revenue Agency decides your residency by looking at your overall situation, and your departure return is what makes the change official.
Qualifying as a Non-Resident in the CRA’s Eyes
The CRA doesn’t accept a declaration on its own. It looks at your ties to Canada and judges whether you’ve actually left. The ties that matter most, called significant residential ties, are a home available for your use in Canada, a spouse or common-law partner who stays behind, and dependants who remain in the country. Keeping even one of these three is usually enough for the CRA to continue treating you as a resident no matter where you physically live.1Canada Revenue Agency (CRA). Income Tax Folio S5-F1-C1, Determining an Individual’s Residence Status
Secondary ties are weighed collectively. Personal property kept in Canada, a provincial driver’s licence, provincial health coverage, Canadian bank accounts and credit cards, and memberships in Canadian clubs or religious organizations all count. No single secondary tie decides anything, but enough of them together can convince the CRA you never really left.2Canada Revenue Agency. Determining Your Residency Status
The 183-Day Rule
Spending too much time in Canada can pull you back in as a deemed resident even if you’ve cut your ties. Stay 183 days or more in a tax year and you’re taxed as a resident. Each day or partial day counts, including university days, work days, and vacation days. The one carve-out is for people who live in the United States and commute to work in Canada; those commuting days don’t count toward the total.3Canada Revenue Agency. Deemed Residents of Canada
When a Tax Treaty Decides
If you keep significant ties in Canada but build strong enough ties in a country that also considers you a tax resident, and Canada has a tax treaty with that country, the treaty’s tie-breaker rules decide which country wins. If the treaty assigns you to the other country, you become a deemed non-resident of Canada and are taxed the same way as any other non-resident.4Canada Revenue Agency (CRA). Factual Residents – Temporarily Outside of Canada
Asking the CRA for an Opinion
You can file Form NR73, Determination of Residency Status (Leaving Canada), to ask the CRA how it views your situation. It asks detailed questions about family, housing, employment, and financial accounts. The form is optional and the CRA’s answer isn’t legally binding in a dispute, but it tells you where you stand before you file.5Canada Revenue Agency (CRA). NR73 Determination of Residency Status (Leaving Canada)
Filing the Departure Return
The formal act of becoming a non-resident is filing a T1 return for the year you leave with your departure date written in the Residence Information area on page one. That date splits your tax year in two: you report worldwide income up to the departure date and only Canadian-source income after it.6Canada Revenue Agency. Leaving Canada (Emigrants)
The deadline is the usual one, typically April 30 of the following year. If you don’t owe tax, filing isn’t strictly required, but you should still tell the CRA when you left as soon as possible. Stay silent and the CRA may keep treating you as a resident and expect returns on your worldwide income.
Notify your Canadian banks, brokerages, and anyone else who pays you from Canada that you’ve become a non-resident. They need the information to apply the correct withholding rates on your Canadian-source income. If they don’t know you’ve left, the wrong amount gets withheld.6Canada Revenue Agency. Leaving Canada (Emigrants)
The Departure Tax on Your Property
This is the part that catches people out. On your departure date, the CRA treats you as having sold most of your property at fair market value even though no money changed hands. Any unrealized gains become taxable on your final return. It’s called a deemed disposition, and it exists so Canada collects tax on gains that built up while you were a resident.7Canada.ca. Dispositions of Property for Emigrants of Canada
As of January 1, 2026, the capital gains inclusion rate is one-half on the first $250,000 of capital gains an individual realizes in a year, and two-thirds on anything above that.8Government of Canada. Government of Canada Announces Deferral in Implementation of Change to Capital Gains Inclusion Rate For someone leaving with a sizeable non-registered portfolio of appreciated holdings, departure day can produce a serious tax bill.
What’s Not Deemed Disposed
Some property is left alone. Canadian real property, property used in a Canadian business carried on through a permanent establishment, and registered accounts like RRSPs and RRIFs are all exempt from the deemed disposition. They remain inside Canada’s tax system after you go, so the CRA doesn’t need to tax them on your way out.7Canada.ca. Dispositions of Property for Emigrants of Canada
The Forms You File
Report your deemed disposition gains or losses on Form T1243, Deemed Disposition of Property by an Emigrant of Canada, and carry the amounts to Schedule 3 on your departure return. If the total fair market value of everything you owned on departure was more than $25,000, you must also file Form T1161, List of Properties by an Emigrant of Canada. Miss the T1161 deadline and the penalty is $25 per day, with a $100 minimum and a $2,500 maximum.7Canada.ca. Dispositions of Property for Emigrants of Canada
Deferring Payment
You don’t have to pay the departure tax up front. File Form T1244 by April 30 of the year after you emigrate and you can elect to defer the amount. If the federal tax on your deemed disposition is more than $16,500 ($13,777.50 for former Quebec residents), the CRA requires acceptable security to cover the deferred amount. Provincial or territorial tax may call for additional security.7Canada.ca. Dispositions of Property for Emigrants of Canada
What Happens to Your RRSP, RRIF, and TFSA
Registered accounts don’t close when you leave, but the rules shift.
Your RRSP or RRIF stays open and keeps growing tax-sheltered inside Canada. Withdrawals attract a 25% withholding tax, though a treaty with your new country of residence can bring that down.9Canada.ca. Tax Rates on Withdrawals You can’t contribute new money because non-residents stop accumulating contribution room once Canadian earned income stops.
TFSAs are where people lose money. The account stays open and the investment growth inside it stays tax-free in Canada, but any contribution you make while a non-resident is penalized at 1% per month for every month the contribution remains in the account. If that contribution also exceeds your available room, a second 1% monthly penalty stacks on top.10Government of Canada. If You Owe Tax on Non-Resident TFSA Contributions
After You’re a Non-Resident
Once your departure is behind you, Canada taxes only income from Canadian sources: employment income for work performed in Canada, rental income from Canadian property, business income from a permanent establishment here, and certain pension payments.11Canada Revenue Agency (CRA). Non-Residents of Canada
Most of that income flows through Part XIII withholding tax. The default rate is 25%, and the payer (bank, pension administrator, tenant, plan administrator) withholds before sending you anything. It applies to dividends, rental payments, pension payments, CPP and OAS benefits, RRSP withdrawals, and royalties.12Canada Revenue Agency. Applicable Rate of Part XIII Tax on Amounts Paid or Credited to Persons in Countries With Which Canada Has a Tax Convention Ordinary bank interest paid at arm’s length is generally exempt; interest from a related party or participating debt interest is not.13Canada Revenue Agency (CRA). T4058 Non-Residents and Income Tax 2024
If Canada has a treaty with your new country, the rate on many types of income drops, often to 15% or less on pensions and dividends. You or your payer can apply the reduced rate directly, but confirming the entitlement is on you.12Canada Revenue Agency. Applicable Rate of Part XIII Tax on Amounts Paid or Credited to Persons in Countries With Which Canada Has a Tax Convention
Benefits You Stop Receiving
Non-residents are not eligible for the GST/HST credit, which requires Canadian residency during the month before and the month of each payment.14Canada Revenue Agency (CRA). GST/HST Credit – Who Is Eligible The Canada Child Benefit also requires residency as a basic condition.15Canada Revenue Agency. Who Can Apply – Canada Child Benefit (CCB) Keep collecting after you leave and the CRA will claw the money back as an overpayment.