Retiring from Canada: Departure Taxes and Expat Rules

Retiring from Canada to a warmer, lower-cost country is a dream for many. To secure your financial freedom, you must successfully navigate the transition from resident to non-resident status with the Canada Revenue Agency (CRA).

Tax and Residency Considerations for Canadians

To avoid paying tax on your worldwide income to Canada, you must formally establish non-resident status:

• Severing Residential Ties: You must sell or lease your primary home, close local bank accounts, and surrender your provincial driver's license.
• Departure Tax (Deemed Disposition): Canada levies a tax on the unrealized gains of your assets when you emigrate, treating them as if you sold them.
• Registered Accounts (RRSP and TFSA): You can keep your RRSP, but withdrawals by non-residents are subject to a withholding tax (usually 25%). TFSAs cannot accept new contributions once you leave, and income earned within them may be taxed by your new host country.
• Provincial Healthcare: Most provinces terminate your health coverage if you remain outside the province for more than 6 to 7 months a year.

Model your savings in Canadian Dollars below by selecting a destination country.