Digital Nomad
Navigating the Departure Tax: What Digital Nomads and Emigrants Need to Know
Leaving Canada? Learn which assets trigger deemed disposition, what the $25,000 threshold means, and how to minimize departure tax liability.
By NomadicTax Research Team • 5-8 min read • August 27, 2026
## What Is Departure Tax?
When you **leave Canada** and become a non-resident for tax purposes, the Canada Revenue Agency (CRA) treats certain types of property as if you sold them at fair market value on your date of departure. Even if you don’t sell them, these **deemed dispositions** can result in **capital gains** that must be reported—that’s the departure tax. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html?utm_source=openai))
## Assets Subject to Deemed Disposition
Some common types include:
- Shares or mutual funds
- Jewellery, paintings, and collectibles
- Investment real estate (outside of the primary residence exemption)
- Other “capital property” types as defined by CRA regulations
If the total fair market value of your property exceeds **$25,000** at departure, you must file *Form T1161: List of Properties by an Emigrant of Canada*. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html?utm_source=openai))
## What If You Don’t Sell Before Leaving?
Even unsold assets still trigger tax consequences. The CRA assumes you’ve disposed of (sold) them at their current value and immediately reacquired them—leading to a **capital gain or loss** depending on cost basis vs. FMV. However, some property types are exempt, including certain personal-use items or properties that qualify under a specific exemption. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html?utm_source=openai))
## Rules for Tax-Free Savings Accounts (TFSAs)
- You can **keep** your TFSA after becoming non-resident; existing investments grow tax-free under Canadian law.
- You **cannot contribute** while you’re non-resident,
- And your **contribution room does NOT increase** during non-residency. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html?utm_source=openai))
## Minimizing Departure Tax: Strategies and Tips
- **Time your departure carefully**: If possible, defer leaving until after major capital gains are realized or favourable indices applied.
- **Sell capital property before departure** if exposure is large—this gives you control over taxes, timing, and reinvestment.
- **Use exemptions**: Make sure your primary residence qualifies; personal use properties under cost thresholds might be exempt.
- **Consider split ownership or trusts** (before departure), but be wary of attribution rules and complexity.
- **Document cost bases** diligently: FMV, acquisition cost, improvements—good records reduce risk.
## Example Scenario
Sofia owns Canadian and U.S. shares, plus an antique collection valued together at CA$50,000 when she leaves Canada permanently. She fills out T1161 and reports deemed dispositions:
- Capital gain on shares: sold (deemed) at FMV minus acquisition cost
- Antique collection: same
- TFSA accounts stay intact but no new contributions
She might end up with a large taxable capital gain in her final Canadian year. Paying tax in that year, but if low income or eligible deductions, tax may be manageable. If she waited, maybe some appreciation happens but tax could be higher. Timing matters.