I can't afford the departure tax right now — can I delay paying until I actually sell?
Yes. File Form T1244 with your departure-year return to elect to defer payment of the departure tax until you actually dispose of each property. No interest accrues on the deferred tax. The catch: if the federal tax on the deemed disposition exceeds $16,500 ($13,777.50 for former Quebec residents), you must post adequate security with CRA.
How the deferral works
| Item | Detail |
|---|---|
| Form | T1244, attached to your departure-year return |
| Effect | Tax payable deferred until actual sale, gift, or death — interest-free |
| Security threshold | None required if federal departure tax is $16,500 or less |
| Above threshold | Post security (CRA reviews it annually) |
You can elect property-by-property using the chart on page 2 of T1244 — defer the illiquid private-company shares, pay the tax on the liquid stocks now, for example.
What counts as adequate security
CRA generally accepts:
- A letter of credit or guarantee from a Canadian financial institution
- A mortgage on Canadian real property (up to 75% of appraised equity)
- The shares themselves, if they are the property giving rise to the tax
Start early — arranging security takes time, and it must be in place by the filing deadline of the year after emigration or interest starts running.
Frequently asked questions
What happens when I eventually sell?
The deferred tax becomes payable for the year of actual disposition. Report the sale normally; the old deferred amount is credited.
Can I unwind if I move back?
Yes — re-establishing Canadian residency lets you elect to unwind the deemed disposition, cancelling the deferred tax and returning your security.
Is the election available for every property?
For most deemed-disposition property, yes. Listed on T1243 (the property list) and T1244 (the deferral election) — the two forms work as a pair.
Sources
- https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/dispositions-property.html (CRA)
- Form T1244, Election to Defer Payment of Tax on Income Relating to Deemed Disposition