WHAT MAKES YOU A NON-RESIDENT OF CANADA FOR TAX PURPOSES?

Moving to another country does not automatically make you a non-resident of Canada for tax purposes. The Canada Revenue Agency (CRA) looks at the facts of your situation, with significant residential ties being one of the most important factors. Primary ties include having a home available to you in Canada, a spouse or common-law partner in Canada, or dependants living in Canada.

The CRA can also consider secondary ties collectively, including Canadian bank accounts and credit cards, a driver’s licence, provincial health insurance, personal property, social memberships, and other economic ties. A single secondary tie does not normally determine your status by itself. Tax treaties can also affect the final determination if you’re considered a resident of another country.

Becoming a Canadian non-resident can change how you’re taxed and how certain Canadian assets and accounts are treated. For example, some property may be subject to Canada’s departure tax rules, Canadian-source income can become subject to non-resident taxation, and TFSA contributions made while you’re a non-resident are generally subject to a 1% monthly tax while the contribution remains in the account.

If you’ve been researching Canadian non-resident tax rules, leaving Canada for tax purposes, moving abroad from Canada, retiring outside Canada, or Canadian tax residency, understanding your residency status should be part of your planning before relocating. SOL Properties helps Canadians exploring international real estate and relocation connect with professionals who can assist with the legal, tax, financial, and property considerations of moving abroad.

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