I'm an international student in Canada. Do I need to file a tax return?
Yes — file every year you're a Canadian resident for tax purposes, even if you earned little or nothing. Filing unlocks money and credits you'd otherwise leave on the table:
- Get a SIN first. You need a Social Insurance Number to file; if Service Canada can't issue one, CRA can give you an Individual Tax Number (Form T1261).
- File a T1 every year you live here — even at $0 income. No income doesn't mean no return.
- Claim your tuition. Your school issues a T2202 slip; tuition credits carry forward for years until you earn enough to use them.
- Most scholarships and bursaries are tax-free for full-time students — but you still report them.
- Apply for the GST/HST credit. Filing is what triggers these quarterly payments.
| File your return | Skip it |
|---|---|
| Tuition credits banked for future years | Tuition credits never recorded |
| GST/HST credit payments start | Quarterly payments missed |
| Tax withheld from part-time work refunded | Withheld tax left on the table |
| Builds your CRA filing history | Gaps that complicate PR/citizenship paperwork later |
TFB prepares student T1 returns from $59.
RRSP vs TFSA vs FHSA — which one should I actually use?
Three accounts, three different tax deals. Pick by what the money is for:
- RRSP: deduct now, pay later. Contributions are tax-deductible — 18% of earned income up to $33,810 for 2026. Best when your tax rate today is higher than it will be when you withdraw (usually retirement).
- TFSA: pay now, never again. No deduction going in, but growth and withdrawals are completely tax-free. $7,000 per year for 2026 ($109,000 lifetime if you've been eligible since 2009). Best for flexibility and medium-term goals.
- FHSA: the best of both — but only for a first home. Deductible like an RRSP, tax-free on withdrawal like a TFSA. $8,000 per year, $40,000 lifetime. If you're not buying soon, don't open one just to park money.
- Newcomers: TFSA room starts the year you arrive (no credit for earlier years); RRSP room builds only from Canadian earned income you report.
| RRSP | TFSA | FHSA | |
|---|---|---|---|
| Contribution deductible? | Yes | No | Yes |
| Growth taxed? | No (until withdrawal) | Never | Never |
| Withdrawal taxed? | Yes, as income | No | No (first home only) |
| 2026 limit | 18% to $33,810 | $7,000/yr | $8,000/yr ($40,000 life) |
| Best for | Retirement, high earners | Flexibility, any goal | First-home down payment |
I'm buying my first home. What tax breaks can I get?
Four programs stack — most buyers only know one:
- First-Time Home Buyers' Tax Credit. Claim $10,000 on line 31270 of your return; at the 15% federal rate that's $1,500 off your tax bill. Non-refundable — it can zero your bill but won't generate a refund.
- Home Buyers' Plan (HBP). Withdraw up to $60,000 from your RRSP tax-free for the down payment; repay it over 15 years. A couple can combine for $120,000.
- FHSA. Contribute up to $8,000/year (deductible), withdraw tax-free for the purchase ($40,000 lifetime). You can use FHSA and HBP on the same home.
- Ontario land transfer tax rebate. First-time buyers get up to $4,000 back on provincial land transfer tax — often wiping it out entirely at closing.
- "First-time" definition: you (and your spouse) didn't own and live in a home in the current year or the previous four years.
| Program | What you get | Key rule |
|---|---|---|
| Home Buyers' Tax Credit | $1,500 off federal tax | Line 31270, non-refundable |
| Home Buyers' Plan | Up to $60,000 RRSP withdrawal, tax-free | Repay over 15 years |
| FHSA | $8,000/yr deductible, tax-free out | First home only, $40,000 lifetime |
| Ontario LTT rebate | Up to $4,000 back | First-time buyer, at closing |
I moved for a new job. Can I deduct my moving expenses?
Yes — if you pass the 40-kilometre test:
- The 40km rule. Your new home must be at least 40km closer to the new work location than your old home was. Measure the difference, not the total distance.
- What's deductible: movers and storage, travel to the new home, temporary living costs (up to 15 days), legal fees on selling your old home, and real estate commissions.
- How to claim: line 21900 of your return (complete Form T1-M). You need income at the new location to deduct the expenses against.
- Students: moving for full-time post-secondary study follows the same 40km rule, deductible against scholarship and grant income.
- Keep every receipt. CRA routinely asks for proof on this line.
| Deductible | Not deductible |
|---|---|
| Movers, storage, travel | House-hunting trips before the move |
| Temporary living (up to 15 days) | Loss on selling your old home |
| Legal fees selling old home | Mortgage penalties (generally) |
| Real estate commission on sale | Cleaning/repairs to old home |
I'm selling my rental property. How much tax will I owe?
On a rental or second property, only half the gain is taxable in 2026:
- Compute the gain. Sale price minus (purchase price + buying/selling costs + capital improvements like a new roof or renovation).
- Apply the 50% inclusion rate. Only half your capital gain is added to income — the proposed 66.67% rate was cancelled, so 50% stands for 2026 regardless of the gain size.
- Your principal residence is different. If the home was your principal residence every year you owned it, the gain is fully tax-free: exemption = (1 + years designated) ÷ years owned × gain.
- Report it anyway. Even a fully exempt principal-residence sale must be reported on Schedule 3.
- Renovations pay twice. Every dollar added to your cost base cuts the taxable gain dollar-for-dollar — keep every invoice.
| Principal residence (all years) | Rental / second property | |
|---|---|---|
| Tax on the gain | $0 (fully exempt) | 50% of gain taxable at your marginal rate |
| Must report sale? | Yes, on Schedule 3 | Yes, on Schedule 3 |
| Example: $200,000 gain | $0 tax | ~$100,000 taxable → roughly $40,000 tax at a 40% marginal rate |
I'm leaving Canada for good. Is there really a 'departure tax'?
Yes — and it surprises almost everyone who leaves:
- Deemed disposition. On your departure date, most of your property is treated as if you sold it at fair market value. You pay tax on the unrealized gains — that's the "departure tax."
- File a departure return. File a T1 for your departure year and enter your departure date; CRA prorates many credits.
- What's exempt: Canadian real estate, RRSPs/RRIFs, TFSAs, and business property in Canada are not deemed sold.
- Short-term residents get relief. If you were resident 60 months or less out of the last 120, most other property is also exempt from deemed disposition.
- Consider Form NR73. You can ask CRA for a written opinion on your residency status before you go — useful if your ties are borderline.
- Document values. Get statements or appraisals showing fair market value on your departure date; that's your tax baseline.
| Deemed sold at departure | NOT deemed sold |
|---|---|
| Stocks, ETFs, mutual funds (non-registered) | Canadian real estate |
| Foreign property | RRSP / RRIF / TFSA / FHSA |
| Cryptocurrency | Business property in Canada |
Leaving mid-year with investments, a rental, or foreign assets? The departure return is easy to get wrong — TFB handles departure filings from $89.
CTA
Tax questions about a move, a home purchase, or a big life change? WhatsApp 437-879-6899 — T1 returns from $89, students $59.
Official CRA links
– Home Buyers' Amount (line 31270): https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31270-home-buyers-amount.html
– CRA Taxology for newcomers & international students: https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/podcasts/taxology-episode-8-new-country-new-taxes-info-newcomers-international-students.html
