Retiring back in your home country

Topic: Retirement · Part 13 of 13 · 🔴 Advanced

In one sentence

If you plan to retire in your home country or anywhere outside Canada, this post explains what happens to your CPP, OAS, savings accounts, taxes and health coverage when you leave.

Words to know

Non-resident: for tax, a person who no longer has their main ties to Canada, such as a home, a spouse or dependants living here.
Non-resident tax: tax taken off payments from Canada to non-residents. The basic rate is 25%.
Tax treaty: an agreement between Canada and another country. It can lower non-resident tax.
Departure tax: when you leave Canada, the CRA treats you as if you sold certain property on that day. You may owe tax on the gain.
Social security agreement: an agreement that lets time in another country count toward Canadian benefits, and the other way around.

Step 1: Check if your CPP and OAS can follow you

CPP is based on what you paid in. It can be paid to you while you live outside Canada.

OAS has a residence rule. Your OAS can keep being paid abroad if either is true:

you lived in Canada for at least 20 years after age 18, or
you lived or worked in a country with a social security agreement with Canada, and your time in both countries adds up to at least 20 years.

If neither is true, your OAS may stop once you are outside Canada for more than 6 months. The Guaranteed Income Supplement (GIS) is different: it can’t be paid if you are outside Canada for more than 6 months, no matter how long you lived here.

Contact Service Canada before you leave. This helps avoid overpayments you would have to pay back.

Step 2: Understand non-resident tax on your income

Once you are a non-resident, Canada usually takes 25% tax off your CPP, OAS, RRSP and RRIF payments. A tax treaty with your new country may lower this rate, and it is applied automatically. If there is no treaty, you can ask to have less withheld with Form NR5. Each year you get an NR4 slip showing what was paid and withheld.

Section 217 election: instead of the flat withholding, you can choose to file a Canadian tax return for this income. You are then taxed like a resident, and you may get some of the withheld tax back. This often helps people whose Canadian income is low. For 2025 income, the return was due June 30, 2026.

If you receive OAS while living abroad, you may also need to file an Old Age Security Return of Income each year. If you don’t, your OAS can be held back. The OAS clawback can apply to non-residents too, unless a treaty exempts you. Your new country may also tax this income, so check its rules.

Step 3: Know the departure tax basics

When you stop being a resident, the CRA treats most of your property as sold at its market value on that day. If it went up in value, you may owe tax on the gain, even though you didn’t sell. This often affects non-registered investments, like shares or funds.

Some things are not included:

Canadian real estate
RRSPs, RRIFs, TFSAs and pension plans
property you already owned when you last arrived in Canada, if you lived here 60 months or less in the 10 years before leaving

You can choose to delay paying this tax until you really sell, with Form T1244. If you owned property worth more than $25,000 in total when you left, you must also file Form T1161. These rules are complex, so this is a good time to talk to a cross-border tax professional.

Step 4: Decide what to do with your accounts

RRSP and RRIF: you can usually keep them. Withdrawals have non-resident tax taken off. The rule to convert your RRSP by the end of the year you turn 71 still applies.
TFSA: you can keep it, and Canada doesn’t tax its growth or withdrawals. But you get no new room for years you are a non-resident. Contributions made while non-resident are taxed 1% a month while they stay in the account. Your new country may tax TFSA income.
Banking: tell your Canadian bank and investment firm that you are a non-resident. Some firms limit what non-residents can do, such as buying new investments. Keeping one Canadian account can make it easier to receive payments and pay any Canadian tax. Your CPP and OAS can be paid by direct deposit to an account abroad in some countries, or by cheque.

Step 5: Plan for health coverage and paperwork

Your provincial health plan generally ends once you no longer live in the province. Each province has its own rules for long absences. Arrange health coverage in your new country before you go, and contact your provincial plan about your move.

Keep your address up to date with both the CRA (through My Account) and Service Canada (through My Service Canada Account or by phone). Payments, NR4 slips and letters go to the address on file. Benefits like the Canada child benefit generally stop when you become a non-resident.

Example

Assumptions: a person arrived in Canada at age 40 and leaves at 58. They will get a CPP pension of $800 a month.

OAS years: 58 − 40 = 18 years in Canada after age 18. That is less than 20, so OAS may stop after 6 months abroad, unless a social security agreement adds enough years.
CPP in a country with no treaty: $800 × 25% = $200 withheld. They receive $600 a month.
CPP in a country where the treaty rate is, say, 15%: $800 × 15% = $120 withheld. They receive $680 a month. (Treaty rates differ by country; some are 0%.)

Common mistakes

Not telling Service Canada about the move, then having to repay OAS or GIS.
Continuing to contribute to a TFSA after becoming a non-resident.
Forgetting the departure tax on non-registered investments.
Leaving Canada without new health coverage in place.

✅ My checklist

☐ I counted my years in Canada after age 18 for OAS
☐ I checked if my new country has a tax treaty and a social security agreement with Canada
☐ I know which of my property may face departure tax
☐ I stopped TFSA contributions and told my bank I’m a non-resident
☐ My address is updated with the CRA and Service Canada

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There are no affiliate or referral links in this post. This is general information, not financial, tax or legal advice; everyone’s situation is different. Figures were checked in October 2026 and can change.

Sources: Canada.ca: Receiving your OAS pension · Canada.ca: Receiving GIS · Canada.ca: Taxes on pensions and benefits outside Canada · Canada.ca: Managing pensions outside Canada · CRA: Electing under section 217 · CRA: Tax rates on withdrawals · CRA: Leaving Canada (emigrants) · CRA: Dispositions of property for emigrants · CRA: How non-residency affects your TFSA