Calgary to Houston: Same Industry, Two Tax Systems, and Zero State Income Tax

Calgary to Houston is the oldest energy corridor on the continent, and the tax picture is the cleanest of any Canadian city pair into Texas: Alberta's combined top rate of about 48% becomes a federal-only 37%, and the departure tax on the way out is the lightest in Canada. Houston charges property tax and sales tax instead, and the Calgary corporation is the item that needs attention before the move.

Key takeaways

• Alberta's roughly 48% top rate sets the departure tax. On a $300,000 unrealized gain, about $72,000.
• Texas has no state income tax; US tax is federal only.
• Alberta's 5% GST becomes 8.25% sales tax in Houston.
• Harris County property tax runs about 2%; file the homestead application after you move in.
• AHCIP ends on permanent departure.

The Alberta departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. Alberta real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000, and post security under Form T1244 for illiquid assets. A Calgary professional or holding corporation is deemed sold, loses CCPC status, and becomes a US controlled foreign corporation with Form 5471 filings; wind it up before you go.

Houston's side

No income tax; Harris County property tax near 2% effective with a homestead exemption and a 10% annual appraisal cap; 8.25% sales tax; no estate tax; strong homestead creditor protection.

The RRSP in Texas

Untouched on departure, federally deferred under the treaty, with no Texas layer. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, with a US foreign tax credit.

Equity and rotation

Energy compensation carries RSUs, options, and deferred bonuses split by working days between Canada and the US. Rotation workers who accumulated US days before the move may have met the substantial presence test early; count the prior three years first.

Who makes this move

Calgary energy executives and engineers to Houston's majors and independents, Alberta oilfield services staff to the Energy Corridor, Calgary geoscientists to the exploration companies, and Alberta finance professionals to Houston's energy trading and private equity firms.

Worked example

A Calgary energy executive moves to Houston on June 30 with $400,000 of unrealized gain in a non-registered account, $1 million in an RRSP, a holding company with $500,000 of investments, and a Calgary home sold in the departure year.

• Departure tax. $400,000 gain, $200,000 taxable, at about 48%: roughly $96,000, plus the holding company shares.
• Holding company. Wind up before June 30 or accept Form 5471 in the US.
• Home. Sold as a resident under the principal residence exemption.
• RRSP. No tax on departure; periodic withdrawals later at 15%.
• Houston. No state income tax. GST 5% becomes sales tax 8.25%. Property tax on a $900,000 home around $17,000 before homestead.

Official sources

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

"Texas imposes a 6.25 percent state sales and use tax on all retail sales, leases and rentals of most goods, as well as taxable services. Local taxing jurisdictions (cities, counties, special purpose districts and transit authorities) can also impose up to 2 percent sales and use tax for a maximum combined rate of 8.25 percent." — Texas Comptroller of Public Accounts, Sales and Use Tax, https://comptroller.texas.gov/taxes/sales/

Alberta's top personal income tax bracket: "15%" on "$362,961.01 and up" (2025). — Government of Alberta, Personal income tax, https://www.alberta.ca/personal-income-tax

Practitioner note

Calgary-to-Houston files have two recurring items: a holding company that must be wound up before departure, and a rotation history that may have made the client a US tax resident before the move. We check both before the date is set.

See also: Weighing Florida instead? See the Canada-to-Florida guide, or the same city's Calgary to Miami guide.

Next step

Fairlight prepares the Alberta departure return, the corporate wind-up, the residency analysis, and the first-year US return for Houston clients. See cross-border pricing or book a call.