Montreal to Orlando: Revenu Québec on the Way Out, Zero State Tax on the Way In

Montreal's engineering and gaming sectors have an obvious counterpart in Orlando: the simulation and training corridor around the University of Central Florida, EA's studio, and the theme-park technology groups. The move is a large tax cut on paper (Quebec's combined top rate is about 53.3%; Florida's state income tax is zero), but the departure year runs through three authorities, because Revenu Québec expects its own final return.

Key takeaways

• Two Canadian departure returns: the federal T1 and Revenu Québec's TP-1, with matching departure dates.
• Departure tax at about 53.3% combined. On a $300,000 unrealized gain, roughly $80,000.
• Quebec's 14.975% combined GST and QST becomes 6.5% sales tax in Orange County.
• RAMQ coverage ends on departure; QPP is taxed only in the US once you are a Florida resident.
• Orlando has no city income tax and Florida has no state income tax.

The three-authority departure

The federal deemed disposition applies to non-registered investments, private company shares, crypto, and property outside Canada. Quebec's rules mirror it. You report the gain on federal Form T1243 (with T1161 for the property list if it exceeds $25,000) and on the Quebec equivalents. The 16.5% Quebec abatement on federal tax is already reflected in the 53.3% combined rate.

The US enters the same year with a dual-status first return, the RRSP treaty position, FBAR on remaining Canadian accounts, and Form 8938.

Montreal-specific items

• RAMQ. Ends when you leave Quebec to settle outside Canada. Line up the employer plan.
• QPP. Taxable only in the US under Article XVIII of the treaty.
• Montreal condo. Not caught by departure tax. Renting it means NR6 and Section 216 federally, plus Quebec equivalents; selling later means Section 116 clearance.
• Gaming studio equity. RSUs vesting after the move are split by working days between Canada and the US. Both payrolls may withhold; the excess is recoverable on the first-year returns.

Orlando's side

No state income tax, no city income tax, no estate tax. Sales tax is 6.5% in Orange County (6% state plus 0.5% county). Property tax is higher than Montreal's on a like-for-like home; homestead (own and occupy as your permanent residence on January 1, apply by March 1) takes up to $50,000 off assessed value and caps annual increases at 3%. Documentary stamp tax on a purchase deed is 0.7%.

The RRSP stays tax-deferred in the US under the treaty, with no Florida layer to disregard it. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, with a US foreign tax credit.

Worked example

A Montreal simulation engineer leaves on July 31 with $250,000 of unrealized gain in a non-registered account, $500,000 in RRSPs, RSUs vesting in December, and a Rosemont condo kept and rented.

• Departure tax. $250,000 gain, $125,000 taxable, at about 53.3%: roughly $67,000 across the T1 and TP-1.
• Condo. NR6 filed before the first post-departure rent; Section 216 return annually; Quebec equivalent filed alongside.
• RSUs. December vest split by U.S. and Canadian working days.
• RRSP. No tax on departure; periodic withdrawals later at 15%.
• Orlando. No state or city income tax. Sales tax 14.975% becomes 6.5%.

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

Revenu Québec sets out the income tax obligations of individuals who cease to be resident in Québec, including the deemed disposition of property on departure. — Revenu Québec, Leaving Québec, https://www.revenuquebec.ca/en/citizens/your-situation/residence-status-and-tax-obligations/leaving-quebec/

"No tax upon estates or inheritances or upon the income of natural persons who are residents or citizens of the state shall be levied by the state, or under its authority." — Florida Constitution, Article VII, Section 5(a), http://www.leg.state.fl.us/statutes/index.cfm?submenu=3#A7S05

Practitioner note

A rented Montreal condo is where Quebec files get complicated. The federal NR6 and Section 216 return have Quebec counterparts, and a preparer who handles only the federal side leaves Revenu Québec expecting 25% of gross rent. We file both sides together, with the same departure date on the T1, the TP-1, and the US return.

See also: Montreal to Miami and Montreal to Tampa.

Next step

Fairlight prepares the T1, the TP-1, the rental filings on both sides, and the first-year US return for Central Florida clients. See cross-border pricing or book a call.