Toronto to Las Vegas: RRSPs, the Gaming-Tech Corridor, and Zero State Income Tax

Las Vegas has become a technology market as well as an entertainment one: the sports betting and casino technology firms recruit Toronto's software engineers, and the resort operators recruit Toronto's hospitality and finance professionals. The move is one of the largest rate cuts on the map: Ontario's combined top rate of about 53.5% becomes a federal-only 37%.

Key takeaways

• Ontario's roughly 53.5% top rate, including the provincial surtax, sets the departure tax. On a $300,000 unrealized gain, about $80,000.
• Nevada has no state income tax; US tax is federal only.
• 13% HST becomes 8.375% sales tax in Clark County.
• Nevada property tax is among the lowest in the US, with a 3% annual cap on owner-occupied homes.
• OHIP ends on permanent departure. Keeping the Toronto home means NR6, Section 216, and the Vacant Home Tax if empty.

The Ontario departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. Ontario 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. The Toronto home: sell it, rent it under NR6 and Section 216, or face the Vacant Home Tax.

Las Vegas's side

No income tax; Clark County sales tax 8.375%; property tax among the lowest in the US, roughly 0.5% to 0.7% effective, with a 3% annual cap on increases for owner-occupied homes; no estate tax; no inheritance tax.

The RRSP in Nevada

Untouched on departure, federally deferred under the treaty, with no Nevada 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

RSUs vesting after the move are split by working days between Canada and the US; no Nevada layer. Both payrolls may withhold on the full amount.

Who makes this move

Toronto software engineers to the sports betting and casino technology firms, Ontario hospitality and finance professionals to the resort operators, Toronto retirees to Henderson and Summerlin, and Ontario entertainment professionals to the Strip's productions.

Worked example

A Toronto software engineer moves to Las Vegas on May 31 with $200,000 of unrealized gain in a non-registered account, $400,000 in an RRSP, RSUs vesting after the move, and a Toronto condo sold in the departure year.

• Departure tax. $200,000 gain, $100,000 taxable, at about 53.5%: roughly $53,500.
• Condo. Sold as a resident under the principal residence exemption.
• RSUs. Vests split by working days; no Nevada layer.
• RRSP. No tax on departure; periodic withdrawals later at 15%.
• Las Vegas. No state income tax. HST 13% becomes sales tax 8.375%.

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

Effective January 1, 2020 the Clark County Sales and Use Tax rate increased to 8.375%. — Nevada Department of Taxation, Sales Tax & Use Tax, https://tax.nv.gov/tax-types/sales-tax-use-tax/

There are 5 Ontario income tax brackets and 5 corresponding tax rates. — Government of Ontario, Personal income tax, https://data.ontario.ca/dataset/personal-income-tax-rates-and-credits

Practitioner note

Toronto-to-Las Vegas is a clean file: no state tax, low property tax, and a state that adds nothing to the RRSP. The planning is entirely on the Ontario side, and the departure date is the decision.

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

Next step

Fairlight prepares the Ontario departure return, the property filings, and the first-year US return for Las Vegas clients. See cross-border pricing or book a call.