Toronto to Salt Lake City: Silicon Slopes, the Mountain Corridor, and Utah's Flat Tax

Silicon Slopes' software companies and Salt Lake City's financial services sector recruit Toronto's tech workers and Bay Street finance staff. The move is a large tax cut: Ontario's combined top rate of about 53.5% becomes about 41.5% in Utah, with no city income tax and property tax among the lowest in the US.

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.
• Utah's flat income tax, 4.5% after the 2025 cut. No city income tax.
• Utah follows the treaty's RRSP deferral.
• 13% HST becomes about 7.75% sales tax in Salt Lake City.
• 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 under the principal residence exemption, rent it under NR6 and Section 216, or face Toronto's Vacant Home Tax if it sits empty. OHIP ends on permanent departure.

Salt Lake City's side

Utah's flat income tax, 4.5% after the 2025 cut; no city income tax; sales tax about 7.75% in Salt Lake City; property tax among the lowest in the US, near 0.6% effective, with a 45% residential exemption on primary residences; no estate tax.

The RRSP in Utah

Federally deferred under Article XVIII of the treaty and deferred for Utah because the state starts from federal AGI. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, a US foreign tax credit federally, and Utah's flat rate.

Equity

RSUs vesting after the move are split by working days between Canada and the US; the state and any local authority tax their share. Both payrolls may withhold on the full amount; the excess is recoverable on the first-year returns.

Who makes this move

Toronto and Waterloo software engineers to Silicon Slopes' tech companies, Bay Street finance staff to Goldman Sachs and Salt Lake City's financial services employers, Ontario healthcare professionals to Intermountain Health, and Toronto outdoor-industry professionals to Utah's recreation brands.

Worked example

A Toronto software engineer moves to Lehi on June 30 with $220,000 of unrealized gain in a non-registered account, $450,000 in an RRSP, RSUs vesting after the move, and a Toronto condo sold in the departure year.

• Departure tax. $220,000 gain, $110,000 taxable, at about 53.5%: roughly $59,000.
• Condo. Sold as a resident under the principal residence exemption.
• RSUs. Vests split by working days; Utah taxes its share at the flat rate.
• RRSP. No tax on departure; federal and Utah deferral.
• Lehi. Combined top rate about 41.5%. HST 13% becomes sales tax 7.25%. Property tax on a $750,000 home around $3,700.

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

Multiply line 9 by 4.5 percent (.045). — Utah State Tax Commission, Income Tax Rates, https://incometax.utah.gov/paying/tax-rates

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-Utah is one of the cleanest files we prepare: a flat state rate, no city tax, low property tax, and a state that follows the treaty. The Ontario side is the whole file.

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 federal and Utah returns for Salt Lake City clients. See cross-border pricing or book a call.