Vancouver to Houston: Energy, LNG, and Zero State Income Tax

BC's LNG projects have built a direct link between Vancouver and Houston's energy sector, and Vancouver's tech, biotech, and port-logistics professionals follow. The move is a large tax cut: BC's combined top rate of about 53.5% becomes a federal-only 37%. The Vancouver home is where the planning goes.

Key takeaways

• BC's roughly 53.5% top rate sets the departure tax. On a $300,000 unrealized gain, about $80,000.
• Texas has no state income tax; US tax is federal only.
• BC's 12% combined GST and PST becomes 8.25% sales tax in Houston.
• Harris County property tax runs about 2%; the housing trade from Vancouver still releases a large amount of cash.
• A Vancouver home kept empty faces three vacancy taxes. MSP ends on permanent departure.

The BC departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. BC 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 Vancouver home is excluded, but kept empty it invites BC's Speculation and Vacancy Tax, Vancouver's Empty Homes Tax, and the federal Underused Housing Tax; rent it under NR6 and Section 216, or sell in the departure year.

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.

Who makes this move

BC LNG and energy professionals to Houston's majors and midstream companies, Vancouver software engineers to Houston's energy-tech and enterprise employers, BC biotech researchers to the Texas Medical Center, and Vancouver port and logistics staff to the Port of Houston's operators.

Worked example

A Vancouver LNG project manager moves to Houston on May 31 with $250,000 of unrealized gain in a non-registered account, $450,000 in an RRSP, and a Vancouver condo sold in the departure year.

• Departure tax. $250,000 gain, $125,000 taxable, at about 53.5%: roughly $67,000.
• Condo. Sold as a resident under the principal residence exemption. No vacancy taxes.
• RRSP. No tax on departure; periodic withdrawals later at 15%.
• Houston. No state income tax. Sales tax 12% becomes 8.25%. Property tax on a $700,000 home around $14,000 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/

BC's Speculation and Vacancy Tax applies annually to residential property in designated taxable regions, with rates that depend on the owner's residency and tax status. — Government of British Columbia, Speculation and vacancy tax, https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy-tax

Practitioner note

Vancouver-to-Houston movers who keep the condo empty as a return option accrue three vacancy taxes in one year. Rent it from the first month or sell it in the departure year.

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

Next step

Fairlight prepares the BC departure return, the property decision, and the first-year US return for Houston clients. See cross-border pricing or book a call.