Vancouver to Miami: Tech Money, the Substantial Presence Test, and the BC Property You Leave Behind

Vancouver to Miami is a smaller corridor than Vancouver to Seattle, but the people on it tend to carry more: founders and early employees with concentrated equity, crypto holders, and real estate wealth built in one of the most expensive housing markets in North America. BC's combined top rate is about 53.5%; Miami has no state or city income tax. The three things that decide the file are the departure tax on the equity, what happens to the Vancouver home, and how early the US day count actually started.

Key takeaways

• BC's top combined rate of about 53.5% sets the departure tax. On a $300,000 unrealized gain, roughly $80,000; on concentrated founder equity, far more.
• The Vancouver home is excluded from departure tax, but a non-resident owner faces BC's Speculation and Vacancy Tax, Vancouver's Empty Homes Tax, and the federal Underused Housing Tax if it sits empty.
• BC's 12% combined GST and PST becomes 7% sales tax in Miami-Dade.
• Crypto is caught by the deemed disposition. Exchange accounts also trigger FBAR once you are a US person.
• Florida has no state income tax, so RRSP and equity gains after the move are taxed federally only.

The BC departure

Departure tax is a deemed sale of non-registered investments, private company shares, crypto, and foreign property at fair market value on the day you leave. 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 to defer tax on illiquid private shares, which is common on founder files.

For concentrated positions, the departure date is a valuation date. Founders sometimes move in the window between a funding round and a liquidity event, when the fair market value is defensible and the deemed gain is smaller than it will be later. The lifetime capital gains exemption on qualified small business shares can also be used against the deemed disposition if the shares qualify.

MSP ends when you leave BC permanently. There is no premium to cancel, but the gap before US coverage starts is real.

The Vancouver home

Not caught by departure tax, and the principal residence exemption covers the years you lived there. Keeping it is where Vancouver differs from every other Canadian city:

• BC Speculation and Vacancy Tax applies in Metro Vancouver and other designated regions to homes that are not a principal residence or long-term rental, with higher rates for foreign owners and owners who do not pay most of their tax in Canada.
• City of Vancouver Empty Homes Tax applies separately to properties inside the city that are unoccupied for more than six months.
• Federal Underused Housing Tax can apply to a non-resident, non-citizen owner.
• Rent it and NR6 plus Section 216 apply. Sell later and Section 116 clearance is required.

Selling before or in the departure year is usually the answer.

Crypto and equity

Crypto held on departure is deemed sold at fair market value. After the move, US-based and foreign exchange accounts are reportable on the FBAR and Form 8938 once thresholds are met. Equity compensation vesting after the move is split by working days between Canada and the US over the vesting period; both payrolls may withhold on the full amount.

Miami's side

No state income tax, no city income tax, no estate tax. Sales tax is 7% in Miami-Dade. Property tax is higher than Vancouver's on a like-for-like home, softened by homestead: own and occupy as your permanent residence on January 1, apply by March 1, for up to $50,000 off assessed value and a 3% annual assessment cap.

The RRSP is untouched on departure and 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.

The day count

The substantial presence test counts all days this year, one-third of last year's, and one-sixth of the year before. Founders who spent months in Miami before the move for fundraising or conferences sometimes crossed the line a year early. That decides which year is the first US return and when the FBAR and TFSA exposure began.

Worked example

A Vancouver founder leaves on April 30 with private company shares worth $2 million (adjusted cost base $200,000), $300,000 of unrealized gain in a brokerage account, $150,000 in crypto with a $50,000 cost base, and a Kitsilano house sold in the departure year.

• Departure tax on the shares. $1.8 million gain, $900,000 taxable, at about 53.5%: roughly $480,000, reduced if the LCGE applies and deferrable with security under T1244.
• Brokerage. $300,000 gain: roughly $80,000.
• Crypto. $100,000 gain: roughly $27,000. Exchange accounts reportable on FBAR after the move.
• House. Sold as a resident under the principal residence exemption.
• Miami. No state or city income tax on any post-move gain. Sales tax 12% becomes 7%.

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

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

"You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least: 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that." — Internal Revenue Service, Substantial Presence Test, https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

Practitioner note

Vancouver files are valuation files. The departure date fixes the fair market value of private shares and crypto, and the difference between a defensible valuation in March and one in September can be six figures of departure tax. We get the valuation support in hand before the date is set, and we file T1244 to defer the tax on anything that cannot be sold to pay it.

Next step

Fairlight prepares the BC departure return, the T1244 deferral, and the first-year US return. See cross-border pricing or book a call.