Vancouver to Orlando: Simulation, Gaming, and the BC Departure Tax

Vancouver's VFX, gaming, and animation studios have a direct counterpart in Orlando: EA's studio, the simulation and training corridor around UCF, and the technology groups inside the theme-park companies. The move trades BC's combined top rate of about 53.5% for a federal-only US return, and it trades one of the world's most expensive housing markets for one of Florida's cheaper ones. Both trades have tax consequences.

Key takeaways

• BC's roughly 53.5% top rate sets the departure tax. On a $300,000 unrealized gain, roughly $80,000.
• 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 6.5% sales tax in Orange County.
• MSP ends on permanent departure.
• Orlando has no city income tax; Florida has no state income tax.

Leaving BC

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 defer with security under Form T1244 where assets are illiquid.

At about 53.5%, BC's effective exit rate on gains at the top bracket is roughly 27 cents per dollar. Studio employees with vested options or founder shares in a small studio should get a valuation before setting the date.

The Vancouver home

Not caught by departure tax; the principal residence exemption covers the years you lived there. Keeping it is where BC differs from other provinces. BC's Speculation and Vacancy Tax applies in Metro Vancouver to homes that are not a principal residence or long-term rental, with higher rates for owners who pay most of their tax outside Canada. The City of Vancouver's Empty Homes Tax applies separately to unoccupied properties inside the city. The 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.

Equity

Studio equity that vests after the move is split between Canada and the US by working days over the vesting period. Both payrolls may withhold; the excess is recoverable on the first-year returns. Options exercised after departure are similarly sourced.

Orlando's side

No state income tax, no city income tax, no estate tax. Sales tax is 6.5% in Orange County. Property tax is higher than Vancouver's as a percentage of value but far lower in dollars 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 is untouched on departure and tax-deferred in the US under the treaty. 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 Vancouver technical artist leaves on March 31 for a simulation studio in Orlando with $120,000 of unrealized gain in a non-registered account, $80,000 of vested employer shares with a $20,000 cost base, $300,000 in an RRSP, and a Burnaby condo sold in the departure year.

• Departure tax. $120,000 plus $60,000 of gains, $90,000 taxable, at about 53.5%: roughly $48,000.
• Condo. Sold as a resident under the principal residence exemption. No Speculation and Vacancy Tax exposure.
• RRSP. No tax on departure; periodic withdrawals later at 15%.
• Orlando. No state or city income tax. Sales tax 12% 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

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

"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

Vancouver movers who keep the condo "for a year to see how it goes" are the files where we see three separate vacancy taxes assessed on one property. If the plan is to hold, rent it under NR6 from the first month; if the plan is to sell, sell in the departure year while the principal residence exemption is at full strength.

See also: Vancouver to Miami and Vancouver to Tampa.

Next step

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