Taxes in Canada for immigrants: what you need to know in the first year after moving

Many new immigrants believe that taxes don't concern them yet, especially if they haven't earned a single dollar in Canada. This is a dangerous misconception. Even with zero income, you need to file a tax return, otherwise you could lose your right to benefits that the government is ready to pay. Let's look at what every newcomer needs to know about Canadian taxes.

Tax Status: The First Thing to Determine

In Canada, taxes are tied not to citizenship, but to residency. If you have housing in Canada, if your family lives here, if you spent 183 days or more in the country — you're a tax resident. For most immigrants, residency begins from the first day of arrival in the country.

It's important to understand: immigration status and tax status are different things. Immigration status determines your right to live, work, or study in Canada, but doesn't determine tax obligations. It's tax residency that decides whether you're a Canadian taxpayer.

The main criterion for determining tax residency is having and maintaining significant residential ties with Canada: housing, a spouse or partner, dependents. An individual who hasn't established significant residential ties with Canada but was in the country for a total of 183 days or more in a calendar year is considered a deemed resident for that entire year. If your status is unclear, you can officially request an opinion from the Canada Revenue Agency by filling out form NR74 when entering the country.

Worldwide Income: What You Need to Declare

From the moment you became a resident, Canada taxes all your worldwide income. Everything you earned after moving — in Canada, Russia, Kazakhstan, anywhere — needs to be reported on your return in Canadian dollars. Foreign income must be declared even if it's partially exempt from Canadian tax under an international tax treaty to avoid double taxation.

Income earned before moving isn't taxed, but you still need to report it on your return, because your total income for the year, including the period before moving, affects the calculation of benefits and tax credits.

Foreign Property and Deemed Disposition

This is where many people stumble. If you owned foreign property worth more than $100,000 CAD, you need to familiarize yourself with the requirements for reporting foreign property on form T1135.

Make sure to document the fair market value of all your property on the date of entry. The Canada Revenue Agency considers that your assets were deemed sold and bought back at market price at the time you became a resident. This value becomes the new cost base for Canadian tax purposes. If you don't record it now, when you actually sell, they might calculate tax on the entire amount.

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Here's a concrete example: an immigrant had real estate that was worth $500,000 CAD when they arrived in Canada. Three years later, they sold it for $550,000 CAD and transferred $530,000 CAD to Canada. If they didn't declare this property upon entry, they could be taxed on the entire $530,000 CAD plus penalties. Properly documented value would have limited the taxable capital gain to the difference between the sale price and the value on the date of entry.

Tax Rates and Basic Personal Amount

The basic personal amount for 2026 is $16,452 CAD — this is income on which no federal tax is paid at all. Starting in 2026, the lowest federal income tax rate dropped to 14%. For new immigrants who often earn little in their first year, the tax burden has become noticeably lighter.

In addition to federal income tax, each province and territory sets its own rates. Provincial tax is applied on top of federal tax. In the year of immigration, provincial tax is determined by the rates of the province where the taxpayer resided on December 31 of the tax year.

The basic personal amount for 2025 was $16,129 CAD, and for 2026 it increased to $16,452 CAD to account for inflation. Federal tax brackets and personal tax credit amounts for 2026 are increased by an indexation factor of 2%.

Benefits You Can't Miss

GST/HST Credit

The GST/HST credit is a quarterly tax-free payment from the government. For the period from July 2025 to June 2026, the maximum amounts are: $349 CAD for singles, $698 CAD for couples, plus $184 CAD for each child under 19.

New residents without children can apply using form RC151 immediately after arrival, without waiting for their first tax return. If you have children — you need to fill out forms RC66 and RC66SCH to receive the Canada Child Benefit. This is separate money, and it can be quite substantial: in 2026, the maximum benefit for a child under six is up to $8,157 CAD per year, for a child from six to seventeen — up to $6,883 CAD.

Important Change: New Canada Groceries and Essentials Benefit

Starting July 2026, the GST/HST credit will be replaced by an expanded Canada Groceries and Essentials Benefit. The corresponding law (Bill C-19) received Royal Assent on February 12, 2026. Quarterly payments under the new benefit increase by 25% for a period of five years, starting July 2026. For a family of four, the maximum amount will be up to $1,890 CAD per year, for a single person — up to $950 CAD.

Additionally, as part of the transition to the new benefit, recipients who were eligible for the GST/HST credit payment in January 2026 will receive an additional one-time top-up of 50% of their annual amount — no later than June 2026. To receive these payments, you must file returns for 2024 and 2025. New residents of Canada still need to fill out form RC151 to participate in the program.

First-Year Limitations: What You Can't Deduct

There's an important limitation that few people warn you about: in your first year of filing a return, you won't be able to deduct contributions to a Registered Retirement Savings Plan (RRSP) if you haven't filed Canadian returns before. The deduction is only possible if the filer submitted a return in Canada between 1990 and 2024 inclusive.

Moving expenses to Canada are also generally not deductible. The exception is for people who came as full-time students and received taxable Canadian scholarships or grants. However, if after moving an immigrant gets a job and incurs expenses for moving within Canada to a new workplace, such expenses may be deducted.

Filing Deadlines

The deadline for filing your 2025 return is April 30, 2026. For self-employed individuals, the deadline is extended to June 15, 2026, but taxes still need to be paid by April 30. Online filing of 2025 returns through certified software opened on February 23, 2026.

If an immigrant arrived in Canada in 2025, they must file a return for 2025 by April 30, 2026. If an immigrant arrived in 2026 — their first return will be due by April 30, 2027.

Critically important: even if you have zero income — file your tax return every year. Your spouse or partner must do this too. Without filing, you simply won't receive benefits. The tax agency uses the information from your return each year to calculate benefits and credit payments, even if the taxpayer doesn't owe any tax or has no income to report.

If you file late, interest will accrue on any taxes owed plus a late-filing penalty. If you don't have the money to pay immediately, you still need to file on time and then contact the tax agency to discuss payment options.

What newcomers need to do: step-by-step plan

Get a Social Insurance Number (SIN)

A SIN is a nine-digit number required to access government programs and benefits. You need to include it on your tax return. If Service Canada cannot issue a SIN, the tax agency can assign a temporary tax number. If you haven't received your SIN yet and the filing deadline is approaching, you need to file a paper return without the SIN and attach a note explaining why — this will protect you from late-filing penalties. Online filing without a SIN is not possible.

Complete form RC151 to receive the GST/HST credit

New residents of Canada should complete and submit form RC151 — this can be done through the web form on the tax agency's website right after arrival, without waiting to file your first return. If you have children — also submit forms RC66 and RC66SCH for the Canada Child Benefit.

Document the value of foreign property

You need an official valuation of real estate and investments as of your entry date. Only amounts that represented the value of the property at the time you became a resident won't be taxed. Property valued at more than $100,000 CAD requires reporting on form T1135.

Include your exact entry date on your return

On your tax return, you must include the exact date of entry — the moment you became a tax resident of Canada. Typically, this is the date you arrived and established significant residential ties.

Choose how to file your return

You can file electronically using certified tax software, by mail on paper, or with the help of a qualified tax professional. It's crucial to keep all supporting documents: receipts for medical expenses, T4 slips from your employer. If an immigrant worked in Canada, the employer must provide a T4 slip showing income and the amount of tax withheld — usually by the end of February of the following year.

Set up direct deposit

Set up direct deposit through your financial institution or in your online account on the tax agency's website to receive tax refunds and benefit payments quickly and securely. If you set up direct deposit and file online, you can receive your tax refund in as little as eight business days after your return is processed.

Free help with filing your return

If an immigrant has a modest income and a simple tax situation, they can get free help completing their return at volunteer tax clinics (CVITP program). Self-employed individuals, landlords, and small business owners can get support from tax agency liaison officers.

Nevertheless, it's highly recommended to consult a qualified tax professional, especially in your first year. Mistakes at the start can be very costly — not just in money, but in stress. A taxpayer's residency status can be challenged by both the Canadian tax agency and foreign tax authorities, so it's crucial to carefully analyze all the facts to correctly determine your country of residence.

Frequently asked questions

Do I have to pay tax on money brought from CIS countries?

No, if it was earned before entering Canada. However, you need to document the value of assets as of your entry date, and if it exceeds $100,000 CAD — report it on form T1135.

Are there agreements to avoid double taxation?

Yes, Canada has tax treaties with most CIS countries to avoid double taxation. This reduces the risk of paying tax twice on the same income. Nevertheless, foreign income must be reported even when such a treaty exists.

What happens if I don't file a return?

Penalties, interest on amounts owed, and loss of benefits eligibility. The Canada Revenue Agency won't be able to calculate your payments without a filed return — you won't receive the GST/HST credit or the Canada Child Benefit.

Is it possible not to become a tax resident right away?

Theoretically yes — tax status depends on residential ties and length of stay. However, it's important to know: if you maintain non-resident tax status for more than two years, you could lose your permanent residence in Canada.