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    TaxKilnCanadian tax guidance

    First-Year Tax for New Canadians

    Your first Canadian tax year is unlike any subsequent one. You file a part-year return, report worldwide income only from your arrival date, and unlock benefits (CCB, GST credit) that require affirmative application — they are not automatic. This guide walks through residency determination, SIN, the part-year return mechanics, and the first-year decisions that shape your contribution room going forward.

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    Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact CRA. Read our editorial scope →

    1. Residency — the gate to everything else

    Canadian tax residency is determined by significant residential ties (home, spouse/partner, dependants) per ITA s. 250 and CRA Folio S5-F1-C1, not by immigration status. You may be a tax resident on the day you arrive even before PR card issuance. Deemed residency (s. 250(1)) applies to certain government employees abroad and 183-day sojourners.

    2. SIN — apply before anything else

    A Social Insurance Number from Service Canada is required to file a return, claim benefits, open registered accounts (RRSP, TFSA, FHSA, RESP), or receive payroll. Newcomers can apply in person at Service Canada with PR confirmation or work/study permit. Temporary SINs starting with 9 expire with the permit.

    3. Part-year return: worldwide income from arrival date only

    As a new resident, you report only income earned after you became a tax resident. Foreign income earned before arrival is not taxed in Canada (ITA s. 114 part-year provisions). Federal and provincial credits (basic personal amount, etc.) are pro-rated by days resident if your non-Canadian-source income for the non-resident portion exceeded 10% of total income for the year.

    4. CCB and GST/HST credit — apply, don't wait

    Form RC66 (CCB) and RC151 (GST credit)
    CRA will not enrol you automatically. File RC66 Canada Child Benefits Application(with RC66SCH for newcomers) immediately on arrival if you have children. File RC151 GST/HST Credit Application for the year you became a resident. Both can backdate to arrival date.

    5. RRSP, TFSA, FHSA — room starts now

    RRSP room accrues only from earned income reported on a Canadian return — you have $0 room in year 1 (it generates room for year 2 based on year 1 earned income, capped at 18%). TFSA room begins to accumulate from the year you became a Canadian resident(no backdated room for years before arrival), at $7,000 for 2024 and $7,000 for 2025. FHSAroom ($8,000/year, lifetime $40,000) likewise begins at residency.

    6. Provincial health insurance waiting periods

    Most provinces impose a 3-month wait (Ontario OHIP, BC MSP, Quebec RAMQ). Private bridging insurance is available; premiums paid by a corporation may qualify under a Private Health Services Plan (PHSP/HSA).

    7. First-time self-employed as a newcomer

    If you start a business in your arrival year, you file Form T2125 alongside the part-year T1. GST/HST small-supplier threshold is $30,000 measured over four consecutive quarters — registration before $30k is voluntary. CPP self-employed contributions apply to all net SE income above $3,500 (basic exemption). See our T1 Filing guide and CPP & EI calculator.

    8. Foreign property reporting — T1135 threshold

    You are exempt from T1135 (Foreign Income Verification Statement) in the year you arrive(ITA s. 233.3). From year 2 onward, if specified foreign property (offshore bank accounts, foreign rental property, foreign brokerage holdings) exceeds CAD $100,000 cost amount at any time in the year, T1135 is mandatory. Penalties start at $25/day to $2,500 minimum for late filing.

    9. The 90% rule for non-refundable credits

    New residents are entitled to the full federal and provincial non-refundable credits (basic personal amount, spousal amount, etc.) only if 90% or more of their net world income for the pre-arrival portion of the year was Canadian-source (or they had no income at all). Otherwise the credits are prorated by days of Canadian residency. See CRA Guide T4055 and ITA s. 118.91.

    10. RRSP room — the year-1 zero

    • Year 1: $0 carry-forward room (no prior Canadian earned income reported).
    • Year 2: 18% of Year 1 earned income, capped at $32,490 for the 2025 ceiling.
    • Foreign pension contributions (e.g. UK SIPP, US 401(k) before arrival) do not generate Canadian RRSP room.

    11. TFSA room — fresh start, no backdating

    • Room starts accumulating from January 1 of your residency year.
    • Full $7,000 annual room even if you arrive mid-year (the limit is not prorated).
    • No retroactive room for any pre-residency years.
    • Canadian-born residents (turned 18 in 2009) may have up to ~$102,000 cumulative room as of 2025; newcomers start fresh from arrival year.

    12. T1135 — once you cross the threshold

    From year 2 onward, if your specified foreign property exceeds $100,000 CADcost amount at any point in the year, T1135 is mandatory (ITA s. 233.3). Specified foreign property includes:

    • Foreign bank and brokerage accounts
    • Shares of foreign corporations (even held in a Canadian brokerage)
    • Foreign bonds and debt
    • Foreign real estate not used personally
    • Interests in foreign trusts and non-resident investment funds

    Penalty: $25/day, min $100, max $2,500 for ordinary late filing — far worse for gross negligence (up to 5% of property value).

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