With snowbirds trying out new destinations such as Costa Rica, it's important to understand all the tax rules.Fred Lum/The Globe and Mail
The deadline for filing taxes in Canada for 2026 is April 30. As the big day approaches, Globe Advisor and Globe Investor have teamed up to offer advice on how to maximize returns, find credits and avoid an audit. The full series can be found here.
Anna Golan-Reznick doesn’t just advise Canadians on how to spend frigid winters in sunny climes, she’s living the life herself.
Ms. Golan-Reznick, an advice-only certified financial planner at Markham, Ont.-based Objective Financial Planners Inc., specializes in helping Canadians relocate or retire overseas. Eight months ago, she moved to Costa Rica with her family.
“Honestly, I hate winter. We always escape to warm countries, and Costa Rica suited us well. It’s peaceful, beautiful – and in the same time zone as Canada,” she says. “Costa Rica checked many boxes for us.”
Which country did not check those same boxes? The United States.
Despite the county’s previous ranking as the number one travel destination for the million Canadian snowbirds wishing to avoid months of windshield scraping, sunny states have lost their appeal because of a faltering Canadian dollar, insurance price increases, geopolitical risk, and rising tensions between Canada and the U.S.
Mr. Trump’s recent calls for Canada to become a 51st state haven’t helped, rankling many snowbirds enough to seek alternatives to their U.S. winter roosts. In January, the number of Canadian residents crossing back into Canada from the U.S. by automobile fell by 26.3 per cent from a year earlier.
Like Ms. Golan-Reznick, many are now looking into spending winters in places such as Mexico, Portugal, Spain, the Caribbean, Costa Rica and even Malaysia.
“We’re seeing the same sort of trend as well,” says Kris Rossignoli, a senior private wealth manager with Cardinal Point Wealth Management who specializes in cross-border financial concerns. “This really is an exploratory year for a lot of Canadian snowbirds who would traditionally go down to Arizona, Texas or Florida.”
Same sun, different locale – and potentially different tax consequences.
Those disparities will need to be addressed. While many Canadian snowbirds understand U.S. and Canadian tax rules, interest in other locations means advisors will have to shift focus to help clients navigate unfamiliar tax systems and financial regulations in places such as Lisbon and Tamarindo. Here are some guidelines to keep in mind:
Assume nothing: One of the biggest risks for snowbirds is that they’ll accidentally trigger tax residency in another country without even realizing it, Ms. Golan-Reznick says. It sounds obvious, but it bears repeating: Different countries have different rules, and if you break them, it can lead to complicated tax reporting and fees.
For instance, while Canadians have to be careful not to stay in the U.S. for longer than 183 days to avoid difficulties, in many European countries, they may only stay for up to three consecutive months. Making a temporary home in London? April 5 is the tax year-end in the U.K., but people must file by either Oct. 31 or Jan. 31 following the tax year-end.
And don’t forget, every snowbird has their own unique situation that can impact the tax advice they receive. Maybe they were born outside Canada and want to own a condo in their birth country. Or maybe they rent in Toronto, but also in Lisbon. So, what is considered their permanent home? It’s not always clear.
“The biggest risk is that a client relies on some type of media platform,” Ms. Golan-Reznick says. “People on Facebook groups might be saying, ‘You should do this or that,’ and maybe it applies well to their situation, but it’s generic advice and it does not apply to you.”
Understand residency rules and tax treaties: No matter which countries his clients are interested in, Mr. Rossignoli focuses on two factors to ensure they stay tax compliant: residency rules and tax treaties.
As mentioned, all countries have their own rules for how long a visitor is allowed to stay before they’re considered a tax resident. For some, it’s a straight numbers game. Others focus more on substantial presence and residency. Do you own property in Canada? Have an Ontario driver’s license? Are your investments in British Columbia? And with more snowbirds delaying retirement and working longer, are you being paid by a company back home? A tax treaty with Canada prevents double taxation and also provides residency tie-breaker rules.
Start early: Wading through these complexities takes time. Ms. Golan-Reznick started researching countries about two years before committing and says those who want to retire abroad full- or part-time should do the same.
If residency status isn’t clear, it’s possible to contact the Canada Revenue Agency, fill out an NR73 form and ask for the CRA to make a determination in advance. Ms. Golan-Reznick went this route – and received the answer eight months later.
“Proper planning is required and the more time the better,” she says. “We always try to help everyone, but if you move next Monday, it will be challenging.”