Countries With No Capital Gains Tax — What It Actually Means for Canadians

Belize has no capital gains tax under Belizean law. If you purchase property in Belize and sell it at a gain, you owe zero tax to the Belizean government on that gain. However, as a Canadian tax resident, you owe Canadian capital gains tax on the same gain under Canada's worldwide income taxation rules. The Canadian CGT calculation: when you sell, convert the sale price and adjusted cost base (purchase price plus eligible improvements) to CAD using Bank of Canada exchange rates at the respective dates. The difference is your capital gain. At a 50% inclusion rate and, say, a 50% marginal tax rate, your effective Canadian CGT is 25% of the gain. Because Belize collected zero tax, there is no foreign tax credit to reduce your Canadian obligation. The complete tax on the gain is borne by Canada. The only scenario where Belize's zero CGT truly eliminates your CGT exposure: you become a genuine Canadian non-resident (not just a tourist or seasonal visitor, but a person who has severed all residential ties to Canada and been recognized as a non-resident by CRA) BEFORE the property sale. But becoming a Canadian non-resident triggers departure tax — a deemed disposition of all non-registered assets at FMV on departure. You would pay Canadian CGT on the departure-date deemed gain on all your assets, not just the Belize property. For most people, the departure tax cost exceeds the CGT on any single property.

Departure tax is Canada's mechanism for collecting capital gains tax before you leave the country as a non-resident. When you cease to be a Canadian tax resident, CRA treats you as having disposed of most of your non-registered assets (investments, foreign real estate, business interests) at fair market value on the date of departure. This is the 'deemed disposition' rule. For foreign real estate: if you own a Belize property worth CAD $400,000 that you purchased for CAD $200,000, on the date you become a non-resident CRA deems you sold it for $400,000. Your capital gain is $200,000. At a 50% inclusion rate and 53.5% marginal rate (Ontario), your departure tax on that property alone is approximately $53,500. You must pay this tax even though you did not actually sell the property. After departure, any further appreciation in the Belize property that occurs as a non-resident is typically outside Canada's taxing jurisdiction (unless you are a deemed resident or have other Canadian ties). This is why departure tax planning requires professional advice — the timing of property sales relative to departure date can significantly affect the total tax. If you can sell the Belize property before you depart Canada, you pay the actual capital gains tax at your Canadian marginal rate. If you wait and sell as a non-resident years after departure, the gain above the departure-date FMV is not taxable in Canada (assuming clean non-residency).

The combination of zero or minimal local CGT plus a Canada tax treaty is rare — and that rarity is the point. Most zero-CGT jurisdictions (Belize, Bahamas, Cayman, Turks & Caicos) have no Canada tax treaty, which means: (1) no foreign tax to credit against Canadian CGT (it remains 100% owing to Canada), and (2) no treaty protection if the CRA tries to tax more than one country might expect. Mexico has the most useful treaty for property-owning Canadians, but it is not zero CGT — Mexico's ISR applies on the gain. The treaty's value: it prevents double taxation by specifying which country has primary taxing rights and providing a foreign tax credit mechanism. The foreign tax credit from Mexican ISR reduces your Canadian CGT by the ISR amount. Panama is arguably the best practical outcome: extremely low local CGT (3% of price or 10% of gain) but no Canada treaty, so the Panamanian tax is creditable as a foreign tax under Canadian domestic rules (even without a treaty, income taxes paid to foreign governments are generally creditable in Canada under the foreign tax credit rules, subject to specific conditions). The net result: Panama's 3% of gross sale price is a creditable foreign tax that partially reduces Canadian CGT. For buyers specifically trying to minimize total CGT, Panama produces the best outcome of any commonly used Canadian destination: minimal local CGT that is also creditable against Canadian CGT.

CONFOTUR (Law 158-01) exempts qualifying Dominican tourism developments from capital gains tax for the duration of the CONFOTUR designation period — typically 15 years from the development's completion. For a Canadian buyer purchasing a CONFOTUR-approved Punta Cana resort condo and selling within the CONFOTUR period, zero Dominican capital gains tax applies to the sale. This is a meaningful local benefit — the normal Dominican CGT is 25% on gains. However, the CONFOTUR exemption does not affect Canadian CGT. The Canadian buyer still owes Canadian capital gains tax at 50% inclusion on the gain, converted to CAD, regardless of the Dominican exemption. Because the Dominican Republic has no Canada tax treaty (as of 2026) and zero Dominican tax was paid (CONFOTUR exemption), there is no foreign tax credit to reduce the Canadian obligation. The practical comparison: buying a non-CONFOTUR Dominican property involves paying 25% Dominican CGT plus full Canadian CGT (with the Dominican CGT potentially creditable against Canadian CGT). Buying a CONFOTUR property involves paying zero Dominican CGT and full Canadian CGT. The CONFOTUR advantage in capital gains terms: you save the Dominican CGT and potentially get a higher total tax than if you had paid Dominican CGT and been able to credit it. The CONFOTUR benefit is most valuable for property tax savings (zero for 15 years) and transfer tax savings (zero at purchase) — not primarily for capital gains.

Canada's capital gains inclusion rate for individuals is 50% of the gain. This means: step 1 — calculate your capital gain. Sale price (in CAD) minus adjusted cost base (ACB in CAD) minus selling expenses. If you sell a property for CAD $400,000 that you purchased for CAD $300,000, your capital gain is $100,000. Step 2 — apply the inclusion rate. 50% of $100,000 = $50,000 is included in your taxable income for the year of sale. Step 3 — calculate the tax. You pay income tax on the $50,000 at your marginal tax rate. If your marginal rate is 50% (combined federal/provincial), you pay $25,000 in tax on a $100,000 gain — an effective CGT rate of 25%. Important adjustment: federal budget 2024 proposed increasing the inclusion rate to 67% for capital gains above $250,000 per year for individuals. If this change is in effect for your sale year, gains above $250,000 would have a higher effective tax rate. The currency gain component: when you purchase property in USD and sell in USD, the gain must be reported in CAD. If the CAD/USD rate was 0.80 at purchase and 0.72 at sale, the same USD $100,000 gain translates to a smaller CAD gain. Conversely, if CAD weakened further, the CAD gain is larger than the USD gain. This currency-conversion calculation is part of the ACB calculation for foreign property. Your purchase price in CAD was USD price × 0.80 at time of purchase; your sale price in CAD was USD price × 0.72. The mechanics require tracking these conversion rates.

Monaco has zero capital gains tax, zero income tax, and zero inheritance tax — the most comprehensive zero-tax environment in Europe. It is also the most expensive real estate market in the world, with average prices of approximately EUR $53,000 per square metre in 2026. A 50 square metre studio apartment in Monaco costs approximately EUR $2.65 million — approximately CAD $3.95 million at 2026 exchange rates. Monaco property is relevant for Canadians who: (a) are selling a very large Canadian asset (a major business or substantial property portfolio) and are considering establishing non-residency in Monaco before the sale to avoid Canadian CGT; or (b) are already ultra-high-net-worth individuals for whom Monaco property is a realistic consideration. For the vast majority of Canadian buyers with budgets under CAD $2 million, Monaco's zero CGT is irrelevant — the entry price is inaccessible. The Cayman Islands, Turks & Caicos, and the Bahamas offer zero CGT at property price points accessible to wealthy Canadians — and British Virgin Islands in the same tier. All face the same fundamental issue: zero local CGT does not protect a Canadian tax resident from Canadian CGT on worldwide gains.