It was just announced by the U.S. State Department that the fee that one pays at the U.S. Consulate where you formerly expatriate citizenship will be reduced effective April 13, 2026 to $450 USD from $2,350 USD.
The $2,350 USD fee was raised from $450USD in 2015. A reduction was considered in 2023 however it was never implemented.
Anyone who is considering expatriating should get professional advice as there are punitive tax provisions in IRC 2801 and 877A of the code if your net worth is over $2M USD where one would be regarded as a “covered expatriate”. However, there are certain exemptions for dual citizens and minors even though one may exceed either the $2M USD net worth threshold or the 5-year average tax liability for the 5 years ending before the date of expatriation.
If you are a covered expatriate, the net unrealized gain on certain assets that you own at the date of expatriation is reduced by $890,000 (for 2026). The amount is adjusted annually. For other assets such as certain U.S. retirement and deferred compensation accounts, the U.S. withholding tax on payment to you going forward when you are not a U.S. person attracts the normal 30% for periodic payments as opposed to the 15% provided in Article XVIII of the Canada/U.S. tax treaty (“treaty”).
It does not appear that the U.S. tax payable on the unrealized capital gains (which may include that on your principal residence) is not creditable per the treaty on your Canadian tax return, on the portion of the capital gain relating to the U.S. situs assets. Determination of a potential bump in the Canadian equivalent tax basis for actual future dispositions should be examined per paragraph 7 of Article XIII of the treaty.
You may refer to the following links:
State Department slashes fee to renounce US citizenship by 80% to $450
Instructions for Form 8854 (2025) | Internal Revenue Service
You should consult with your professional advisor on all related matters
