If you moved to Canada and still own a bank account, apartment, shares or investments back home, form T1135 is probably in your future. The rule is that a Canadian resident who owns specified foreign property with a total cost amount of more than $100,000 CAD at any point in the year has to file it, alongside their tax return.
Two things save most newcomers a lot of worry. First, you do not file T1135 for your first tax year in Canada. That exemption exists specifically so new residents are not caught by a form they have never heard of. Second, when you became a Canadian resident, most of your foreign property was deemed to be reacquired at its fair market value on that day, so your cost amount is usually the value on your landing date, not what you originally paid decades ago.
That second point cuts both ways. It protects you from decades of accumulated gain, and it also means the modest apartment you bought overseas in 2008 for the equivalent of $60,000 may now carry a cost amount of $400,000 for T1135 purposes. Here is how it all fits together.
We offer a comprehensive range of Tax Accountant services in Coquitlam and across other regions of British Columbia.
On this page
- Quick Answer: Who Must File, and the One Exception for Newcomers
- Your First Tax Year in Canada: Why You Do Not File, and Why Year Two Is Different
- The $100,000 Threshold: What It Actually Measures
- What Counts as Specified Foreign Property
- What Is NOT Reportable
- Simplified vs Detailed Reporting Method
- Deadlines and How to File
- Penalties: $25 a Day, and How Much Worse It Gets
- You Missed Past Years, Now What?
- Frequently Asked Questions
- Newcomer Tax Help in North Vancouver
Quick Answer: Who Must File, and the One Exception for Newcomers
You must file T1135 for a tax year if:
- You were a resident of Canada at any time in that year, and
- The total cost amount of all your specified foreign property exceeded $100,000 CAD at any point during the year, and
- It is not your first taxation year as a Canadian resident
T1135 is an information form, not a tax form. Filing it does not create tax. Not filing it creates penalties of $25 a day and keeps your tax year open to reassessment for an extra three years, which is the part that actually hurts.
Your First Tax Year in Canada: Why You Do Not File, and Why Year Two Is Different
The Income Tax Act gives new residents a pass on foreign property reporting for the taxation year in which they first become resident in Canada. It is a one time exemption, it applies to individuals, and it is genuinely automatic.
So if you landed in Canada in 2025:
| Tax year | T1135 required? |
| 2025, your arrival year | No, exempt |
| 2026 | Yes, if you are over the $100,000 threshold |
| Every year after | Yes, whenever you are over the threshold |
The exemption applies to the form only. It does not exempt you from reporting your worldwide income. From the day you become a Canadian resident, your rental income, interest, dividends and capital gains from anywhere in the world go on your Canadian return, first year included.
A practical note that catches people: the first year exemption is one year, not one year of grace after you notice the form. Plenty of newcomers file for three or four years, never hear about T1135, and then discover the obligation when they change accountants. That is a fixable situation, covered further down.
The $100,000 Threshold: What It Actually Measures
Cost Amount, Not Market Value
This is the mistake that costs people money in both directions.
The threshold tests cost amount, which is generally your adjusted cost base, not today’s market value. A portfolio you bought for $90,000 that is now worth $300,000 does not, on its own, put you over the line. A property with a cost amount of $150,000 that has fallen in value to $80,000 does.
For newcomers, the cost amount is usually simpler than you fear. When you became a Canadian resident, you were deemed to have disposed of and immediately reacquired most of your property at its fair market value on that date. Your cost amount for Canadian purposes therefore starts fresh at your landing day value.
Two consequences worth understanding:
- Gains accrued before you arrived in Canada are generally not taxed here, which is good news
- Your T1135 cost amount reflects landing day value, which is often much higher than your original purchase price, so people cross the $100,000 threshold sooner than they expect
Get a documented valuation as of your landing date. A bank statement, a broker statement, a formal appraisal for real estate. Reconstructing it five years later is painful and less credible.
How to Convert Foreign Currency Correctly
Everything on T1135 is reported in Canadian dollars. Use the Bank of Canada exchange rate. For cost amount, use the rate in effect at the time you acquired the property, or in a newcomer’s case, the rate on your date of arrival. For income and dispositions during the year, use the rate on the transaction date, or the annual average rate where CRA permits it for recurring amounts.
Keep the rate and the date you used with your records. It is the first thing a reviewer asks about.
What Counts as Specified Foreign Property
| Reportable | Notes |
| Funds in foreign bank accounts | Including chequing, savings, term deposits |
| Shares of non resident corporations | Even when held through a Canadian brokerage account |
| Foreign real estate held for investment or rental | Land, apartments, commercial property |
| Debts owed to you by non residents | Loans, bonds, debentures, notes |
| Interests in non resident trusts | Including certain foreign pension arrangements |
| Foreign mutual funds and ETFs | Held outside a registered plan |
| Precious metals and bullion held abroad | Physical holdings outside Canada |
| Foreign insurance policies with cash value | Certain life policies |
| Intangibles held abroad | Patents, copyrights, IP |
| Your share of partnership property | Where the partnership holds foreign property |
The most missed item on that list is foreign shares held inside a Canadian brokerage account. People assume that because the account is Canadian, nothing is foreign. The test is where the issuer is resident, not where the account sits.
What Is NOT Reportable
- Property held inside an RRSP, RRIF, TFSA, FHSA, RESP or registered pension plan
- Personal use property, including a vacation home used primarily by you and your family
- Property used exclusively in carrying on an active business
- Shares of a foreign affiliate, which are reported on T1134 instead
- Personal items such as cars, jewellery, artwork and furniture held for personal use
- Interests in certain foreign mutual funds registered in Canada
Personal Use Property: Your Family Home Abroad
This is the exemption newcomers rely on most, so be clear about where the line sits.
A property you and your family use personally and do not rent out is generally personal use property and is not reportable, even if it is worth a great deal. The moment you rent it out with a view to profit, it becomes specified foreign property and it counts toward your threshold.
Mixed use is the grey area. A place you use for two months a year and rent for the other ten is not primarily personal use. A place you visit every summer and never rent is. If you rent it occasionally at below market rates to family, document the arrangement, because “primarily for personal use” is a factual test and you want the facts on file.
Simplified vs Detailed Reporting Method
| Total cost amount of all specified foreign property | Method | What you report |
| $100,000 to $250,000 | Part A, simplified | Check the categories of property you held, the top three countries by cost, total income, and total gain or loss |
| Over $250,000 | Part B, detailed | Property by property detail: description, country, maximum cost during the year, cost at year end, income, gain or loss |
The simplified method is genuinely simplified and takes minutes if your records are in order. The detailed method requires you to track the maximum cost amount during the year for each property, which is a real record keeping obligation and the main reason people underestimate the work.
Deadlines and How to File
Your T1135 deadline matches your income tax return deadline.
| Filer | Deadline |
| Individual | April 30 |
| Individual with self employment income | June 15, with any balance owing still due April 30 |
| Corporation | Six months after fiscal year end |
| Partnership | Five months after fiscal year end |
| Trust | 90 days after tax year end |
File it electronically with your return through your software, or as a standalone electronic submission. Paper filing is still possible but slower and increases the risk of it going astray.
Penalties: $25 a Day, and How Much Worse It Gets
| Situation | Penalty |
| Late filing or failure to file | $25 per day, minimum $100, maximum $2,500 per year |
| Knowingly failing to file, or gross negligence | $500 per month, up to 24 months, so up to $12,000 |
| Failure to comply after CRA issues a formal demand | $1,000 per month, up to 24 months, so up to $24,000 |
| Failure continuing past 24 months after a demand | An additional 5% of the cost of the property |
There is a quieter cost that matters more than any of these. If you do not file T1135, or you file it with property omitted, CRA’s normal reassessment period for that year is extended by three years. A year that would have closed after three years stays open for six, for everything, not just the foreign property.
You Missed Past Years, Now What?
This is common and it is fixable. The route is CRA’s Voluntary Disclosures Program.
To qualify, your disclosure generally has to be voluntary, meaning CRA has not already contacted you about it, complete, involve a potential penalty, and include information at least one year overdue.
The practical sequence:
- Work out which years you were resident, over the threshold and did not file
- Reconstruct cost amounts, ideally back to your landing day valuation
- Determine whether any foreign income also went unreported, because that usually needs correcting at the same time
- Submit the disclosure with the missing T1135 forms and any amended returns
- Expect to pay the tax and interest on any unreported income. The relief is on penalties.
Do this before CRA contacts you. Once they have written to you about foreign property, the voluntary route generally closes, and the penalties in the table above become live.
If you are reading this and doing quiet mental arithmetic about the last four years, that is exactly the conversation to have with someone before you file anything else. Our team at MaxPro Financials works with newcomers to Canada in North Vancouver and across the Lower Mainland on precisely this: establishing your landing day valuations properly, working out which of your overseas assets are actually reportable and which are not, filing T1135 correctly, and where past years were missed, handling the voluntary disclosure so it is done once and done right.
Frequently Asked Questions
Do I report property I inherited abroad?
Yes, if it is specified foreign property and it takes you over the threshold. Your cost amount is generally the fair market value at the time you acquired it. If it is a home you and your family use personally and do not rent, the personal use exemption may apply instead.
Do I file T1135 on a work permit or as a temporary resident?
Immigration status is not the test. Tax residency is. If you have established significant residential ties to Canada such as a home, a spouse or dependants here, you are likely a Canadian resident for tax purposes and T1135 applies from your second tax year onward, regardless of what permit you hold.
I rent out an apartment overseas. Do I report the income too?
Yes. Canadian residents report worldwide income from their first year, including the first year when T1135 itself is not required. Report the gross rent and the expenses, and claim a foreign tax credit for tax paid in the other country so you are not taxed twice.
Does CRA share information with my home country?
Canada participates in the Common Reporting Standard, under which financial institutions in more than 100 jurisdictions report account information that is exchanged between tax authorities. There is a separate arrangement with the United States. In practice, assume CRA can see foreign accounts held in your name.
Do I report foreign stocks held in my Canadian brokerage account?
Yes. Shares of non resident corporations are specified foreign property regardless of where the account is held. Your broker’s statements usually flag which holdings are foreign, and many issue a foreign property report specifically for T1135.
What about foreign investments in my RRSP or TFSA?
Not reportable. Anything held inside an RRSP, RRIF, TFSA, FHSA, RESP or registered pension plan is excluded from T1135 entirely.
My spouse and I own a property jointly. Do we both file?
Each of you tests your own share against the $100,000 threshold and files on your own share. If the property has a cost amount of $180,000 and you own it equally, neither of you may need to file on that property alone, but you each add your $90,000 share to your other foreign property when testing the threshold.
My total dropped below $100,000 by December 31. Do I still file?
Yes. The test is whether you exceeded $100,000 at any time during the year, not the year end balance. This catches people who sell a foreign property mid year.
Do I report a foreign bank account holding less than $100,000?
Only if it forms part of a total that exceeds $100,000. The threshold is on all your specified foreign property combined, not per account. A $60,000 account plus $70,000 of foreign shares puts you over.
What if I never filed T1135 and CRA has never mentioned it?
Fix it through the Voluntary Disclosures Program before they do. Penalty relief is generally available while the disclosure is still voluntary and disappears once CRA has contacted you about it.
Newcomer Tax Help in North Vancouver
Landing day valuations, deemed acquisition rules, which overseas assets are reportable, foreign tax credits, and a form with a $2,500 penalty attached to it are a lot to absorb in your first couple of Canadian tax seasons.
MaxPro Financials works with newcomers and their families on the whole picture: your first Canadian return, establishing and documenting cost amounts as of your arrival date, T1135 filings, foreign rental and investment income reported correctly with the right credits claimed, and voluntary disclosures where earlier years were missed. Book a consultation and we will tell you plainly what you need to file and what you do not.