Who this is for
Residents of Canada with bank accounts, property, investments or income in India or anywhere else outside Canada. Especially newcomers in their second year, when the T1135 first applies.
The five points
-
Income is reported regardless. Rent, interest, dividends, capital gains and pensions from outside Canada go on the Canadian return. There is no threshold. $200 of NRO interest is reported.
-
The T1135 is about property, not income. It is an information form listing specified foreign property. Funds in foreign bank accounts, shares of foreign companies, foreign bonds and deposits, real estate outside Canada held for investment or rent, and similar. It is required when the total cost of all such property exceeded $100,000 Canadian at any time in the year.
-
A personal-use home is generally not counted. A home outside Canada that is mainly for your own use is generally not specified foreign property. A family house you stay in when you visit is the usual example. A flat rented out for most of the year is.
-
Newcomers skip the first year. An individual does not file the T1135 for the year they first become a resident. From the next year on, the test applies, using the property’s value when you became resident as its cost.
-
Missing the form has its own penalty. The T1135 is due with your return, and there are penalties for filing it late even when all the income was reported correctly. The income side and the form side are checked separately.
One thing many people do not realize
The $100,000 test looks at the total cost of the property, not its current value. It applies at any time in the year, not just December 31. Someone who held $110,000 of foreign deposits in March and spent most of it by December still has to file the T1135 for that year. And a property that produces no income can still be reportable; a bare plot of land in India held as an investment counts.
What to prepare
- A list of everything you hold outside Canada: accounts, deposits, investments, property, with the cost or value when acquired or when you arrived
- Statements showing income from each
- Proof of foreign tax paid
- Your arrival date if you became a resident in the last few years
When professional help may make sense
If you have held foreign property over the threshold for years without filing the T1135, the Voluntary Disclosures Program may apply. Our guide on it explains the current rules. If the property is held through a company or a trust, the forms are different.
How Rex Tax may be able to help
We report foreign income, prepare the T1135 when it applies, and claim the foreign tax credit. We check both questions every year as part of the return.
Official sources
This guide is general information, not advice about your situation. It reflects the rules for the 2025 and 2026 tax years. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.