T1135 Foreign Property Reporting for Canadian Landlords (2026)

T1135 — Foreign Income Verification Statement — is an annual CRA information return reporting specified foreign property held by Canadian residents. CRA uses it to enforce reporting of foreign income and to identify undisclosed offshore assets.

Three structural points:

• Information return, not a tax return. You report asset descriptions, maximum cost during the year, year-end cost, income generated, and gain or loss on disposition. No tax is computed on T1135 itself.
• Filed with your annual T1 return — either electronically with NETFILE-supported software, or mailed separately. The deadline matches your T1 deadline (typically April 30).
• Reporting is per individual, not per household. If you and your spouse jointly own US property, each of you files your own T1135 for your ownership share.

T1135 is required when the cumulative cost amount of specified foreign property exceeds CAD $100,000 at any point during the tax year.

Critical mechanics:

• Cost amount, not market value. The threshold is your original cost (typically purchase price plus capitalized improvements), not current market value. A US condo purchased for $250,000 USD that is now worth $400,000 USD is reported at the $250,000 cost base — not the $400,000 market value.
• At any point during the year, not year-end. If you bought a $200,000 property in March and sold it in October, that single-day position triggered T1135 for the year.
• Cumulative across all specified foreign property. Multiple smaller holdings can aggregate over the threshold. A $60,000 US property + a $50,000 Mexican property = $110,000 aggregate = T1135 triggered.
• Cost in CAD, converted at acquisition date. Convert the original purchase price to CAD using the exchange rate at the time of acquisition. For a USD $250,000 purchase in 2018 at USD/CAD 1.30, the cost in CAD is $325,000. That amount stays as the cost base going forward (unless you capitalize improvements).

What this means for Canadian US-property landlords: a single US condo purchased for $150,000 USD or more (which after CAD conversion easily exceeds CAD $100,000) triggers T1135. The threshold is effectively automatic for most cross- border landlords.

Included on T1135:

• US rental real estate — your Florida condo, Arizona house, Texas property, etc.
• Foreign bank and brokerage accounts — cash deposits, GICs, stocks held in non-Canadian accounts
• Foreign corporation shares held in non-Canadian accounts (Canadian-held foreign stocks are exempted)
• Foreign mutual funds and ETFs held in non-Canadian accounts
• Interests in non-resident trusts (rare for most landlords)
• Foreign cryptocurrency held in foreign exchanges or wallets (recent CRA guidance has clarified this)

Excluded from T1135 (key exclusions for landlords):

• US real estate held for personal use only — your snowbird vacation home that you do not rent out is excluded. The exclusion applies only if the property is genuinely personal-use; even minimal rental activity (Airbnb a few weeks a year) generally moves the property into reportable status.
• Foreign property held in a registered account (RRSP, TFSA, RRIF, RESP). Foreign securities inside an RRSP are not reportable on T1135.
• Foreign personal-use items below CAD $10,000 (your Florida vacation furniture, etc.).

T1135 has two reporting tiers:

• Simplified Reporting Method — for total specified foreign property cost between CAD $100,000 and $250,000. You check boxes indicating the type and country of property held, plus aggregate income earned. No per-property breakdown required.
• Detailed Reporting Method — required for total specified foreign property cost over CAD $250,000. You report per-property:
  • Country
  • Maximum cost during the year
  • Cost at year-end
  • Income earned during the year
  • Gain or loss on disposition

Most US rental property owners trigger Detailed Reporting. US property prices in Florida and Arizona routinely put a single property over the CAD $250,000 cost threshold. Add a second property and you are firmly in detailed territory.

Per-category breakdown for Detailed reporting uses CRA-defined categories — Category 1 (funds held outside Canada), Category 2 (shares of non-resident corporations), Category 3 (indebtedness owed by non-residents), Category 4 (interests in non-resident trusts), Category 5 (real property outside Canada), Category 6 (other property outside Canada), and Category 7 (property held in an account with a Canadian registered securities dealer or Canadian trust company). US rental property falls under Category 5.

For a Canadian-resident landlord with US rental property using Detailed Reporting:

• Section 5 (Real Property Outside Canada) — list the property with country (USA), maximum cost during the year (CAD), cost at year-end (CAD), and income earned (rental income reported on T776).
• Country code — USA. Use the standard ISO country code.
• Cost — purchase price in CAD plus cumulative capitalized improvements. Convert original purchase using the exchange rate at the date of acquisition; you may continue using that historical cost-in-CAD figure year over year, OR re-convert at the current year-end rate (consistent method required).
• Income earned — gross rental income for the year in CAD. Match the T776 line 8141 figure for that property.
• Gain or loss on disposition — if you sold the property during the year, report the capital gain or loss in CAD. Otherwise leave blank.

Coordination with T776 and Schedule 3. The income reported on T1135 for a US property should reconcile to the same income reported on T776 (gross rent). The disposition gain reported on T1135 should reconcile to Schedule 3 capital gains reporting. Discrepancies are the most common audit trigger.

T1135 deadlines:

• April 30 — for individuals (matches T1 deadline)
• June 15 — for self-employed individuals or their spouses (also matches T1 deadline)
• Six months after fiscal year end — for corporations and trusts

How to file:

1. NETFILE via tax software. All major Canadian tax software (TurboTax, Wealthsimple Tax, UFile) supports T1135 NETFILE submission alongside the T1.
2. Mail — submit a paper T1135 to your regional CRA Tax Centre with your T1.
3. EFILE via your CPA — most cross- border CPAs file T1135 alongside your T1 automatically.

Late filing penalty starts immediately. Unlike T1 extensions (which delay filing but not payment), T1135 has its own penalty clock — late filing penalties accrue from the original deadline regardless of T1 extensions.

T1135 penalty structure is unusually punitive specifically because CRA designed it to ensure foreign asset compliance:

• Late-filing penalty: $25 per day, minimum $100, maximum $2,500 (after 100 days late). Modest in absolute terms but adds up annually.
• Failure to file: Up to $24,000 per year ($25/day × 365 + further penalty escalations).
• False statement or omission: 5% of the cost amount of unreported foreign property, with a minimum penalty of $24,000. On a $250,000 property, that is $12,500 minimum even on the unintentional omission of a single asset.
• Gross negligence: Up to $12,000 per year on top of the underlying penalties — applied when CRA establishes willful blindness or knowing failure to file.
• Extended reassessment period: Failing to file T1135 extends CRA's reassessment period from 3 to 6 years for the related tax years — meaning your foreign income tax assessments stay open to reassessment for twice as long if you skip T1135.

Voluntary Disclosures Program (VDP). If you have missed T1135 for prior years, CRA's VDP allows voluntary disclosure that typically eliminates penalties (you still pay any tax owed with interest, but the punitive T1135 penalties may be waived). Application before CRA contacts you is essential — the program is unavailable after CRA enforcement action begins.

What trips up Canadian US-property landlords most often:

1. Not filing at all. The single most common mistake. Many Canadian landlords assume T1135 is for sophisticated offshore investors and do not realize their US rental property qualifies. Most cross-border landlords with US property must file.
2. Using market value instead of cost base. The threshold and reporting are cost-based. Appreciation does not increase your T1135 cost figure (capital improvements do).
3. Mixing currencies inconsistently. Original cost should be in CAD using a consistent conversion (typically at acquisition date, maintained year over year). Income should also be in CAD — typically at Bank of Canada annual average for the tax year.
4. Treating a personal-use property as exempt when it has any rental activity. The personal-use exception is strict — even minimal Airbnb activity moves the property into reportable territory. When in doubt, file.
5. Forgetting that co-owners each file separately. Spouses on title 50/50 each file T1135 for their 50% share. One joint T1135 is incorrect.
6. Discrepancy between T1135 income and T776 income. The gross rent reported on T1135 should match the gross rent reported on T776 for the same property and year. Mismatches trigger audits.

Tools:

• T1135 Threshold Checker — quickly determine whether your foreign property cost base crosses the CAD $100,000 line
• USD/CAD Exchange Rate Database — for converting property cost and rental income to CAD
• T1135 form reference page

BorderBird tracks the cost base of your US rental property in CAD (using the original acquisition rate or your chosen consistent method), plus annual rental income converted to CAD using the Bank of Canada annual average. The T1135 figures you need each year are produced as part of your standard annual export — no separate spreadsheet required. Try BorderBird free.

Related reading:

• FBAR for Canadians with US Rental Property — the US-side equivalent reporting form
• T776 Rental Income Form — Complete Guide
• Canadian Owning Rental Property in the US: Complete 2026 Guide
• Foreign Tax Credit for Canadian Rental Income