T1135
Foreign Income Verification Statement
T1135 is the CRA annual information return reporting specified foreign property held by Canadian residents. Required when the cumulative COST of foreign property exceeds CAD $100,000 at any point during the year — a threshold that essentially every Canadian-owned US rental property crosses. Filed with your T1.
⚠️ Important Disclaimer
This content is for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws change frequently — always verify with the CRA and IRS or consult a qualified cross-border tax accountant before making decisions.
Same as T1 return (April 30 or June 15 if self-employed)
Canadian residents who own US property or other foreign assets with a combined cost exceeding CAD $100,000
Key Takeaways
- T1135 is required when the COST base of specified foreign property exceeds CAD $100,000 at any point in the year — cost, not market value.
- Almost every Canadian-owned US rental property triggers T1135 — a single US property cost typically exceeds CAD $100,000 once converted at acquisition-date rate.
- Two reporting tiers: Simplified (cost between $100k-$250k CAD) is check-the-box; Detailed (above $250k) requires per-property breakdown.
- US real property reports under Category 5 (real property outside Canada) in Detailed reporting. Each property's cost, income, and disposition gain/loss listed separately.
- Penalties are among CRA's most aggressive: $25/day late filing (max $2,500); $24,000/year failure to file; 5% of unreported property cost (min $24,000) for omissions.
The CAD $100,000 cost threshold
T1135 is triggered when the cumulative cost amount of specified foreign property exceeds CAD $100,000 at any point during the tax year.
- Cost, not market value. Your $250,000 USD condo purchased in 2018 (worth $400,000 USD today) is reported at the $250,000 cost base, not the current market value.
- At any point during the year, not year-end. Bought + sold within the same year still triggers T1135 for that year.
- Cumulative across all specified foreign property. $60,000 US property + $50,000 Mexican property = $110,000 aggregate = T1135 triggered.
- Cost in CAD using acquisition-date rate. Original purchase converted at the rate at acquisition. That stays as the cost base year over year.
Simplified vs Detailed reporting
T1135 has two reporting tiers:
- Simplified Reporting Method — total specified foreign property cost between CAD $100,000-$250,000. Check the boxes indicating type and country of property held, plus aggregate income earned. No per-property breakdown required.
- Detailed Reporting Method — required when total cost exceeds CAD $250,000. Per-property reporting:
- Country
- Maximum cost during the year
- Cost at year-end
- Income earned during the year
- Gain or loss on disposition
Most US rental property triggers Detailed. A single Florida or Arizona property cost easily exceeds $250k CAD; add a second property and Detailed is unavoidable.
US rental property on T1135 — categories and lines
US rental property reports under Category 5 — Real Property Outside Canada in Detailed reporting. For each property:
- Country code: USA
- Maximum cost during the year (CAD) — acquisition cost + cumulative capitalized improvements, in CAD using consistent conversion
- Cost at year-end (CAD) — same as maximum cost unless you sold mid-year
- Income earned during the year — gross rental income for the year in CAD. Must match T776 line 8141.
- Gain or loss on disposition — only if you sold during the year. Should match Schedule 3 reporting.
Coordination matters. T1135 income figure should reconcile to T776 gross rent for the same property and year. T1135 disposition figure should reconcile to Schedule 3 capital gain. Mismatches trigger CRA review.
Penalties for non-compliance
T1135 penalties are deliberately punitive to enforce foreign asset compliance:
- Late filing: $25 per day, minimum $100, maximum $2,500 (after 100 days late)
- Failure to file: Up to $24,000 per year
- False statement or omission:5% of the unreported foreign property cost, with a minimum penalty of $24,000. On a $250,000 omission, that's $12,500 minimum.
- Gross negligence: Up to $12,000 per year on top of underlying penalties
- Extended reassessment period: failing to file T1135 extends CRA reassessment from 3 to 6 years for related tax years
Voluntary Disclosures Program (VDP) typically waives penalties if you disclose before CRA contacts you. Apply before any enforcement action begins.
Frequently asked questions
Who must file T1135?
Any Canadian resident whose cumulative cost of specified foreign property exceeds CAD $100,000 at any point during the tax year. For most Canadian landlords with US rental property, the threshold is automatically crossed by the property cost alone — T1135 is essentially mandatory annual filing.
Does my personal-use US vacation home count?
If genuinely personal-use only (no rental activity), excluded from T1135 specified foreign property. The exclusion is strict — any rental activity (even minimal Airbnb) moves the property into reportable status. When in doubt, file. Penalties for under-reporting are severe relative to the cost of filing.
What if I bought my US property for $200,000 USD — does that trigger T1135?
Almost certainly yes. Convert to CAD at acquisition rate — $200,000 USD at any plausible CAD/USD rate (1.20-1.40+) exceeds the CAD $100,000 threshold. T1135 is required for that year and every subsequent year you own the property.
How do I report co-owned property on T1135?
Each co-owner reports their share separately. Spouses on title 50/50 each file their own T1135 with 50% of cost and 50% of income. One joint T1135 is incorrect.
What's the T1135 deadline?
April 30 for individuals (matching T1). June 15 if you or your spouse have self-employment income. Late-filing penalties accrue from the deadline regardless of any T1 extensions — T1135 has its own penalty clock independent of T1.
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