Tax Compliance

T1135 Foreign Property Reporting Requirements

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What Is the T1135 Reporting Requirement?

Canadian residents (individuals, corporations, trusts) must file Form T1135 if they held specified foreign property with a total cost over $100,000 CAD at any time during the tax year. This is a reporting requirement—no tax is payable on the form itself (income is reported elsewhere).

What Property Must Be Reported?

Specified foreign property includes: funds in foreign bank accounts, shares of non-Canadian corporations (including through foreign brokers), foreign bonds and debentures, interests in foreign trusts, real estate outside Canada (not for personal use), loans to non-resident persons.

What Is Excluded from T1135?

You do NOT report: personal-use property (vacation home for personal use), property used in active business outside Canada, shares of Canadian mutual funds holding foreign investments, shares of foreign affiliates (separate reporting), RRSPs/TFSAs holding foreign investments.

What Are the Penalties for Non-Compliance?

Penalties are severe: $25/day for late filing (minimum $100, maximum $2,500), $500/month for failure to file (maximum $12,000), Gross negligence penalty: 5% of highest cost amount of unreported property, knowingly failing to file: $1,000/month (maximum $24,000) plus potential criminal prosecution.

Frequently Asked Questions

What is the T1135 threshold for foreign property reporting?

You must file T1135 if your specified foreign property cost exceeds $100,000 CAD at any time during the year. The cost is calculated in Canadian dollars using the exchange rate when you acquired the property.

Do I report my vacation property on T1135?

No, foreign real estate used primarily for personal use (vacation property) is exempt from T1135 reporting. Only foreign real estate held for investment or rental purposes must be reported.