Canadian residents who own foreign property worth more than $100,000 CAD have to tell the CRA about it once a year. The form is called T1135. It's an information return - no tax is calculated on it - but missing it can cost more than most people realize. The penalty starts at $25 a day and can climb fast for repeat misses or when the CRA decides you knew better.
If you are a Canadian tax resident and you owned specified foreign property with a total cost of more than $100,000 CAD at any point during the year, you have to file Form T1135 - whether or not the property earned anything, and whether or not you reported the income elsewhere on your return.
The list is broader than most people think. It includes:
The exceptions matter as much as the rules:
The $100,000 threshold is based on total cost amount in Canadian dollars - typically what you paid for the property in CAD on the day you bought it. Not the current market value.
This catches a lot of people. If you bought $80,000 USD of US stock in 2010 when the exchange rate was around par, your CAD cost is roughly $80,000 - and you might assume you're under the threshold even as the market value has tripled. But if you bought another $30,000 in 2020, you've crossed the threshold based on cost alone, regardless of where the market value sits today.
For currency conversion: CRA uses the spot exchange rate on the date the property was acquired (Bank of Canada rate). Not the year-end rate. Not an average. The rate on acquisition day. This means you may need historical exchange rate records going back many years.
The form has two reporting methods, and which one applies depends on a second threshold.
Available when total cost amount of all specified foreign property was $100,000 to under $250,000 CAD throughout the year. You check boxes for the categories of property you held (funds outside Canada, shares of non-resident corporations, real property, etc.) and indicate the country and total income. No need to list each property individually.
Required when total cost amount was $250,000 CAD or more at any point during the year. You list each property, its maximum cost amount during the year, cost amount at year-end, income generated, and any gain or loss on disposition.
One concession: if you hold the foreign property in an account with a Canadian-registered securities dealer or trust company, you can report aggregate information on a country-by-country basis rather than security-by-security. So a Canadian brokerage account holding 50 US stocks doesn't require 50 separate Part B entries - just an aggregate "USA" line covering all of them.
T1135 has the same filing deadline as your tax return:
The form must be filed electronically (since 2015 for most filers). It can be e-filed through certified tax software, separately through CRA's online services, or through a CRA-authorized representative.
T1135 has its own penalty regime that's separate from any tax owed. Even if your foreign property earned nothing and you owe no tax, you can still get hit hard.
$25 per day, minimum $100, maximum $2,500 per year. So roughly $2,500 if you're 100+ days late.
If the CRA decides the failure to file was due to gross negligence: $500 per month, up to a maximum of $12,000 per T1135. Twenty-four months is the cap.
If the CRA issues a demand to file, and you knowingly or grossly negligently fail to comply: $1,000 per month, up to $24,000.
After 24 months of failure to file, the penalty becomes 5% of the cost of the unreported foreign property, less penalties already paid. For a $500,000 unreported portfolio, that's $25,000.
For US persons resident in Canada, both forms apply - and they don't measure the same thing.
FBAR (FinCEN Form 114) measures the maximum balance in foreign financial accounts during the year. Threshold: $10,000 USD aggregate across all accounts. Filed with the US Treasury, not with the IRS. Pure financial accounts only.
T1135 measures the cost of specified foreign property, not the balance. Threshold: $100,000 CAD aggregate. Filed with the CRA. Covers more types of property than FBAR (including foreign real property held for investment, debts owed to you, intangibles).
For a US person who has become Canadian-resident, the practical reality is filing FBAR for non-Canadian accounts (since US accounts now constitute "foreign" from the Canadian perspective and "domestic" from the US perspective), filing Form 8938 if applicable, and filing T1135 covering all non-Canadian property over the cost threshold. The mechanics are different enough that combining them on one workpaper is awkward - usually they're prepared as separate exercises.
If you discover that you should have been filing T1135 for prior years but didn't, the CRA's Voluntary Disclosures Program (VDP) may waive the penalties (though not the underlying tax). The VDP requires that the disclosure be:
VDP applications are technical and usually benefit from professional preparation. The "voluntary" requirement is the trap - once the CRA opens an audit or issues a demand letter, the disclosure is no longer voluntary and the penalties stack.
Set up a tracking system early. Once your foreign property is anywhere near $100,000 CAD on a cost basis, start tracking. Don't wait for a tax year where you cross the threshold to figure out what your historical cost amounts were.
Get a foreign property report from your broker. Most Canadian brokerages now produce an annual T1135 report showing maximum cost amounts and country codes. If yours doesn't, ask. The data is exactly what you need.
Don't assume your accountant filed it. The CRA's penalty cases (Douglas v. The King, Horner v. The King) make clear that "I trusted my accountant" is not a defense. The obligation is on the taxpayer. Confirm in writing that the form was filed each year and keep a copy of the confirmation number.
If you cross the $250,000 line, prepare for Part B. The detailed reporting takes meaningful additional work and often requires data your broker doesn't volunteer.