What Foreign Property Needs to Be Reported?
The CRA requires you to report the following types of foreign property if the total cost exceeds $100,000 CAD:
Real estate (excluding personal-use property, such as a vacation home that generates no income)
Shares in foreign corporations (excluding those held in registered accounts like RRSPs or TFSAs)
Foreign bank accounts
Interests in non-resident trusts
Mutual funds or other investments held outside Canada
What Does Not Need to Be Reported?
Personal-use property (e.g., vacation homes or personal vehicles not used to generate income)
Foreign property held in registered accounts (e.g., RRSP, TFSA)
Property used exclusively in a business you carry on in Canada
Why Do I Need to Report It?
The CRA uses this information to ensure compliance with Canadian tax laws and international agreements. Even if your foreign property does not generate income, reporting is mandatory if the total cost exceeds the $100,000 CAD threshold.
How to Report Foreign Property
Use Form T1135:
Report your foreign property details on the T1135 – Foreign Income Verification Statement.
This includes the type of property, its location, the maximum cost during the year, and any income earned.
Include in Your Tax Return:
Submit the completed Form T1135 with your tax return.
File Separately if Required:
If filing electronically, you may need to submit Form T1135 separately from your main return, depending on your tax software.
What Happens If You Don’t Report?
Penalties: Failing to file Form T1135 on time can result in a penalty of $25 per day, up to a maximum of $2,500.
Additional Consequences: Severe penalties apply for knowingly failing to report or making false statements, potentially leading to audits or legal action.
Why This Matters
Reporting foreign property ensures compliance with CRA regulations and avoids costly penalties. Even if it does not generate income or impact your taxes, proper reporting is mandatory.