💼 Tax

Form T1135: How to Report Foreign Property to the CRA

Published June 25, 2026 · 8 min read · By the WealthWise team · Updated June 25, 2026

⚠️ For information only. General facts and concepts; WealthWise is not a registered investment advisor and gives no personalized advice. Verify with the sources and consult a licensed professional before acting.

In short — If the total cost of your specified foreign property exceeded $100,000 CAD at any point during the year, you must file Form T1135 with your tax return — penalties for missing it can reach $2,500 per year plus interest.

Investing internationally is increasingly common for Canadians — U.S. stocks, foreign bank accounts, and real estate abroad are all within reach. But the Canada Revenue Agency (CRA) requires you to report certain foreign holdings above a specific cost threshold. That reporting obligation lives in Form T1135, officially called the Foreign Income Verification Statement. Here's what you need to know, in plain language.

What Is "Specified Foreign Property"?

The CRA uses the term specified foreign property to describe the foreign assets that trigger a reporting requirement. The main categories include:

Foreign stocks held in a non-registered (taxable) account — for example, U.S. shares purchased directly through a brokerage in an unregistered account.
Foreign bank accounts — a chequing or savings account held at a bank outside Canada.
Foreign real estate not used exclusively for personal use — such as a rental property in Florida or Europe.
Foreign mutual funds and debt obligations issued by non-resident entities.

The common thread: the asset is issued or located outside Canada and held outside a registered account. Understanding how investment income is taxed in Canada can help you see why the CRA tracks these holdings closely.

Must report (specified foreign property)

Foreign stocks held in a non-registered (taxable) account
Foreign bank accounts (chequing or savings held outside Canada)
Foreign real estate not used exclusively for personal use (e.g. a rental property)
Foreign mutual funds and debt obligations issued by non-resident entities

Excluded (no T1135 needed)

Assets held in registered accounts (RRSP, TFSA, RRIF, RESP)
Canadian-listed ETFs that invest abroad (e.g. VFV on the TSX)
Personal-use foreign real estate (a vacation property not rented out)
Assets used in an active foreign business (specific rules apply)

What Is EXCLUDED from Form T1135

Many everyday investment situations do not trigger the T1135 requirement — and getting this right can save you unnecessary paperwork.

Assets held in registered accounts (RRSP, TFSA, RRIF, RESP): registered plans are explicitly excluded. U.S. stocks inside your TFSA do not count.
Canadian-listed ETFs that invest abroad: if you buy an ETF listed on the Toronto Stock Exchange (TSX) that holds U.S. or global equities, you own units of a Canadian fund — not the foreign shares directly. Those ETF units are not specified foreign property.
Personal-use foreign real estate: a vacation property you use exclusively for your own personal enjoyment (not rented out) is generally excluded.
Assets used in an active foreign business (specific rules apply).

This distinction matters for many Canadian investors: buying VFV (an S&P 500 ETF listed on the TSX) is very different from buying VOO directly on a U.S. exchange.

The $100,000 Threshold — and Why It's Cost, Not Market Value

The obligation to file Form T1135 is triggered when the total cost of your specified foreign property exceeds $100,000 CAD at any point during the tax year. Two key points:

It's the acquisition cost (what you paid), not the current market value that matters. If you paid $110,000 for U.S. shares that are now worth $85,000, you still must file.
The threshold applies at any point during the year, not just on December 31. A brief peak above $100,000 is enough to trigger the requirement.

You must add together the cost of all your specified foreign property — across all accounts and asset types — to determine whether you cross the threshold.

Method	Total cost of foreign property	What you must report
Simplified method	Between $100,001 and $250,000	Holdings by category (funds, bank accounts, shares, etc.) with aggregate totals — less detail required
Detailed method	Over $250,000	Each property individually — country, income earned, gain or loss on disposition, and maximum fair market value during the year

Simplified vs. Detailed Reporting Method

Form T1135 offers two reporting methods based on the total cost of your foreign property:

Simplified method (total cost between $100,001 and $250,000): you report your holdings by category (funds, bank accounts, shares, etc.) with aggregate totals. Less detail required.
Detailed method (total cost over $250,000): you must report each property individually — the country, the income earned, any gain or loss on disposition, and the maximum fair market value during the year.

In both cases, the form is due by the normal filing deadline for your tax return (generally April 30, or June 15 if you are self-employed — though any taxes owed remain due April 30). See the CRA's official T1135 instructions on canada.ca for the most current guidance.

Situation	Penalty
Ordinary late filing	$100 per day of late filing, up to a maximum of $2,500 per tax year
CRA issues a formal demand and you still don't file	Can rise to $1,000 per month, up to $24,000
Gross negligence or wilful default	Additional penalty of 5% of the total cost of the unreported foreign property, on top of interest charges

Penalties for Not Filing T1135

The CRA treats failure to file T1135 seriously. Penalties are structured as follows:

$100 per day of late filing, up to a maximum of $2,500 per tax year for an ordinary late filing.
If the CRA issues a formal demand and you still do not file, the penalty can rise to $1,000 per month, up to $24,000.
In cases of gross negligence or wilful default, an additional penalty of 5% of the total cost of the unreported foreign property may apply, on top of interest charges.

If you missed T1135 filings for prior years, the CRA's Voluntary Disclosures Program (VDP) may allow you to come forward and reduce or eliminate certain penalties — provided the CRA has not already contacted you about those years. This article is for educational purposes only; please consult a qualified tax professional for advice specific to your situation.

Frequently asked questions

My TFSA holds VFV, a TSX-listed S&P 500 ETF. Do I need to file T1135?

No. VFV is a Canadian-listed fund — you own units of a Canadian entity, not U.S. shares directly. Additionally, TFSAs are registered accounts that are explicitly excluded from T1135 reporting. No filing is required in this situation.

I hold Apple shares purchased directly on the NASDAQ in my regular brokerage account. My total cost is $120,000. What do I need to do?

You must file Form T1135 with your tax return. Shares of a foreign company held in a non-registered account are specified foreign property. Since your total cost is between $100,001 and $250,000, you can use the simplified reporting method.

Does the $100,000 threshold apply to market value or what I paid?

What you paid (cost of acquisition), not the current market value. If you purchased foreign equities for $120,000 and they are now worth $75,000, you still need to file T1135 — the trigger is based on cost, not current worth.

What if I forgot to file T1135 for a previous year?

You may be able to use the CRA's Voluntary Disclosures Program (VDP) to come forward without facing the full penalties. You will generally still owe any accrued interest. It is strongly advisable to consult an accountant or tax lawyer before proceeding, as the VDP has specific eligibility rules.

Sources & references

Educational content; verify figures with official sources before acting.