Do I Have to Report Foreign Property?
If the total cost of your specified foreign property exceeded one hundred thousand Canadian dollars at any point in the year, yes. The threshold is measured on cost, not market value, and the form is required whether or not the property produced any income.
- The answer:: The test is total cost above one hundred thousand Canadian dollars at any time in the year, not the value at year end.
- The trap:: Assuming US shares held at a Canadian broker are exempt. They are specified foreign property and count toward the threshold.
- The recommendation:: Check the cost figure each year rather than the balance, because a portfolio can cross the threshold without the value doing so.
Where the AI summary above gets this wrong
"You only need to file a T1135 if your foreign investments earned income."
That's surface-true. Here's what it misses:
- The trigger is cost, not income — The form is required once cost exceeds the threshold at any point in the year, whether or not a dollar of income arose.
- Foreign shares at a Canadian broker count — Where the shares are held does not change what they are. US and other foreign equities are specified foreign property.
- Registered accounts are excluded — Property held inside an RRSP, RRIF or TFSA does not count, and neither does personal-use property such as a foreign vacation home you do not rent out.
01 What counts as specified foreign property
The category covers funds held outside Canada, shares of non-resident corporations, interests in non-resident trusts, foreign real property held for investment, and debts owed by non-residents. Foreign shares held in a Canadian brokerage account are included.
Several important things are excluded: anything inside a registered account, personal-use property such as a foreign home you do not rent, and property used in an active business carried on by you.
Source: Leaving Canada (emigrants)
02 How the threshold is measured
The test is total cost, in Canadian dollars, at any time during the year — not market value and not the year-end figure. A portfolio bought for ninety thousand dollars that has grown to two hundred thousand does not meet the test on cost alone.
Conversely a purchase and sale within the year can trigger it even if nothing is held on December thirty-first. Currency conversion is at the rate on the relevant date, which can push a holding over the line on exchange movement alone.
Shows: what a given amount of additional taxable income costs you in tax at your marginal rate, and what you keep. Ignores: provincial surtaxes, credits that phase out with income, and any effect on income-tested benefits.
Source: Leaving Canada (emigrants)
03 The penalty for a form with no tax
The T1135 reports information; it does not compute tax. Failing to file it nonetheless attracts a penalty for each month it is late, up to a stated maximum, and a substantially larger penalty where the failure is knowing or grossly negligent.
The normal reassessment period is also extended by three years for the related income where the form was not filed or was incomplete. Neither consequence depends on any tax being owed — the residency questions around this are in registered accounts and non-residency.
A simplified reporting method is available where total cost sits below a stated level, which asks for categories and country codes rather than a listing of every holding. Most individual investors qualify for it, and the difference between the two methods is the reason the form looks more daunting than it is.
Source: Capital gains (line 12700)
The exclusion for registered accounts is the reason most Canadians never meet this, and also the reason the ones who do are usually surprised. The threshold is on cost, so it is entirely possible to cross it in a year when the portfolio fell in value.
FAQ
Do I have to report foreign property?
Yes, on a T1135, if the total cost of specified foreign property exceeded one hundred thousand Canadian dollars at any time during the year, whether or not it produced income.
Do US stocks in my Canadian brokerage account count?
Yes. Shares of non-resident corporations are specified foreign property regardless of where the account is held. Only holdings inside registered accounts are excluded.
What is the penalty for not filing?
A penalty accrues for each month the form is late up to a stated maximum, with a substantially larger penalty for a knowing or grossly negligent failure, and the reassessment period is extended by three years.
Sources
Regulator references
- Leaving Canada (emigrants) · Canada Revenue Agency · 2025Departure tax, deemed disposition and how registered accounts are treated on emigration.Last verified: 2026-09-07
- Capital gains (line 12700) · Canada Revenue Agency · 2025How capital gains and losses are calculated, reported and carried.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.