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If you live in Canada and own a house, condo or land abroad, you pay Canadian tax on the income it earns, and you file a form called T1135 once the property cost more than $100,000. That’s the foreign property tax picture in two lines. The details depend on what you use the place for.
When do you have to file the T1135?
The form is a report, not a tax bill. It asks the CRA to see what you hold outside Canada. You file it if the total cost of your specified foreign property was more than $100,000 at any time in the year. Cost means what you paid, not what the place is worth today.
A holiday home you and your family use for fun doesn’t count. The CRA treats property used mainly for personal enjoyment as personal-use property, and it stays off the form. A flat you rent out is different. If you expect to make a profit from it, it’s reportable, even if you also stay there a few weeks. If the rent only covers the costs and you never expect a gain, the CRA treats it as personal use.
Picture Anil in Mississauga, who bought an apartment in Kerala as an investment and rents it out. Say it cost $180,000 in Canadian dollars. That’s over $100,000, so he files. Add a second flat that cost $80,000 and the total is $260,000, which pushes him from the simpler report to the detailed one described next.
What goes on the form and when is it due?
| Total cost of foreign property | What the CRA asks for |
|---|---|
| Over $100,000, under $250,000 all year | Part A, a simpler report where you tick the type of property |
| $250,000 or more at any time | Part B, with details on each property |
| Personal-use property | Left out of the total |
The form is due on the same day as your income tax return, and you file it even when you owe nothing. The CRA’s own page on the foreign income verification statement says the same. Penalties apply for filing late or leaving things out. We didn’t copy the amounts here because the CRA lists them on its own penalties page, so check that page before a deadline slips.
How is foreign rental income taxed in Canada?
Canada taxes residents on what they earn anywhere in the world. Rent from a foreign property goes on your return with your other income, and the cost threshold doesn’t matter. The CRA says you report income from foreign property whatever its cost. A $60,000 flat that throws off rent still has to be declared, although it never triggers the T1135.
Put the figures in Canadian dollars. We couldn’t confirm a single CRA exchange rate for this page, so look at the T1135 and T776 guidance for the rate rules before you convert.
The extra tax depends on your other income. With an $80,000 salary in Ontario, $10,000 of net foreign rent adds about $2,965 of tax, which is 29.7%. At $20,000 of net rent it adds about $5,959. Someone earning $40,000 would pay far less on the same rent. You can test your own numbers in the rental income tax calculator.
Can you claim credit for tax paid abroad?
Often, yes. If the other country taxed the same income, you may claim a federal foreign tax credit using form T2209, and the result goes on line 40500 of your return. It lowers your Canadian federal tax. It doesn’t pay you back the foreign tax, and the credit has limits that the CRA explains in its folio on the subject.
Keep the foreign tax slips or assessments. If your other country uses a different tax year, line the dates up before you start.
Where do people trip up on foreign property?
Forgetting the small stuff is the usual problem. A foreign bank account that holds rent, shares in a foreign company and the flat itself all count toward the $100,000. Add them up together.
The other slip is selling. A gain on a foreign property is a capital gain in Canada, and a sale abroad can lead to tax in both places. The capital gains tax calculator shows the Canadian side. We hedge on the inclusion rate: for 2026 it is 50% as far as we know, but the CRA hasn’t published it on a page we could cite. The proposed rise to two-thirds was cancelled in the federal government’s release of 21 March 2025.
Also, the income tax calculator is the quickest way to see your whole year once the foreign rent is added, and the marginal tax rate calculator shows what the last dollar of rent costs you.
Two things we couldn’t confirm: whether the property tax you pay to a foreign town is deductible as a rental cost in your case, and how the CRA treats a property split between family use and rent. Read the CRA T776 guide or ask a tax preparer who handles foreign property.
Does a mortgage or a loss change the filing?
The T1135 turns on the cost of the property, not on how much you still owe on it, so a big mortgage abroad doesn’t shrink the figure. A year with a rental loss doesn’t switch the form off either. If the cost is over the line at any point in the year, you file, and it’s worth getting the paperwork right the first year so later years are a copy-and-update job rather than a scramble at tax time.
Where this information comes from
The $100,000 and $250,000 thresholds, the personal-use rule and the foreign tax credit come from CRA pages on form T1135 and form T2209, read in September 2026. The tax examples come from the 2026 data in our calculators. We’re an independent site, and no government body is behind it.
Frequently asked questions
Do I need the T1135 for a holiday home abroad?
Not if you and your family use it mainly for personal enjoyment. The CRA leaves personal-use property out of the $100,000 total.
Is foreign rent taxed in Canada?
Yes. Canadian residents report income from foreign property on their return, whatever the property cost.
What if I owe tax in both countries?
You may claim a federal foreign tax credit on form T2209 and enter it on line 40500. It has limits, so check the CRA guidance.
When is the T1135 due?
On or before the due date of your income tax return, even if no tax is owing.
Does the cost include today's value?
No. The threshold uses what you paid, the cost amount, not the current market value.
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