Many immigrants and dual citizens are getting hit with CRA penalties for foreign property they didn’t know they had to report.
The Rule
If you’re a Canadian resident and owned foreign property worth more than $100,000 CAD at any point in the year — a foreign bank account, stocks, rental real estate, even inherited shares in a family business abroad — you must file Form T1135 with your tax return, due the same day as your regular return (April 30, or June 15 if self-employed).
Why Immigrants Get Caught Off Guard
New Canadians often keep small accounts or inherited assets back home without realizing these now come with Canadian paperwork. The CRA can penalize you even if you already paid tax on the income those assets earned — T1135 is a separate obligation.
How the CRA Finds Out
Canada shares financial account data with 100+ countries under the OECD’s Common Reporting Standard. In many cases, the CRA already knows about a foreign account before you file anything.
The Penalties
- Late/non-filing: $25/day, up to $2,500, plus interest
- Gross negligence: $500/month, up to $12,000
- After a CRA demand to file: $1,000/month, up to $24,000
- Prolonged non-compliance (2+ years): up to 5% of the unreported property’s cost
Note: penalties are based on original cost, not current value — so even a losing investment can trigger a filing requirement.
What to Do
If you’re behind, the CRA’s Voluntary Disclosures Program lets you come forward before an audit starts. Do it right, and you may owe only tax plus interest — no penalties, no prosecution.
Bottom line: If you hold foreign property worth over $100,000, check whether T1135 applies to you — and talk to a tax professional if you’re unsure.
General information only, not tax or legal advice.
