Do I have to file T1135 in my first year as a Canadian tax resident?
No β in the first year you become a Canadian tax resident, you are generally exempt from filing Form T1135 under section 233.7 of the Income Tax Act (provided you were not previously a Canadian resident). But you must still answer the foreign-property question on your T1 honestly, and from your second year on you must file if your specified foreign property cost more than $100,000 at any time in the year.
The first-year exemption
Section 233.7 exempts a newcomer from T1135 for the taxation year in which they first become resident in Canada. The logic: you just arrived, and the form is meant to track ongoing offshore holdings of established residents.
| Situation | T1135 in year 1? |
|---|---|
| First-time immigrant, never resident before | Exempt |
| Returning Canadian who was resident in a prior year | Exemption may NOT apply β check carefully |
| Became resident mid-year | Exempt for that year |
The T1 question still applies
Your T1 asks whether you owned specified foreign property over $100,000. Answer it truthfully even in year one β the exemption is from filing the form, not from the question. A wrong answer here can undermine a later due-diligence defence.
From year two: the $100,000 test
Starting in your second year of residence, file T1135 if the total cost of your specified foreign property exceeded $100,000 at any point in the year. Cost means what you paid, not current market value. The deadline matches your return: April 30 (June 15 if self-employed).
Frequently asked questions
What if I held over $100,000 abroad but only arrived in December?
Still exempt for that arrival year under s.233.7 (if first-time resident). File from the next year.
Does my foreign apartment I live in count toward $100,000?
Personal-use property is excluded from specified foreign property, so your foreign home does not count.
I was a Canadian resident 10 years ago, left, and came back. Am I exempt?
Probably not β the exemption targets first-time residents. A prior period of residence can disqualify you, as a Tax Court case on this exact point confirmed.
Sources
- https://bbs.fcgvisa.com/t/t1135/49134
- https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/foreign-reporting-requirements.html (CRA, T1135)