Who must file, and who must not
Form T1135, the Foreign Income Verification Statement, is a federal information return: the rules are identical in every province, and it changes nothing about how much tax you owe. It exists so the Canada Revenue Agency can see Canadian residents' foreign holdings. You file it with your income tax return when, at any time in the year, the total cost of your specified foreign property exceeds 100,000 CAD.
For a Florida owner, everything turns on one distinction. A property held primarily for personal use and enjoyment, the classic snowbird home you occupy every winter and lend to family in the shoulder season, is personal-use property and is not specified foreign property at all. It never goes on a T1135, whatever it cost. A property held primarily to earn rental income is specified foreign property, and its cost counts toward the 100,000 CAD threshold.
Verified fact: the CRA's published position is that personal-use property is property used primarily, meaning more than 50 percent, for personal or enjoyment purposes by the taxpayer or a related person. Specified foreign property excludes personal-use property. Source: CRA, Questions and answers about Form T1135, consulted June 9, 2026.
The corollary deserves to be said plainly, because the opposite claim circulates in snowbird forums: renting your Florida home out for a few weeks does not automatically convert it into specified foreign property. The test is the primary use across the year. A condo you occupy five months and rent three weeks remains primarily personal. A condo you rent eight months and visit in May has crossed the line. If your pattern sits near the boundary, treat the classification as a judgment call worth professional advice rather than a box to guess at.
Opinion: when the use pattern hovers around half and half, document the days each year, in a calendar you keep, and get a cross-border accountant's written view once. The filing itself is cheap; the penalty exposure and the audit friction of getting it wrong for several years in a row are not.
What counts as specified foreign property
Specified foreign property is defined in section 233.3 of the Income Tax Act, and the definition reaches far beyond real estate. For a Canadian with a Florida footprint, four categories do most of the work.
First, real property outside Canada that is not personal-use property and not used exclusively in an active business: the rented condo, the investment duplex, the lot held for resale. Second, funds held outside Canada: the U.S. bank account that receives your rent, measured by its cost amount, which for a deposit account is essentially its balance. Third, foreign securities: U.S. stocks and bonds held in a U.S. brokerage account, including U.S. securities held in some Canadian accounts' foreign registers. Fourth, shares or interests in non-resident entities: if you hold your Florida property through a U.S. LLC or corporation, what you own is not the building but the entity, and that interest is specified foreign property.
What stays out, beyond the primarily personal home: property inside registered plans such as RRSPs and TFSAs, U.S. securities held through Canadian mutual funds, and assets used exclusively in an active business. The pattern is consistent: the form targets passive foreign holdings a Canadian resident controls directly.
The 100,000 CAD threshold: cost, combined, at any time
Three words carry the whole threshold, and each one catches someone every year.
Cost, not market value. The threshold uses the cost amount: what you paid, including closing costs and acquisition expenses, converted to Canadian dollars at the exchange rate of the acquisition date, not today's rate and not today's value. A condo bought at 350,000 USD when the rate was 1.30 carries a cost amount of about 455,000 CAD forever, regardless of what the market does afterward.
Combined, not per asset. You total every piece of specified foreign property you hold: the rented condo, the U.S. bank balance, the U.S. brokerage account. The threshold applies to the basket, so a 60,000 CAD condo share plus a 45,000 CAD U.S. account obliges you to file even though neither alone reaches 100,000 CAD.
At any time in the year. One day above the threshold is enough. Selling in February and holding nothing by December does not erase the February obligation; the year of a sale is itself a filing year, with the disposition reported.
One timing relief exists: an individual is exempt from T1135 for the year they first become resident in Canada. From the second year on, the ordinary rules apply.
Simplified versus detailed reporting
The form has two regimes, and the boundary is 250,000 CAD.
The simplified method, Part A, is open to you only if your total specified foreign property stayed under 250,000 CAD throughout the entire year. You tick the types of property held, name the top three countries by cost, and report the total income the properties produced. No asset-by-asset detail.
The detailed method, Part B, applies the moment the basket touched 250,000 CAD at any point. There you list each property: description, country, highest cost amount during the year, cost at year end, income, and any gain or loss on disposition. For a rented Florida condo bought at 455,000 CAD, Part B is where you live: the categories that matter are real property outside Canada and, if applicable, funds held outside Canada.
In both regimes the income you show must reconcile with the rental income in your return. The CRA matches the T1135 against the T776 rental statement and the rest of the T1; a T1135 showing a property and a return showing no income from it is exactly the mismatch the form was built to flag.
When and how to file
The T1135 is due the same day as the income tax return it accompanies: April 30 for most individuals, June 15 when you or your spouse report self-employment income, with any balance owing still due April 30. It can be filed electronically with the return through certified software, or on paper to the CRA's Ottawa Technology Centre if filed separately. File it even in a year the property produced no income: the obligation follows the holding, not the cash flow.
Keep the supporting trail with your tax records rather than attaching it: purchase statement and closing costs for the cost amount, the Bank of Canada rate used at acquisition, year-end account statements, and the rental ledger that supports the income figure. The conversion rule for the threshold is the acquisition-date rate; the income lines follow the ordinary rules for reporting foreign income, typically the rate in effect when the income arose or the annual average.
Penalties: small form, real teeth
The base penalty for filing late or not at all is mechanical and does not care why.
Verified fact: the penalty for failure to file Form T1135 by the deadline is 25 CAD per day, with a minimum of 100 CAD and a maximum of 2,500 CAD per tax year, reached after 100 days. Higher penalties apply where the failure continues after a formal demand or amounts to gross negligence. Source: CRA, Table of penalties for foreign reporting, consulted June 9, 2026.
Two features make this harsher than it looks. The penalty applies per year, so a Florida owner who never knew about the form and is caught after six years faces six maximums, 15,000 CAD, before interest. And it applies even when no tax was avoided: the T1135 is an information return, so a perfectly tax-compliant landlord who reported every dollar of rent but skipped the form still owes the penalty.
The exit for past omissions is the Voluntary Disclosures Program: applied for before the CRA contacts you, it can relieve penalties for prior years in exchange for complete and accurate filings. A multi-year omission is precisely the situation it exists for, and precisely the conversation to have with a cross-border accountant rather than improvise.
How T1135 fits the rest of your reporting
The form is one tile in a three-jurisdiction mosaic. The table places it; each cell links to the guide that develops it. T1135 is federal Canadian law, identical for a Quebec, Ontario, or Alberta owner; only your regular provincial return rides along with the federal T1.
| Obligation | Federal CA (CRA) | Federal US (IRS) | State (FL) |
|---|---|---|---|
| Declare the holding itself | T1135 if specified foreign property over 100,000 CAD cost | No equivalent for the property alone | None |
| Report rental income | Worldwide income on the T1, with the T776 rental statement | 1040-NR with Schedule E, usually under the section 871(d) net election documented by Form W-8ECI | No state income tax; tourist development tax and sales tax on short-term stays |
| Avoid double tax | Foreign tax credit for U.S. tax paid | Treaty coordination | Not applicable |
| On sale | Report the gain; T1135 shows the disposition | FIRPTA withholding and the 1040-NR for the sale year | Documentary stamp taxes at closing |
A worked example: the rented Boca condo
Claire and Antoine, Ontario residents, bought a Boca Raton condo in 2019 for 350,000 USD, all in, when the rate was 1.30: a cost amount of about 455,000 CAD, owned equally, so 227,500 CAD of cost each. Since 2024 the condo has been rented ten months a year through a manager, and they use it themselves in May. Primary use: rental. It is specified foreign property for both of them.
Each spouse runs the threshold on their own holdings. Claire holds her half of the condo, 227,500 CAD, plus a U.S. account whose balance peaked at 16,000 USD, about 21,600 CAD at an illustrative 1.35; her basket exceeded 250,000 CAD during the year, so she files Part B, the detailed method, listing her share of the condo and the account. Antoine holds his 227,500 CAD half and nothing else: over 100,000 CAD but under 250,000 CAD throughout the year, so Part A's tick-the-box method suffices for him. Same condo, two different forms, both correct. Typical range: the 1.35 conversion is illustrative; use the Bank of Canada rate for your own dates.
Each files the T1135 with the same return that carries their half of the rental result on the T776, after the U.S. side has been handled on the 1040-NR. Nothing in the form changes their tax; skipping it would have put each of them on the 25 CAD per day meter to 2,500 CAD apiece, per year, for an obligation their accountant could discharge in twenty minutes.
Common mistakes
The recurring T1135 errors among Florida owners are nearly all definitional.
- Reporting the purely personal snowbird home. A property used primarily for personal enjoyment is not specified foreign property. Filing it does no legal harm, but it misstates your affairs and invites questions a correct return would not.
- Believing one rented week flips the property. The test is primary use over the year, more than 50 percent, not any rental at all. The claim that a single week of rent makes the home reportable is folklore.
- Forgetting the U.S. bank and brokerage accounts. The threshold is the combined basket. The rent-collection account routinely pushes a borderline file over 100,000 CAD.
- Using market value instead of cost. The threshold and the form run on cost amounts at acquisition-date exchange rates. Appreciation does not create an obligation; cost does.
- Using this year's exchange rate on a 2019 purchase. The cost amount was fixed in Canadian dollars on the acquisition date and stays fixed.
- Skipping the form in the year of sale. The threshold is tested at any time during the year, and the disposition itself belongs on the form.
- Assuming the accountant filed it. The T1135 is a separate form with its own transmission and its own penalty. Confirm it was actually transmitted, every year, in writing.
Annual checklist
- Classify the Florida property for the year just ended: primarily personal or primarily income-earning, with the day counts to prove it.
- Total the cost amounts of all specified foreign property: property share, U.S. accounts, U.S. securities, entity interests.
- If the total exceeded 100,000 CAD at any time, confirm which spouse or co-owner crosses the threshold on their own share.
- Determine the method: Part A only if the basket stayed under 250,000 CAD all year, Part B otherwise.
- Reconcile the income on the T1135 with the T776 and the U.S. return before anything is transmitted.
- File the T1135 with the return by the return's own deadline, and obtain confirmation it was transmitted.
- Archive the cost documentation and the exchange rate used at acquisition with the year's tax file.
- If you discover missed years, see an accountant about the Voluntary Disclosures Program before the CRA writes first.
Frequently asked questions
We only rent the condo three weeks a year. Do we file?
If the property is used primarily, more than half, for your own enjoyment, it is personal-use property and stays off the T1135. The three weeks of rent still belong on your tax returns in both countries; the property itself does not go on the form.
The condo is in a U.S. LLC. What do we report?
The LLC interest, not the building. Shares or interests in a non-resident entity are specified foreign property in their own category, at the cost of your investment in the entity. Holding Florida property through an LLC has other Canadian tax consequences worth separate advice.
My spouse and I own it together. One form or two?
The threshold applies per taxpayer, each on the cost of their own share plus their other foreign holdings. It is common for one spouse to owe a T1135 and the other not, or, as in the example above, for the two to file under different methods.
I just moved to Canada with a Florida house. Do I file this year?
Not for the year you first became a Canadian resident: individuals are exempt for that first year. The obligation starts with the following tax year if the property is then specified foreign property over the threshold.
The property earned nothing this year. Still file?
Yes, if the cost threshold was crossed. The obligation follows ownership, not income, and a nil-income year is reported as such.
I have never filed it and we have rented for years. Now what?
Do not simply start filing quietly going forward. The Voluntary Disclosures Program exists for exactly this file, can relieve penalties for the back years, and only works if it reaches the CRA before the CRA reaches you. Take the file to a cross-border accountant this season.