T1135 — Foreign Property Reporting for Canadian Florida Owners

What is Specified Foreign Property (SFP)?

T1135 requires reporting of Specified Foreign Property (SFP), defined in s.233.3 of the Income Tax Act. For Canadian owners of Florida property, the relevant categories of SFP are:

• Real property outside Canada — Your Florida condo, house, or rental property. Note: this includes both pure investment properties and properties you use personally (snowbird homes).
• Funds held in foreign bank accounts — If you hold a US bank account with more than CAD $100,000 equivalent (as part of your overall foreign property portfolio).
• Shares of foreign corporations — If you hold the Florida property through a US LLC or corporation, the LLC/corporation shares are SFP.

Important exclusions: property used exclusively for personal use and enjoyment is excluded from T1135 if it is not held for investment or income-earning purposes. However, if you rent the property even for a single week per year, it generally becomes an income-earning property and the personal use exclusion no longer applies.

The $100,000 cost threshold — how it works

The T1135 threshold is triggered when the total cost of all SFP exceeds CAD $100,000 at any point during the year. Key points:

• Cost, not FMV — The threshold uses the original cost of the property (purchase price + closing costs + legal fees + acquisition-related improvements), converted to CAD at the exchange rate on the date of acquisition. If your Florida property cost USD $350,000 when the CAD/USD rate was 1.30, your T1135 cost base is approximately CAD $455,000 — far above the threshold.
• All SFP combined — Add up all foreign property: Florida home, US bank accounts, US brokerage accounts. If the combined cost exceeds CAD $100,000, T1135 is required.
• At any point during the year — Even if you sold the property mid-year and the year-end balance is zero, you must file T1135 if the cost exceeded the threshold at any point during the year.

Simplified vs. detailed reporting

T1135 has two reporting methods depending on total cost:

• Simplified method (total cost between CAD $100,001 and CAD $250,000): You report the type of property, country, and income earned — no detailed asset-by-asset breakdown required. This applies to most Canadian snowbird owners with a single mid-range Florida property.
• Detailed method (total cost above CAD $250,000): For each SFP asset, report: description, country, maximum cost during the year, year-end FMV (in Canadian dollars), income earned, and gain/loss on disposition. For a Florida property, this means annual FMV tracking in CAD, which requires currency conversion at year-end exchange rates.

When and how to file T1135

T1135 is filed as part of (or alongside) your annual T1 individual income tax return. The due date is the same as your T1 deadline:

• April 30 for most Canadians
• June 15 if you or your spouse is self-employed (but tax owing is still due April 30)

T1135 can be filed electronically through CRA My Account (NetFile) or on paper. CRA requires the form to be filed separately from the T1 — it is not embedded in the T1 form itself.

If you have not been filing T1135 for prior years during which you owned a Florida property above the threshold, you may be eligible for the CRA's Voluntary Disclosure Program (VDP), which can reduce or eliminate penalties for prior non-compliance. The VDP requires that: (1) the disclosure is voluntary (CRA hasn't contacted you about the non-compliance yet); (2) the disclosure is complete and accurate; and (3) there is at least one year of non-compliance to correct.

Penalties for late or missing T1135

The 10-year extended reassessment period for T1135 non-disclosure is particularly significant — CRA can reassess your entire return (not just the T1135) for any year in which T1135 was required but not filed.

Practical tips for Canadian Florida owners

• Start tracking from acquisition — Record the purchase price in USD, the exchange rate on closing day, and all acquisition costs. Your T1135 cost base is fixed at acquisition and doesn't change with market values.
• Property held in a US LLC or corporation — You don't report the property directly; you report the LLC/corporation shares as SFP. The cost is your investment in the entity, not the underlying property value. Get tax advice on whether holding through a US entity triggers additional CRA filing obligations (T1134 for controlled foreign affiliates).
• Exchange rate to use — Use the Bank of Canada's annual average exchange rate for FMV reporting, or the rate on the date of the transaction for cost-base calculations. CRA accepts either the daily rate or the annual average for FMV purposes.
• VDP if you've missed prior years — Voluntary disclosure is significantly better than waiting for CRA to find the gap. A Canadian cross-border tax advisor can prepare the VDP package.