T1135 reporting could become less burdensome for many Canadians under a Budget 2026 proposal that would double the threshold for filing the foreign-property information form.
The federal government proposes increasing the threshold from $100,000 to $200,000 and raising the threshold for simplified reporting from less than $250,000 to less than $500,000.
The proposal appears in the tax-administration measures in Budget 2026, published November 5, 2026.
It is not yet a completed legislative change.
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What would change for T1135 filers
Form T1135 is the Foreign Income Verification Statement used by certain Canadian residents, corporations, trusts and partnerships that hold specified foreign property above the reporting threshold.
Under the current CRA rules, the filing requirement generally applies when the total cost amount of specified foreign property exceeds $100,000 at any time during the year.
Budget 2026 proposes replacing that $100,000 threshold with $200,000 for taxation years that end after 2026.
The government says the change would exempt approximately one-third of current T1135 filers from the obligation to file.
Taxpayers with foreign property above the new filing threshold could also benefit from a broader simplified-reporting band.
| Measure | Current threshold | Budget 2026 proposal |
|---|---|---|
| Form T1135 filing threshold | More than $100,000 | More than $200,000 |
| Simplified reporting threshold | Less than $250,000 | Less than $500,000 |
| Proposed application | Current rules | Taxation years ending after 2026 |
Who could benefit from the proposed change
The proposal could affect Canadian residents who hold investments, bank accounts, rental property or other qualifying assets outside Canada.
Specified foreign property can include funds and intangible property held outside Canada, as well as shares of non-resident corporations and certain income-producing real estate.
Personal-use property is generally excluded, meaning a foreign vacation property used primarily for personal enjoyment may not be treated the same way as an income-producing rental property.
The CRA says the threshold is based on the cost amount of the property, generally its adjusted cost base, rather than its fair market value.
That distinction means taxpayers should not assume that a change in the market value of an overseas asset alone determines whether Form T1135 is required.
The CRA provides questions and answers about Form T1135 for taxpayers reviewing how the rules apply.
How simplified T1135 reporting works
Under the existing two-tier system, taxpayers whose specified foreign property cost more than $100,000 but stayed below $250,000 throughout the year can generally use Part A of Form T1135.
Part A requires less detailed information than the detailed reporting method in Part B.
Taxpayers who reached $250,000 or more at any point during the year generally use the detailed method under the current rules.
If the proposal becomes law, the simplified-reporting ceiling would rise to less than $500,000.
That would allow many taxpayers who remain subject to the form to provide information through the less detailed reporting method.
The government describes the measure as a way to reduce compliance work while retaining information about larger foreign holdings.
What the proposal does not change
The proposal would change an information-reporting requirement, not the basic obligation to report taxable foreign income.
The CRA states that income earned from foreign property must be included for Canadian tax purposes regardless of whether the property is below the T1135 filing threshold.
In other words, a taxpayer who does not have to file Form T1135 could still have to report interest, dividends, rent or other taxable income from foreign assets.
The proposal also does not mean that every overseas asset is automatically included in the calculation.
Eligibility depends on whether the property is specified foreign property and how the cost amount is determined under the applicable rules.
When the proposed T1135 change could take effect
Budget 2026 says the higher thresholds would apply to taxation years that end after 2026.
That means taxpayers should continue following the existing rules for years covered by the current $100,000 and $250,000 thresholds unless Parliament approves a different implementation date or wording.
The government would still need to advance the measure through the legislative and implementation process before the new thresholds could be relied on as law.
Until then, taxpayers with questions about foreign investments, rental properties or overseas accounts should review the current CRA instructions or consult a qualified tax professional.
Why the change matters
The government estimates that approximately one-third of current T1135 filers would no longer have to submit the form if the proposal is enacted.
Other filers would remain subject to the reporting requirement but could qualify for simplified reporting at higher asset levels.
For Canadians with foreign holdings near either threshold, the practical effect will depend on the final legislation, the taxation year involved and the cost amount of each qualifying property.
The proposal is part of a broader Budget 2026 package aimed at simplifying tax deadlines, filings and interactions with the Canada Revenue Agency, including changes discussed in tax-filing proposals.
CTCNews.ca will update this report if the government publishes draft legislation or confirms when the revised thresholds will be available on Form T1135.
Frequently Asked Questions
What is the proposed new T1135 filing threshold?
Budget 2026 proposes raising the threshold from more than $100,000 to more than $200,000 of specified foreign property measured by cost amount.
What would happen to the simplified-reporting threshold?
The simplified-reporting threshold would rise from less than $250,000 to less than $500,000 under the proposal.
When would the proposed T1135 changes apply?
The budget says the changes would apply to taxation years that end after 2026, subject to legislative approval.
Does not filing T1135 mean foreign income is tax-free?
No. Foreign income may still have to be reported and included in Canadian taxable income even when Form T1135 is not required.
Is the T1135 threshold based on market value?
Generally, the threshold is based on the cost amount of specified foreign property, not its fair market value.
Fact-Checked: Key figures, thresholds, timing and eligibility details were checked against Budget 2026 and current Canada Revenue Agency Form T1135 guidance. ([budget.canada.ca](https://budget.canada.ca/2026/report-rapport/chap6-en.html?utm_source=openai))
Disclaimer: This article describes a proposed tax measure and is not a substitute for personalized advice from a qualified Canadian tax professional.