Does the Budget 2026 T1135 change affect my US property or accounts?

I run a currency exchange company, so I have an interest in how you convert your money. The rates and fees below are dated and sourced so you can check them yourself.

Every winter, clients who are buying a place in Florida or Arizona, or who already own one, ask me the same thing after they finish asking about the exchange rate: do I have to tell the CRA about this property? The budget that came out on November 5 changed one number in that answer, and within a day I had people telling me they no longer need to file anything. Some of them are right. Most of them never had to file in the first place, and a few still do. This article sorts out which group you are in, using only what the Budget and the CRA have published. I am not an accountant, and every section ends the same way: check your own position with one.

What does Budget 2026 change on Form T1135?

Two numbers move. The threshold above which you must file Form T1135 goes from $100,000 to $200,000, and the ceiling for the short version of the form goes from under $250,000 to under $500,000, according to Chapter 6 of Budget 2026, read on November 6, 2026. Nothing else about the form changes. What counts as specified foreign property, how you measure it, and what you owe tax on all stay the same.

Form T1135 is the Foreign Income Verification Statement. The CRA requires it from Canadian residents who, at any time in the year, own specified foreign property with a total cost of more than $100,000, as set out on the CRA Form T1135 page. It is an information return. It tells the CRA what you hold outside Canada; it does not by itself create a tax bill. The form has two parts: a simplified Part A where you tick boxes by type of property, and a detailed Part B where you list each property.

The Budget says the higher threshold would free roughly a third of current filers from the form. That is a Department of Finance estimate, not a CRA count. Here is what it means band by band, with cost measured in Canadian dollars.

Status on November 6, 2026. Current rules from the CRA Form T1135 page; proposed rules from Budget 2026, Chapter 6 and the Tax measures annex. If you already file, your accountant can tell you which row you sit in.

When does the $200,000 threshold start?

Not this tax season. The Budget applies the change to taxation years that end after 2026. For a person, the tax year is the calendar year, so the first year the new number can apply to is 2027, and the first return it can appear on is the 2027 return you file in spring 2028. Your 2026 return, the one you file in spring 2027, still uses $100,000.

The second thing to know is that this is a proposal. The Budget documents describe it as a measure “proposed in Budget 2026”. It needs a bill to pass Parliament before it is law. Budget tax measures usually do pass, often in the form announced, but until the bill receives Royal Assent the $100,000 rule is the one on the books. I will update this article when that happens. If you are deciding whether to file for 2026, the answer today is the old threshold. Confirm with your accountant.

Does my Florida vacation home count?

If you and your family are the only people who use it, no, and that was true before the Budget. The CRA excludes personal-use property from specified foreign property. In the CRA’s questions and answers on Form T1135, personal-use property is “property owned by the taxpayer that he or she or a related party uses primarily for personal or enjoyment purposes”, and the CRA takes “primarily” to mean more than 50 per cent.

The CRA uses a Florida condo as its example. A condo with a cost of $120,000 that the owner uses only as a vacation home does not have to be reported. The purchase price does not matter. A $600,000 house in Naples that only your family stays in is treated the same way.

So for most of the snowbirds I talk to, the honest answer to “does the Budget change help me” is that it does not touch you, because you were never inside the rule. Where it starts to matter is the moment the property earns money, or you hold other US assets alongside it. The next three sections cover those cases. If the home has ever been rented, confirm with your accountant.

Does my US rental property count?

Yes. A property rented to tenants with a reasonable expectation of profit is held to earn income, not for personal use, so it is specified foreign property and it counts toward the threshold. This is the group the Budget change was written for. Two examples, assuming the rental is your only foreign property and cost is in Canadian dollars:

• A rental that cost $150,000. Today you file, using the simplified Part A. Under the proposal you would not file at all, starting with the 2027 return.
• A rental that cost $260,000. Today you file the detailed Part B because you are at or above $250,000. Under the proposal you still file, but you drop to the simplified Part A because you are under $500,000.

Two things stay the same in both cases. The rental income still goes on your Canadian return, and the US side still has its own rules on withholding and filing. The T1135 is the Canadian paperwork about the asset, nothing more. Ask your accountant to confirm your cost amount and which part of the form applies to you.

What if I use the property myself and rent it out?

It depends on why you rent it, and the CRA has answered this with the same Florida condo. The example gives three situations for a condo that cost $120,000:

1. Used only by the owner as a vacation home. Not reported.
2. Rented out for eight months of the year with a reasonable expectation of profit, and kept for personal use the other four. Reported, because it is not held primarily for personal use.
3. Rented for part of the year with no reasonable expectation of profit, only to recover some of the condo expenses. Not reported. The CRA treats it as personal-use property.

The CRA adds that whether a property is primarily for personal use is “a question of fact that is determined on a case-by-case basis”. In plain terms: renting your place to a neighbour for three weeks in May to cover the condo fees does not turn it into a rental business. Listing it for the whole season while you stay home does. Situation three is the one most snowbirds live in, and it is also the one that depends on the facts. Walk your accountant through your actual rental weeks and what you charged.

How does joint ownership change the threshold?

Each owner tests their own share of the cost, not the whole property. The CRA’s guidance on co-owned property says each party may have to file “based on the cost amount of the property owned by each of them”.

Take a US rental that cost $180,000, where two spouses each paid half. Each spouse’s share is $90,000. Neither is over $100,000 today and neither would be over $200,000 under the proposal, so neither files, as long as that share is the only specified foreign property each of them holds.

One caution. The share that counts is what each person actually contributed, not an assumed fifty-fifty split. If one spouse paid for the whole property and the other is on title for convenience, the cost can sit with the one who paid. That is an attribution question, so ask your accountant about it before you decide you are under the threshold.

Do my US bank account and US investments count?

Yes, and they are added together with everything else you hold outside Canada. The threshold is tested on the total cost of all your specified foreign property, not on each asset on its own. The CRA’s own example is a person with $75,000 of shares in a non-resident company and $35,000 in a US bank account. Neither is over $100,000 alone, but the total is $110,000, so the form is required.

This is the group that benefits most quietly from the Budget. Someone with a $70,000 US chequing account and $60,000 in a US brokerage account has $130,000 in total. They file today, on the simplified Part A. Under the proposal they would be under $200,000 and would stop filing from the 2027 return.

Two things catch people here. First, US shares or US-listed funds held in an account at a Canadian brokerage are still specified foreign property. The CRA says shares of non-resident corporations “should be reported, regardless of whether the shares are held through a broker”. Owning Apple or Microsoft in your Canadian non-registered account counts. Second, the CRA excludes specified foreign property held in an RRSP or a TFSA, so a US stock inside your RRSP is outside this entire discussion. Ask your accountant how your other registered accounts are treated. Add up every US account and holding outside your registered plans before you decide which band you are in.

What do people most often get wrong?

Four things, and the Budget does not change any of them.

Canadian dollars, not US dollars. The threshold is a Canadian dollar figure. A US property that cost US$160,000 is well over $200,000 in Canadian dollars at the exchange rates of the last few years, so do not read the US price against the Canadian threshold. The cost amount is a Canadian dollar figure, which is why the exchange rate you got on the day you converted the money is the number your accountant will ask for, sometimes years later.

Cost, not market value. The CRA is direct: the threshold “is based on the cost amount”, which is generally the adjusted cost base “and not the fair market value”. A condo you bought for $90,000 in 2012 that is worth $300,000 today is still a $90,000 property for this test.

Mortgage is not deducted. The CRA’s example is a property bought for $500,000 with a $50,000 down payment and the rest on a mortgage. The cost amount is $500,000, not $50,000, and the owner files. Your equity has nothing to do with it.

Paperwork is not tax. Being under the threshold means you skip a form. It does not mean the income is tax-free. The CRA states that residents must report “all the income they earn from foreign property, regardless of the cost amount of foreign property”. Rent, interest, dividends and the gain when you sell all still go on your Canadian return, converted to Canadian dollars.

The Budget moved the line for the form. It did not move the line for the tax. If you earn a dollar from a US property or a US account, you still report it, whether or not you ever fill in a T1135.

Rahim Madhavji, President, Knightsbridge Foreign Exchange Inc.

Does this affect me?

Answer these in order and stop at the first question where the answer is yes.

1. Are all your US holdings inside a registered plan such as an RRSP or TFSA? If yes, there is nothing to file, now or later. If no, go to question 2.
2. Is your only US property a home your family uses more than half the time, and which you either do not rent out or rent only to cover costs? If yes, it is not specified foreign property and nothing changes for you. If no, go to question 3.
3. Add up the cost, in Canadian dollars, of every other US asset: rental property, bank balances and shares outside registered plans. Is the total $100,000 or less? If yes, you do not file now and the change means nothing to you. If no, go to question 4.
4. Is the total between $100,001 and $200,000? If yes, you file for 2026 and, if the proposal passes, you stop from the 2027 return. This is the group the Budget was written for.
5. Is the total between $250,000 and $499,999? If yes, you keep filing but move from the detailed Part B to the simplified Part A.
6. Is the total $200,001 to $249,999, or $500,000 and over? If yes, nothing changes for you.

Take your answers to this list, and your purchase records, to your accountant.

What should you do now?

1. Do nothing different for your 2026 return. The $100,000 threshold still applies to the return you file in spring 2027.
2. Work out your cost amount in Canadian dollars for every US asset outside your registered plans. Use the purchase price and the exchange rate at the time, not today’s value and not today’s rate.
3. Keep your conversion records. The wire confirmation that shows the rate you got when you moved the money south is the document that proves your cost amount. If a property is sold years later, the same record sets your gain in Canadian dollars. If you have lost it, ask whoever converted the money for a copy now, while they still have it.
4. Keep filing if you are over the line, because the penalty for not filing is real and a missed form can extend the CRA’s window to reassess you by three years when foreign income is also unreported.
5. Ask your accountant two questions: which band am I in for 2026, and will the 2027 change move me.
6. Get the exchange rate right on the next transfer. Whether you are sending a down payment, paying a property manager or bringing sale proceeds home, the rate you accept is a cost that never shows up on any tax form. At Knightsbridge Foreign Exchange Inc. we quote a markup of 0.1% to 0.8% depending on the amount (checked November 6, 2026), with free outgoing wires, and every confirmation shows the rate you received so your records are complete.

If you have a US purchase, a property sale or a season of expenses coming up, compare our USD to CAD rate with what your bank is offering and see the difference on your own amount. For the property side, our currency exchange guide for property buyers walks through deposits, closings and bringing money home.

Knightsbridge Foreign Exchange Inc. is registered with FINTRAC as a money services business (registration M09819788), licensed as a money services business by Revenu Québec (licence 12115), and registered with the Bank of Canada under the Retail Payment Activities Act.

This article is general information for Canadian residents who own property or accounts in the United States. It is not tax, legal, accounting or financial advice. It describes the Form T1135 rules as published by the CRA and the proposals in Budget 2026 as tabled on November 5, 2026. Confirm current rules with the Canada Revenue Agency, and your own position with a qualified cross-border accountant. Related reading: what counts as specified foreign property, the 183-day rule for snowbirds and opening a US bank account as a snowbird.