Do newcomers pay tax on money they bring from their home country?

Capital is not income

This is the fear behind the question, and the answer is reassuring: Canada has no tax on arriving. The savings you accumulated in your home country — from years of salary, property sales, or family support — were already earned before you became a Canadian tax resident, and Canada does not reach back to tax them.

Moving that money into a Canadian bank account does not make it taxable either. Whether the transfer happens the week you land or five years later, the principal amount stays out of Canadian income tax. You do not report your transferred savings as income on your tax return.

What does get taxed after you arrive?

Once you are a resident of Canada for tax purposes, Canada taxes your worldwide income — income from anywhere on earth, earned from your residency start date onward. So the tax question about your home-country money is really about what that money earns after you arrive:

• Interest on foreign bank accounts
• Dividends from foreign shares
• Rent from property abroad
• Capital gains on foreign investments sold after you became a resident

All of this must be reported on your Canadian tax return and is taxed in Canada, even if the money never leaves your home country. Income you earned abroad before your residency date is not taxed — but you still report it in the information section of your return, because the CRA uses it for benefit calculations.

One important detail: for property you already owned when you arrived, your cost for Canadian tax purposes is generally its fair market value on the date you became a resident. Only the growth after that date counts as a Canadian capital gain.

What is Form T1135 and the $100,000 rule?

Form T1135, the Foreign Income Verification Statement, is a separate reporting obligation — it does not create tax by itself, but it tells the CRA what you own abroad. You must file it if, at any time in the year, the total cost of your specified foreign property exceeded $100,000 CAD.

Note the emphasis on cost, not market value. Specified foreign property includes:

• Bank accounts held outside Canada
• Shares of foreign corporations, whether held directly or through a foreign broker
• Land and buildings outside Canada, such as a foreign rental property
• Interests in foreign mutual funds, trusts, or partnerships
• Precious metals and similar assets held abroad

Penalties for not filing when required are significant, so take this seriously even though the form itself does not generate a tax bill.

What foreign property is excluded from T1135?

Not everything abroad counts. You do not report:

• Personal-use property, such as a family home abroad that you use personally, your car, or household belongings
• Property used exclusively in carrying on an active business
• Property held inside registered accounts like an RRSP or TFSA

The family home you left behind in your country of origin is personal-use property, not a reportable foreign investment — but if you rent it out, it becomes reportable.

Do I need to file T1135 in my arrival year?

Here is a piece of good news: you do not have to file Form T1135 for the tax year in which you first became a resident of Canada. This first-year exemption is written into the form's own instructions.

But the exemption only delays the paperwork, not the record-keeping. For any foreign property you own at arrival, the cost amount used in future years is its fair market value on the day you became a resident. So from day one, record the value of your foreign bank accounts, investments, and rental properties in Canadian dollars — you will need those numbers when the reporting obligation starts in year two.

What about money my family sends me?

Cash gifts received from family members are generally not taxable as income to the recipient in Canada. If your parents wire you money as a gift, you do not report it as income. The same principle applies going forward: once you are a resident, it is the income earned on gifted money — interest, dividends, rent — that becomes taxable, not the gift itself.