You will need to report three things:
1. Rental
Income
2. Foreign
Tax Paid on Rental Income, and
3. Foreign
Property Information Reporting on the T1135
Foreign Rental Income
First, complete the T776 Statement of Real Estate Rentals.
1. Using
the navigate menu up top, select Income > Rental Property
2. Enter
all relevant fields in the T776
NOTE: CRA will not allow you to file your return using NETFILE
if the rental address doesn’t have a Canadian province and postal code entered.
As a workaround, we suggest that you enter the foreign address
on the “Address” lines, and the foreign city and country in the “City” field.
Finally, input your residential province and postal code in the corresponding
province and postal code fields.
Foreign Tax Credit
1. Select
Find in the top right hand corner
2. Type
"foreign" and select Foreign Tax Credit
3. Select
Yes to the Foreign Taxes page.
4. Enter
the country your foreign property is located
5. In
the section “Foreign real property income:”, enter the gross rental income
amount, related expenses and the amount of foreign taxes you paid.
NOTE: The amount of income entered on the Foreign Tax Credit
form will not add additional income to your return. It is needed, however, to
properly calculate the foreign tax credit for the country you specified.
T1135
1. Using
the navigate menu up top, select Income > Other Income Sources > T1135
2. Follow
the prompts on the screen.
NOTE: The T1135 is information reporting only. We recommend
choosing the simplified method if your assets are over $100K but under $250K.
Again, you will need to enter the income corresponding to each
of your foreign property. Income entered on the T1135 will not affect your
income tax return.
Lastly, the T1135 needs to be filed separately from your income
tax return. When you are ready to file, you will see an additional button to
file your T1135 using CRA’s NETFILE service.
