An heir in Toronto or Calgary who inherits an apartment in Italy is usually focused on the Italian side of the file: the succession declaration, the notarial deed, the apostilled documents. The Canadian side gets less attention, and one Canadian rule catches people by surprise — not because it is obscure, but because the answer is often the opposite of what people assume.
The CAD 100,000 threshold
Canadian resident individuals who, at any time in the year, own "specified foreign property" with a total cost of more than CAD 100,000 must file Form T1135, the Foreign Income Verification Statement, along with their income tax return. The threshold is measured against cost, not current market value, and it is a reporting obligation — it does not by itself create any tax owing.
Why a family home often falls outside it
This is the detail worth knowing before assuming the rule applies: "specified foreign property" does not include personal-use property — property that you, or someone related to you, use mainly for personal enjoyment rather than to produce income. A share in a parent's apartment in Italy that the family keeps for visits, and never rents out, is personal-use property. If that describes the property you inherited, it falls outside the T1135 reporting requirement regardless of its value, and no form is due on account of it.
The position changes the moment the property produces income. If the apartment is rented out — even partly, even to cover its own running costs — it stops being personal-use property and becomes reportable specified foreign property once the CAD 100,000 cost threshold is crossed. Several co-heirs who each inherit a fractional share still measure the threshold against the property's total cost, not against each heir's share, so co-ownership does not automatically keep anyone under the line.
What "cost" means for something you inherited
You did not buy the property, so there is no purchase price to point to. For Canadian tax purposes, property received from an estate generally takes as its cost the fair market value the property had at the date of death — the same value typically used for the Italian succession filing, converted to Canadian dollars at the exchange rate on that date. Keep the valuation used for the Italian declaration; it is the figure a Canadian accountant will need.
What filing actually involves
T1135 asks for the type of property, the country it is in, its cost, any income it produced in the year, and any gain on disposition if you sold it. It is filed with your T1 return, so it follows the same deadline — April 30 for most individuals, June 15 if you or a spouse are self-employed, though any balance owing is still due by April 30. Missing it is not a minor matter: the basic penalty is $25 for each day the form is late, with a minimum of $100 and a maximum of $2,500, and it climbs considerably higher if the CRA concludes the omission was deliberate. The penalty applies for simply failing to disclose, whether or not any Canadian tax was actually owed on the property itself.
This is separate from whether you owe Canadian tax
Filing T1135 and owing Canadian income tax are two different questions. A property kept for personal use and never sold triggers no Canadian tax during the years you hold it, reportable or not. A rented property's net rental income is taxable in Canada as it is earned, and a sale — of a personal-use property or an income-producing one — can trigger a Canadian capital gain, quite apart from whatever the sale means for Italian purposes. T1135 is a disclosure form, not itself a calculation of tax due, but the CRA uses it to see what it should be checking.
What changes the answer
Two things can turn a personal-use property into a reportable one without anyone deciding to change course deliberately: renting it out, even briefly or informally, and a change in who actually uses it, if use shifts from the family to a tenant. If your plans for the property are still open — keep it, rent it, eventually sell it — it is worth revisiting the T1135 question each time those plans firm up, rather than assuming the answer from the year you inherited still holds.
Getting the two files to match
The Italian succession file and the Canadian tax file use the same facts — the date of death, the property's value on that date, who the heirs are — but serve different authorities with different rules. Our guide on the Italian succession declaration for a foreign heir covers the Italian side; the Canadian reporting question above sits alongside it, not inside it. A Canadian accountant familiar with foreign reporting, working from the Italian valuation, is usually enough to settle it. If anything on the Italian side of the estate is still unresolved, you can ask for a free consultation about your specific situation.