Does Foreign Vacation home need to be declared on T1135 form?

[rjoshi123]

Before becoming resident of Canada I had bought a condo in an under construction
building in my home country, now that I became resident I intend to use it as my vacation home/personal
property, (once construction is completed).

My questions
1) As per what I read I don’t have to inform CRA of the same using T1135 form.
I would appreciate if any expert can confirm this..

2) Also can a couple have two vacation homes in the same city, one of husband and one of wife?

3) If answer to first question is yes then I should be able to sell it while I am resident of Canada without any trouble. Please confirm.

 

[paras1991]

Vacation property is not reported on T1135. As each taxpayer files their own T1135, so a couple can have two vacation homes.

Scenario-If an individual owns a condominium in Florida that has a cost amount of $120,000, is the property specified foreign property for the purposes of Form T1135 if the condominium is:

a-used exclusively by the taxpayer as a vacation property?

b-rented out for eight months of the year with a reasonable expectation of profit and kept for personal use the other four months?

c-rented out for part of the year without a reasonable expectation of profit for the purpose of recovering a portion of condominium expenses?

Specified foreign property does not include personal-use property. Personal-use property is generally defined as property owned by the taxpayer that he or she or a related party uses primarily for personal and enjoyment purposes. The CRA takes the view that “primarily” means more than 50%. Whether a particular property is primarily for personal use and enjoyment is a question of fact that is determined on a case-by-case basis.

In situation (a), the individual does not need to report the condominium since it is held primarily for personal use and enjoyment.

In situation (b), the property is not held primarily for personal use and enjoyment. As a result, it is a specified foreign property and has to be reported on Form T1135.

In situation (c), if there is no reasonable expectation of profit and the individual is merely recovering part of the condominium expenses, the CRA will consider it a personal-use property. As such, the property is not a specified foreign property and is excluded from the reporting requirements of Form T1135.