World income
Residents report world income, meaning income from all sources inside and outside Canada, in Canadian dollars.
Ask your adviserWhen I let the home after handover, how is the rent reported and what can I deduct?
Personal use or rental
In the CRA’s examples, a foreign property held primarily for personal use is not reported, while one rented out with a reasonable expectation of profit is specified foreign property.
Ask your adviserHow would a mix of personal use and letting be treated?
Form T1135
Residents file when specified foreign property costs more than CAD 100,000 at any time in the year, due with the income tax return. A simplified part applies below CAD 250,000 and detailed reporting at or above it. Penalties apply for late filing and false statements.
Ask your adviserDoes my purchase cross the threshold, and when does the cost amount count?
Foreign tax credit
You may claim if you were resident at any time in the year and included foreign income on which you paid foreign tax. The credit is the lesser of the foreign tax paid and the Canadian tax on that income; use Form T2209, and Form T2036 for provinces and territories outside Quebec.
Ask your adviserWill any UAE tax be charged that I could credit?
Tax convention
Finance Canada lists the Canada–UAE convention, signed on 9 June 2002, among treaties in force. Article 6 lets income from immovable property be taxed in the state where the property is.
Ask your adviserHow do the convention and Canadian rules apply to rent and gains?
UAE side
Under Cabinet Decision No. 49 of 2023, an individual’s income from selling or letting UAE property without needing a licence is not treated as a business activity for UAE Corporate Tax.
Ask your adviserWhat does that mean for my foreign tax credit claim?
Owning UAE property, or holding a UAE residence permit, does not by itself make you non-resident in Canada or remove world income or T1135 reporting. Take your circumstances to a Canadian tax adviser before assuming any change.