Assets You Own Before Arriving: Your Cost Base Is Their Value on the Day You Land

The deemed acquisition rule, and why you should have your assets valued before you land

Scott Tang, CPAUpdated 2026-11-052026 rules4 min read

Say you already owned a home, stocks, funds or shares in a company in China before you immigrated, and you sell them later while living in Canada — Canada doesn't tax the increase in value from before you immigrated. On the day you become a Canadian tax resident, the tax law treats you as having "bought" most of the assets you own at their market value on that day, and that market value is your cost in Canada. The condition: you must be able to prove the market value on that day.

Value on landing

Most assets: market value on the day you become a resident = your Canadian cost

Gains before landing

Not taxed in Canada

Gains after landing

Reported in Canada when you sell

Losses too

Losses that arose before you landed aren't recognized in Canada either

An example

No valuation kept

A home bought in 2015 for RMB 2 million

You land in 2026 with no proof of its value

Sold in 2030 for RMB 4 million

The CRA may question your cost, and it is hard for you to prove what the home was worth when you landed

Valuation kept

The same home

Appraised at RMB 3.5 million on the day you land; at that day's rate of 5.2 = C$673,077

Sold in 2030 for RMB 4 million; at that day's rate of 5.0 = C$800,000

Capital gain of about C$126,923 (before expenses; the exchange rates are assumed). You can't subtract in RMB first and then convert the difference

Which assets this applies to

Asset	Cost reset to market value on landing Most assets	Doesn't apply The original cost stays
Homes in China or Hong Kong	✓	—
Stocks and funds in China, Hong Kong or the US	✓	—
Shares of a company in China	✓	—
Deposits and wealth management products (foreign currency)	✓Canadian-dollar cost set at that day's exchange rate	—
Canadian real estate you owned before immigrating	—	✓It was already taxable Canadian property
Shares of a Canadian private company you owned before immigrating	—	◐Depends on whether they are taxable Canadian property (for example, if their value comes mainly from Canadian real estate); where the company is incorporated doesn't decide it
Rights under the MPF, pensions and similar plans	—	◐Not necessarily reset to the value on landing; it depends on the nature of the plan

Homes in China or Hong Kong

✅ Cost reset to market value on landing: ✓
⚠️ Doesn't apply: —

Stocks and funds in China, Hong Kong or the US

✅ Cost reset to market value on landing: ✓
⚠️ Doesn't apply: —

Shares of a company in China

✅ Cost reset to market value on landing: ✓
⚠️ Doesn't apply: —

Deposits and wealth management products (foreign currency)

✅ Cost reset to market value on landing: ✓Canadian-dollar cost set at that day's exchange rate
⚠️ Doesn't apply: —

Canadian real estate you owned before immigrating

✅ Cost reset to market value on landing: —
⚠️ Doesn't apply: ✓It was already taxable Canadian property

Shares of a Canadian private company you owned before immigrating

✅ Cost reset to market value on landing: —
⚠️ Doesn't apply: ◐Depends on whether they are taxable Canadian property (for example, if their value comes mainly from Canadian real estate); where the company is incorporated doesn't decide it

Rights under the MPF, pensions and similar plans

✅ Cost reset to market value on landing: —
⚠️ Doesn't apply: ◐Not necessarily reset to the value on landing; it depends on the nature of the plan

What evidence to keep

Real estate
An appraisal report, records of sales in the same complex around the same time, or a valuation from a real estate agent, with the date stated.
Stocks and funds
Account statements and screenshots of closing prices for the day you land (or the nearest trading day).
Company shares
Financial statements from around the time you land; if the amounts are large, get a formal valuation report.
Exchange rate
The Bank of Canada exchange rate for the day you land, recorded in Canadian dollars together with the market value.

Points to watch

The T1135 uses this cost too
From your second year, the test of whether your foreign assets are over $100,000 also uses their market value on landing.
If you were a Canadian resident before
If you lived in Canada before, left and came back, the rules are more complex. See "Coming Back: Becoming a Canadian Resident Again" in this series.
Plan before you land
If you have significant assets, the result can differ depending on which ones you deal with before landing and which after. See "A Tax Checklist Before You Land" in this series.

How Sheng Qian CPA can help

List your assets
We work with you to list all the assets you own before landing, and mark which ones the rule applies to and what evidence to keep.
Build a Canadian-dollar cost schedule
Using the market values and exchange rates on the day you land, we prepare a cost schedule that you will use when you sell and when you file the T1135.
Ready to use when you sell
Each year's return, and any sale later on, are calculated from this schedule. For fees, see "What Sheng Qian CPA Can Do for Newcomers and People Leaving Canada: Support on Arrival and on Departure" in this series.

Sources

CRA: Newcomers to Canada (immigrants) · Completing your return for newcomers
CRA: Capital gains (T4037)

Disclaimer

This article is general information only and is not tax advice. Everyone's situation is different; please consult a CPA about your specific arrangements. Service fees are as set out in our written quote.