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How Capital Cost Allowance Works (CCA)

I’ve brushed on Capital Cost Allowance (CCA) before when discussing rental property tax deductions and the CCA schedule for the purchase of a computer in 2009.  However, as it can be a fairly complicated topic, I thought I would write a primer and explain the basics of CCA.

Capital Cost Allowance is basically the fancy tax term for claiming the depreciation of a business asset.  Some expenses purchased under a business, like advertising, can be considered a current expense and can be claimed in the current tax year.  Other expenses, like equipment, must be claimed as a capital expense and depreciated over a set schedule defined by the government.  The depreciated amount of the equipment is claimed every year.

According to the governments economics division, the more formal definition of capital cost allowance is:

The cost of depreciable assets, such as buildings, furniture and equipment, acquired for use in business or professional activities cannot be deducted as an upfront expense when calculating net income for tax purposes.  In recognition, however, of the fact that these assets wear out or become obsolete over time and are replaced, the federal government created the capital cost allowance (CCA).  The CCA is a non-refundable tax deduction that reduces taxes owed by permitting the cost of business-related assets to be deducted from income over a prescribed number of years.

Rental Property/Business

For rental properties, the building itself can be depreciated via capital cost allowance.  The downside of claiming CCA on the building itself is that the investor will have to pay it back once the building is sold.  It is generally recommended that CCA is NOT claimed on the building itself, however, you would have to contact a tax pro for your individual situation.

A common question about rental properties is if upgrades or repairs made to the property will count as a current expense or a capital expense.  Generally speaking, if the expense was made to “upgrade” the property, then it should be claimed under the appropriate CCA schedule.  For example, if appliances (class 8 – 20%) were purchased for the rental, then it would have to be depreciated accordingly every year.  However, if the expense was more of a “repair”, such as if the existing refrigerator was broken and someone was hired to fix it, then it can be claimed as a current expense.

Another example is from a reader, he asked if he were to build a fence on a rental property if he could claim it that year.  Under that circumstance, the addition of the fence should be considered a capital expense and depreciated every year.  However, if he were to repair an existing fence, I think it would lean towards being a current expense.

The same rules apply for businesses.  That is, if you purchase a piece of equipment for the business, then it’s most likely to be considered a capital expense.

What are the CCA Rates?

Here is more detailed information about rental properties, CCA classes and and taxation straight from CRA. (here is a nifty CCA table)

How to Calculate CCA

Calculating CCA is fairly straight forward but each category of capital expense has it’s own rate schedule as defined by CRA.  What do you do with the rate given?  There are two methods:

Declining Balance Method

This method is the most commonly used for most asset classes and is fairly simple to calculate.  Note that in the first year, only half the normal CCA rate can be claimed.

Lets go back to our refrigerator example which is class 8 with a 20% cca rate.  Lets say that the fridge was $1000 out of pocket.

Year Capital Cost Capital Cost Allowance (amt to claim)
1 $1,000 $100 (only 1/2 of 20% in first year)
2 $900 $180
3 $720 $144
4 $576 $115.20
5 460.80 92.16
6 $368.64 $73.73
7 $294.91 $58.98
8 $235.93 $47.19
9 $188.74 $37.75
10 $150.99 $30.20

Straight Line Method

The straight line method is more specific to the asset and is defined by CRA.  Using this calculation, the asset is depreciated by a set dollar amount, instead of a percentage, every year.

Final Thoughts

I realize that this tax topic can be a little on the dry side, but it’s important for landlords and business owners alike.  The reason being is that not all expenses are treated the same.  Some expenses can be counted as a current expense but others are capital expenses and need to be depreciated over time.

It’s important to note that this article is meant to be a primer on capital cost allowance.  Any detailed information about your particular situation can be pulled from the CRA site directly or from contacting an accountant.

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FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 61 comments… add one }
  • Archanfel March 18, 2009, 8:55 am

    Not sure why CCA should not be claimed. The claim would reduce tax by the marginal rate whereas capital gain are only taxed at 50%, right? For example, say the house is worth $100,000. Over if I deduct $10,000 a year (hypothetically), I would get $40000 tax refund over 10 years based on a 40% marginal rate. When I sell the house for $120,000 after the 10th year, I would pay capital gain taxes on $120,000 (since the cost was reduced to zero), $60,000 at 40% is only $24000. Also, if I sell the house after I retire, my marginal rate is probably lower, not to mention the compound growth of my tax refunds.

    Am I missing something? Would the CRA ask me to return all tax refund + interest + penalty if I over depreciated the house?

  • john March 18, 2009, 11:05 am

    Thats not quite right.

    When you sell your property it causes CCA recapture. So in the example above you pay full tax rate on the 100k and capital gains on the 20k. What you could do is claim the CCA each year use the tax refund to prepay your mortgage. When the house is sold use the money to pay off the mortgage and the tax bill. This way your saving the interest on the tax refunds.

    All that being said you’re only allowed too claim 4% per year on buildings and you can’t claim anything on the land. so the benefit is very small.

  • nobleea March 18, 2009, 11:16 am

    ok, here’s a scenario for you.
    i’ve changed a condo i used to live in as primary residence to an income producing rental. I don’t expect to keep it very long, maybe another year. I changed the designation (to rental) at a time when house prices were high. I expect to be in a capital loss position when I sell it.

    I assume claiming CCA would be wise in this position, since I wouldn’t have a capital gain, and a capital loss would only be applicable against capital gains?

  • mjw2005 March 18, 2009, 12:30 pm

    You must be doing your taxes right now FT….As I am as well, I am self-employed, and CCA is one of the reason why I go to a pro for my taxes….just a nightmare to keep track of all the values for CCA

    Wish there was an easier system….

  • Elbyron March 18, 2009, 1:10 pm

    Though it doesn’t seem to show up in the “Related Posts” section, there was much discussion of CCA in the article “Rental Property Income Taxes and Deductions” (https://www.milliondollarjourney.com/rental-property-income-taxes-and-deductions.htm). In comment #58, I gave my opinion: “if you’re in a low tax bracket or you plan to sell the property soon, you might not want to claim CCA. This is because in the year you dispose of rental property, you may have to add an amount to your income as a recapture of CCA”. Also see comment #5 in that article for suggestions on when to claim CCA.

    I’m interested to hear what others think about when to claim or when not to claim CCA deductions…

  • elman March 18, 2009, 4:17 pm

    How about a situation where you buy a really old house and rent it out. claim CCA and then when asset = 0 you tore it down and build a new house and sell it. How will you get taxed in that situation ?

  • Sampson March 18, 2009, 5:21 pm

    I’m in a somewhat similar situation to nobleea, regarding appraised market value at the time I began renting.

    With respect the claiming CCA against the building – I see from the CRA link that 5% can be claimed annually. My questions is what happens when you reach 100% – presumably many people will hold their rental properties longer than 20 years. So is the 5% based on the original purchase/assessed value, or will this float with the actual value of the property?

  • Ray Sanchez March 18, 2009, 5:24 pm

    Wow! This was a pretty in-depth article. Thanks for the useful information and taking the time to write this. :)

  • Elbyron March 18, 2009, 5:44 pm

    Sampson,
    Take a look at the chart in the declining balance section. Notice that you deduct 20% based on the remaining value (previous year’s capital cost), not 20% of the original value. So the deductions will get smaller and smaller but the remaining capital cost will not actually reach zero.

    I’m not sure which asset classes use the straight line method (which could drop the capital cost to zero), but rental property always uses the declining balance method.

  • Ed Rempel March 19, 2009, 12:18 am

    Hi nobleea,

    In your situation, it sounds like CCA would be wise, since it is a full deduction vs. only a part deduction for a capital loss.

    If you have not bought a new home and there is doubt as to how long you will hold the condo, you can elect to have your former residence temporarily maintained as an principal residence for up to 4 years.

    Ed

  • Ed Rempel March 19, 2009, 12:26 am

    Hi elman,

    The capital cost will never reach zero, as Elbyron said. If you tear down and build a new house, it will be a terminal loss on the old building and the cost of building will be the cost of the new building.

    For buiildings, each one is a separate asset, and the land is a separate, non-depreciable asset.

    Ed

  • Ed Rempel March 19, 2009, 12:34 am

    Hi Elbyron,

    The best example of an asset for straight-line depreciation would be leasehold improvements. If a tenant has a 5-year leave and spends $50,000 improving their unit (common in commercial leases), then the tenant can claim $10,000/year.

    Landlords sometimes claim leasehold improvements as well, if done for a specific tenant.

    Most of the time, CCA is good to claim, but you cannot claim it unless you have a rental profit. You cannot create or increase a rental loss with CCA.

    The one time you should never claim CCA is if you rent out a part of your home. If you claim any CCA, use lose the principal residence designation and may have to pay capital gains tax plus CCA recapture when you sell your home.

    Ed

  • CanadianFinance March 19, 2009, 2:37 pm

    I believe the only CCA that will apply to me is Class 50 – Computer Equipment… and thankfully that’s 100% for almost 2 years.

  • Ms Save Money March 19, 2009, 6:16 pm

    Does anyone know if the US system is in any way similar to the Canadian system?

  • Ms Save Money March 19, 2009, 6:20 pm

    Ohh and I forgot to add – If I didn’t claim CCA at first, can i do it in the second / third / etc. year since I acquired the asset?

  • Elbyron March 20, 2009, 12:04 pm

    You can begin claiming CCA anytime, but your “deduction room” does not accumulate like in an RRSP, so you can’t claim any deductions on depreciation for previous years. If you really wanted to get those deductions, you might be able to re-file your tax return for a prior year.

    Don’t forget that claiming CCA on a property can come with a hefty penalty when you sell it. If the property has increased in value, then in addition to paying capital gains tax (50% of the gain is added to your income), you will have to pay back 100% of the CCA deductions. All this is added to your income in a single year, which might push you into a higher tax bracket (assuming you’re not already in the highest). So while you can get the deductions each year at your current marginal rate, you might have to pay them back at a higher rate! Now lets say you did something smart with the deductions each year, like paying down your mortgage or making good investments. If you sell the property in 10 years, the savings/earnings that you accumulate could very easily exceed the penalty incurred upon sale. That is why I stated earlier that CCA may be bad if you’re selling soon. Claiming CCA may also be bad if you currently have a low marginal rate (deduction isn’t worth as much) or if you spend the deduction instead of investing it.

  • TStrump March 20, 2009, 4:14 pm

    Great explanation.
    I’m an accountant and this was very easy to understand.

  • Michele April 4, 2009, 4:22 pm

    Help!

    I own a condo I bought in 2007. In 2008 I started creating a small business that I will be running out of my condo. I have some business expenses but as of yet, I do not have any income/sales from it.
    Do I put my condo as a Capitol Cost Allowance?
    If so, how do I do it?

    Thank you!

  • Ed Rempel April 5, 2009, 11:31 am

    Hi Michele,

    You can lose the tax-free status of your principal residence if you claim CCA on it. It sounds like this condo is your home, so you should not claim CCA.

    It might be possible on specific “leasehold improvements”, if you can clearly idenditfy specific renovations just for your business, but otherwise, you should avoid CCA on your principal residence.

    Ed

  • MA April 6, 2009, 10:49 am

    I installed eavestroughing and an air conditioner last year for my rental unit. How do I claim these expenses? What class/percentage do I use for CCA?

    Any help is appreciated.

    MA

  • Brennan April 30, 2009, 2:03 am

    Ed Rempel,

    Thanks for the great post on CCA. When you say in your Post 12 that “The one time you should never claim CCA is if you rent out a part of your home.” you are referring solely to claiming CCA for my home…correct? Claiming CCA for equipment and computers purchased (Class 8 & 45 respectively) will not affect my Principal Residence designation….correct?

  • JC December 29, 2009, 6:55 pm

    Great write-up thank you!

    I have a few follow up questions.
    I recently purchased my primary residence and it has an attached rental suite which came with kitchen appliances and shared laundry.

    1- When claiming CAA, is it “all or nothing”? For example, if possible is there a time when it would beneficial to claim appliances and fixtures as CAA but not the building? Would that avoid gains penalties on the house when sold?

    2- The acquired laundry equipment was in rough shape (not economical to repair) and was replaced with new. Should this be considered a capital cost or repair and deducted as an expense? (The equipment is used by both the tenant and us).

    3- Are tools purchased for the repair and maintenance considered a capitol cost or a deductible expense? Hand tools, lawn equipment, ladders ect…

    Please forgive my current ignorance on this subject.

  • FT FrugalTrader December 29, 2009, 8:02 pm

    JC, my understanding is that equipment and the building are treated as separate entities. You would need to check with a tax pro about the other 2 questions.

  • JC January 4, 2010, 2:03 am

    I often hear that claiming CCA on a rental suite can cause an owner to lose the “principle residence” status of a home and so if one rents a portion of their home they should not claim CAA.

    On the other hand, my interpretation (which is very likely flawed) of CRA documents is that the moment I rent out a portion of my house, I lose “principle residence” status on that portion of the property anyway regardless of any claim of CCA. Is this interpretation true?

    I am most entirely confused on the subject of “principle residence” status. I have looked high and low for strategic information on this subject but resources remain elusive. I’m hopeful that you can shed some light on this subject.

  • Ed Rempel January 24, 2010, 1:16 am

    Hi JC,

    You are allowed to declare one property as your principal residence. If the main purpose of owning that property is to be your residence, then you can rent out part of it and still claim it all as a principal residence.

    Ed

  • Charlie January 25, 2010, 12:46 am

    My question relates to motor vehicle allowance area of CCA. I am familiar with what to do if you purchase a car in 2009 and start using it for rental income right away (2009). What do I put in the columns for CCA if I purchased my car in 2006 for $24000, but did not purchase my first income property until Oct 2009? There are many paragraphs devoted to change from personal to business use for property/home office but not for vehicles so not sure if I should be treating the car the same way.

  • Eva February 4, 2010, 1:16 am

    Marvelous job Ed, answering people’s questions about this confusing topic.

    Now my question is, I am filling out T776 (statement of real estate rentals) and in area A-Calulation of Capital Cost Allowance Claim…do i need to put anything in that area? Previous accountants put the entire cost of our rental townhome in the UCC Start of The Year box and that same amount in the UCC End of Year box. If I am not claiming CCA, i simply enter that same amount this year??? And do i do this each year that i own the rental property until i sell it?

    Thank you in advance.

  • Ed Rempel February 6, 2010, 1:49 pm

    Hi Eva,

    Basically, you are right. If you are not claiming CCA and you owned the property before last year, just enter the class of the building and then put in the UCC carried forward from last year and show the same figure as the end of year. In software, you may have to override the CCA calculated.

    The key thing here is that the asset is the building – not the land. They must be 2 separate assets. You can only claim depreciation on the building – not the land. So you may have to figure a reasonable split between land and building, which is often done based on the proportion used on your property tax. An objective measure is better than a subjective measure.

    For a townhouse, assuming the entire value is the building is probably reasonable, unless it is a freehold townhouse. Usually, you don’t actually own any of the land, so it may be reasonable to assume that 100% of the cost is the building.

    Many people do not claim CCA because it will be recaptured when you sell. Claiming it is often smarter though (as long as it is not your principal residence).

    Claiming the CCA is a tax deferral, which is usually good. Think of it like claiming an RRSP deduction. You could defer the deduction because you are going to have to pay it back when you withdraw the money, but in the mean time, you have the use of the tax saved and you may well be in a higher tax bracket today then when you sell the property.

    Most commonly, we claim the CCA for our clients in order to bring the taxable income of the rental down to zero (unless the client is in a low tax bracket).

    Ed

  • kyle March 4, 2010, 5:24 am

    I have a question for Mr. Ed Rempel, but first, thanks for all the great posts, you really are a help for a lot of people.
    I moved out of my primary residence in July and began renting it out July 1st to move back home and care for my younger siblings and mother. I am having a hard time doing my taxes right now lol trying to figure out my CCA/Value of the home, and whether or not I should even claim it. You made a comment in post #10.
    “If you have not bought a new home and there is doubt as to how long you will hold the condo, you can elect to have your former residence temporarily maintained as an principal residence for up to 4 years.”

    I do not plan to hold the rental much longer. Maybe another year, or 2 at most, for a total of 2.5 – 3 years. How should I go about my CCA for this year? Again, thanks for all your help!!!

  • Mohammad March 6, 2010, 7:10 pm

    I have a question about filling out T776 (statement of real estate rentals). I am a 50% co-owner of a rental property. Do both co owners have to fill out form T776?

    Thanks for your help.

  • kristina March 7, 2010, 12:51 am

    does anyone know if you live up and rent only down(the basement) if you can still claim cca? Also we had more expenses than profit from the rental,..which gives us a rental loss….can we still claim cca? I didnt know you had to pay back when you sell your home? what if you never sold?

  • kristina March 7, 2010, 12:56 am

    does cca for rentals work the same as for employment expenses(vehicle)?

  • Ed Rempel March 8, 2010, 2:50 am

    Hi Kyle,

    I would suggest not to claim CCA in your case. It sounds like your situation probably applies, so that you can file the election to consider your property as still being your principal residence, even though you are renting it out temporarily.

    Are you planning to sell it or move back in?

    If you claim CCA, you can lose your principal residence exemption, which is normally far greater than the temporary deferral from claiming CCA.

    Ed

  • Ed Rempel March 8, 2010, 2:51 am

    Hi Mohammad,

    Yes, you both show it. The form lists partners and the proportion each owns, so that you can show half the income/loss on each of your returns.

    Ed

  • Ed Rempel March 8, 2010, 2:56 am

    Hi Kristina,

    Claiming CCA on your principal residence can result in you losing your principal residence exemption, so claiming it would be a mistake. You cannot use CCA to create or increase a loss anyway.

    CCA is really a deferral, since it is recaptured (fully taxed) whenever you sell, before you calculate your capital gain/loss on sale. You will eventually sell, even if it is on your death.

    Yes, the principals of CCA for rentals are the same as on automobiles, except that it is a different asset class and rate.

    Ed

  • lois April 12, 2010, 4:17 pm

    My sister and I own a rental property jointly. I want to move into it. If it becomes my personal residence, do I calculate CGtax for my share only as a deemed disposition? We never claimed any CCA over the years. Are full amount capital purchases deductible on deemed sale or are they depreciated values?

    Thanks

  • Betty April 27, 2010, 2:35 am

    Ed could you answer this for me? We have a condo in a rental pool. We’ve only had it 2 years but plan to sell soon. I’ve not claimed any CCA but should I on the Class 12 assets or FFE?
    Thank you.

  • Stella April 28, 2010, 7:49 am

    I have a question about Class 12. I have a fitness studio operating out of my home. 2009 was year 1. Is there a difference between claiming all of my small equipment like exercise bands and boxing gloves under my current expenses, or am I required to claim them under Class 12? Administratively speaking, claiming them under Class 12 is a lot more work, but claiming them under “supplies” in business expenses is generating a large expense relative to income because this is year 1. Should I take the time to spell out all these little expenses under Class 12 just to be safe? Any thought about this would be greatly appreciated.

    • FT FrugalTrader April 28, 2010, 7:52 am

      Personally, I would consider exercise equipment for a fitness studio to be a capital cost, therefore depreciated on an annual basis. However, you should double check with an accountant

  • Elizabeth Van Den Hurk August 5, 2010, 12:50 pm

    I am considering buying solar panels. Say my cost is $75,000. Once I own the equipment I enter into a 20 year contract to sell the hydro I produce. CCA is straight line at 50%. Does this mean I can claim under CCA 50% of $75,000 in the first year, then 50% of $37,500 and so on (I think this is a declining balance) or how do I figure out the “set dollar” value. I need this information to decide whether the investment is worthwhile. In this case if the CCA is used only for equipment (not, for example, on a building which I would later sell) and not be worth anything (scrap) at the end of 20 years is the depreciated amount added back on anywhere? Since the euipment I own is independant of the contract I sign is the CCA depreciation tied to the length of the contract?

    ID

  • Lyn April 7, 2011, 9:26 am

    I haven’t seen the rate at 50% for solar equipment. If you search the CRA site, there is a class 43 that is quoted for the FIT program.

  • Amit April 21, 2011, 11:46 am

    Is claiming CCA required for USA rentals?

    Since in Canada claiming the CCA is optional I have never claimed it for my USA rental as in the beginning years I had a loss, and also I know that the price will be much higher when I sell, but I am not sure if I have to claim CCA on the building when filing US tax returns (1040NR) or is it optional in USA too? Can anyone clarify? Thanks in advance.

  • citybug April 27, 2011, 4:30 am

    I own a house and am a massage therapist. Last year I renovated the basement purely for my business and the basement is now my massage therapy clinic. Can I claim the renovation costs? As expenses or as CCA? The renovation would include things like carpets, framing, painting, drywall. I know I can claim the furniture, shelves, etc as CCA. I am not sure if I should claim the renovations – will there be problems when I sell the house later? Thanks for your help!!

  • King K May 1, 2011, 4:53 pm

    I understand if you change use of a rental property to a prinicpal residence you can use a s.45(3) election to defer paying the related tax until such time that you actually sell the property. This is on the basis that you did not claim cca on the property in calculating rental income previously. My question is does this mean you could ot claim any cca whatsoever, or can you claim cca on classes other than buildings (eg. furniture and equipement; I rented out my condo furnished) in order to be able to file the section 45(3) election?
    Thanks in advance.

  • Lilacwind May 7, 2011, 5:17 pm

    Question if a sole proprietor just starting his business in January 2011 purchases a truck for the business in December 2010. Can he claim the truck CCA in 2011 as it was purchased for the new business and he was not self employed in 2010 so did not use the deduction.

  • FT FrugalTrader May 7, 2011, 6:16 pm

    @lilacwind, if the truck was purchased for the business, then yes, the portion of the truck used solely for business can be claimed. My understanding though is that you should track the KM’s used for business when claiming.

  • jryni July 7, 2011, 6:07 am

    FrugalTrader:
    Thanks for your posting. But not very correct about the first year calculation:
    The First year, there are two CCA depreciation applicable:
    First year of Business Rule
    + The current year of purchase rule
    ——————————–
    = Total CCA for the First year CCA

    Couple of accountants over the internet made the same explanation as you did, but I believe the equation above is more accurate, I am not an accountant. jry

  • chrisuae March 15, 2012, 6:31 pm

    Thanks for the article.

    I am currently a non-resident and have some rental income each year from an apartment building in Canada. Should I claim the CCA to reduce non-resident taxes?

    Also, is it better to sell the building while I’m still non-resident or should I sell it when I move back to Canada in a couple of years. I expect that my income for the first year back in Canada will be low as I wouldn’t come back until August and capital gains on the building will be substantial as I bought it for 250K and it’s now worth 750K.

    Thanks

  • Jason March 19, 2012, 3:04 pm

    Hi, great discussion. My first question is exactly the same as post 44. King K. Does anyone know the answer to that one.

    Secondly, please confirm/correct my understanding of the election Section 45 (3). Can one purchase a property as a rental, claim the income, all deductions including property transfer tax, mortgage interest etc, and file an election under Section 45 (3) for from the start, for four years. In that time, no other property is designated as a principal residence and I am a resident of Canada. No CCA claimed on property. In 5th year, move into the property and designate it as my principal residence. The ITA indicates that I can defer the cap gain for the previous four years until I sell; BUT, my question is: Can I not only defer but also claim the Principal Residence Exemption for the first four years of rental property ownership and not have any cap gain?

    Thanks for your time.

  • Alan April 6, 2012, 1:05 am

    Great info. I still have a question though.

    For rental properties I have noticed that my accountant has put many of the large upgrades such as flooring and roofing as a CCA. After reading this I see that that is correct.

    My question is what happens in the year that the property is sold if there is still thousands of non claimed CCA.

  • Gaylene April 12, 2012, 2:38 am

    Question for all:
    I am in process of completing tax return. If I don’t claim CCA on the building, can I still claim CCA on capital expenses (ie: replacement of windows for building)?

  • James December 6, 2012, 2:06 pm

    Very good post but I just wanted to add one thing to help clarify the Principal Residence situation. It is my understanding that if the part of your home you are renting out is a legal self-contained apartment then the principal residence status never applies to that part of the house. As long as you don’t use it as a rental property, such as where a parent or family member moves in the principal residence can still apply.

  • Scuter March 18, 2013, 4:16 pm

    I bought my condo 3 years ago and have been renting it out ever since. This year, I’m going to claim CCA on the building for the first time. I’ve looked in my statement of adjustments and do not see a breakdown between the cost of the land and building. It is just one figure. How do I determine the value of the building? thanks in advance

  • Danielle March 18, 2013, 9:28 pm

    Scuter, your city tax statement should show it and if that fails the city would be able to give you a breakdown (for tax purposes).

  • Val July 16, 2015, 5:12 pm

    HI,
    My first fiscal year was less than 365 days and I bought som computer equipment couple months after registering a corporation. Does it mean that both half-year and first-year rule will apply to me?
    Thank you!

  • Burlington Accountants July 19, 2015, 5:13 pm

    Hi Val,
    In the year an asset is purchase, the half-year rule applies to the calculation of CCA (i.e. only ½ of the CCA may be claimed). In the first year of business, the CCA claim must be prorated by the number of days in the first fiscal year. In other words, yes, both will apply.

  • Alex February 11, 2016, 3:17 am

    It’s a great example about the fridge CCA claim. The CCA claim was stopped on the year 10 but theoretically it could go further to claim CCA as $30.20 x 20% =$6.04 for year 11, etc.. I’m wondering if the CCA claim period should be aligned with the accounting approach as e.g. straight-line $1,000 / 10 years as here or it could be independent from it. Why did you stop with CCA on the year 10?
    Thanks

  • TF May 2, 2016, 2:12 am

    I own a triplex, live in one unit and rent the other two units. Would claiming CCA on the portion of the building that pertains to the other two units affect my principle residence gains exemption if an when I sell? Also how would you go about determining what value to place on the other units including the common areas?

    If CCA was only taken on appliances purchased for those two other units I imagine that wouldn’t impact the principal gains residence. Need some reassurance.

  • Justin March 1, 2017, 7:07 pm

    If I start a small business and use my personal vehicle that I fully own before starting the business in the business, can I use CCA on my vehicle? And, if so, what is the cost of the vehicle I would use CCA on?

    So, does anyone know??

    Thanks

  • Mani March 30, 2017, 1:09 am

    Thanks for the great post on CCA. I did business from my home (princvipal residence) for 2 years out of total 6 years of ownership (5% of the house area designated as for business use) and claimed CCA for computer equipment only and did not claim any CCA for the building itself. I’ve sold my house now and I want to know that do I have to pay Capital gains on the 5% of my house used for business? Does claiming CCA for equipment and computers purchased (Class 8 & 45 respectively) affect my Principal Residence designation?
    Thanks in advance.

  • hong March 22, 2018, 12:56 am

    I bought a house for parent to live on for 16 years buy at price 200 000. I never declair rental or CCA. Now i rent it out and have income. Value now is 900.000 . I have no intent to sell it later. Which number should i use for CCA.
    Thank

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