CRA indicates that only one Reg. 1101(5b.1) election is required where work on an addition to a non-residential building extends over more than one year

Although the accelerated (declining balance) capital cost allowance of 6% or 10% p.a. is only available for non-residential buildings acquired since March 18, 2007, an election can be made under Reg. 1101(5b.1) to deem an addition to an old building to be a separate new building, thereby accessing the accelerated CCA rate on the addition. CRA considers that if there are two separate additions, an election must be made on each separately and each addition will fall into a separate class – whereas if the work on a single addition extends over more than one year (or there is a subsequent second addition to further extend the first addition), the election can be made at the end of the first year with respect to the work done to date (although this might have no immediate impact under the available-for-use rules) and the subsequent work will fall into the same separate deemed new class without any need to make a second election.

Neal Armstrong. Summary of 13 March 2017 External T.I. 2016-0626641E5 Tr under Reg. 1101(5b.1).