Grants, subsidies, and other incentives or inducements

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Grants, subsidies, and other incentives or inducements

You may get a grant or subsidy from a government or a government agency to buy depreciable property. When this happens, the grant reduces the cost of the land and depreciable property proportionately.

Example

You buy a rental property at a cost of $200,000 ($50,000 for the land and $150,000 for the building) and receive a $50,000 grant.

Since the $50,000 grant is split in the same proportion between the land and building as the cost of the property, the purchase price of the land is reduced to $37,500 and the purchase price of the building is reduced to $112,500.

Do this before you enter the capital cost in Column 3 - Cost of additions in the year of Part B or Part C. For more information, see Interpretation Bulletin IT-273, Government Assistance - General Comments.

You may get an incentive from a non-government agency to buy depreciable property. If this happens, you can either include the amount in income or subtract the amount from the capital cost of the rental property.

If the purchase price of your property was reduced due to poor quality or other reasons, see Folio S3-F4-C1, General Discussion of Capital Cost Allowance, for more information on how to calculate your capital cost.

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Date modified:
2017-01-03