Amount of capital cost allowance you can claim
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Amount of capital cost allowance you can claim
The amount of capital cost allowance (CCA) you can claim depends on the type of property you own and the date you acquired it. Group the depreciable property you own into classes. A specific rate of CCA generally applies to each class.
Note
If you use depreciable property to earn income from a short-term rental, you cannot claim the non-compliant amount of CCA. For more information, go to Line 9367 – Non-compliant amount of capital cost allowance (CCA) for short-term rentals.
You can find the most common classes of depreciable rental property and the rates that apply to each class under Rental – classes of depreciable property.
For the most part, use the declining balance method to calculate your CCA, as it is the most common one. This means that you apply the CCA rate to the capital cost of the depreciable property. Over the life of the property, the rate is applied against the remaining balance. The remaining balance declines each year that you claim CCA.
Example
Last year, Abeer bought a rental building for $60,000. On her income tax and benefit return for last year, she claimed a CCA of $1,200 on the building. This year, Abeer bases her CCA claim on the remaining balance of $58,800 ($60,000 - $1,200).
You do not have to claim the maximum amount of CCA in any given year. You can claim any amount you like, from zero to the maximum allowed for the year. If you do not have to pay income tax for the year, you may not want to claim CCA. Claiming CCA reduces the balance of the class by the amount of CCA claimed. As a result, the amount of CCA available for you to claim in future years will be reduced.
Note
If you are a member of a partnership, the partnership has already determined the amount of CCA you can claim. If you receive a T5013 slip, Statement of Partnership Income, your CCA amount is already included in box 110. If you are a member of a partnership that does not need to issue this slip, the total partnership CCA will be shown on the financial statements you receive.
Limits on CCA
In the year you acquire rental property, you can usually claim CCA only on one-half of your net additions to a class. This is the half-year rule (also known as the 50% rule) which is explained under Column 15 – Adjustment for current-year additions subject to the half-year rule. The available-for-use rules may also affect the amount of CCA you can claim.
In the year you dispose of rental property, you may have to add an amount to your income as a recaptured capital cost allowance or deduct an amount from your income as a terminal loss. You can find more information on recapture and terminal loss under Column 7 – UCC after additions and dispositions.
If you own more than one rental property, you have to calculate your overall net income or loss for the year from all your rental properties before you can claim CCA. If you are a partner, include the net rental income or loss from your T5013 slip in the calculation. Combine the rental income and loss from all your properties, even if they belong to different classes. This also applies to furniture, fixtures, and appliances that you use in your rental building. You can claim CCA for these properties, the building, or both.
You cannot use CCA to create or increase a rental loss. Do not apply the half-year rule to accelerated investment incentive properties or zero-emission vehicles.
Example
Salvador owns three rental properties. Two of these properties are Class 1 buildings and one is a Class 3 building. All the buildings contain Class 8 appliances. Salvador's net rental income from these properties is as follows:
- Building 1 (Class 1), net rental income of $1,500
- Building 2 (Class 1), net rental income of $2,000
- Building 3 (Class 3), net rental loss of $4,000
Salvador has an overall net loss of $500 ($1,500 + $2,000 - $4,000). Since he is not allowed to increase his rental loss by claiming CCA, he cannot claim any CCA on his rental buildings or appliances.
For more information about loss restrictions on rental and leasing properties, see Interpretation Bulletin IT-195, Rental Property – Capital Cost Allowance Restrictions, Interpretation Bulletin IT-443, Leasing Property – Capital Cost Allowance Restrictions, and its Special Release.
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- Date modified:
- 2025-06-05