What property qualifies
In order to qualify, in addition to other limitations, clean technology (CT) property must:
- Be equipment that is situated in and intended for use exclusively in Canada
- Not have been previously used or acquired for use or lease, for any purpose before acquisition by the taxpayer
If you lease the CT property to another person or partnership
If you lease the property to another person or partnership, additional leasing requirements must be met.
The property must be both:
- Leased to a taxable Canadian corporation or a mutual fund trust that is a real estate investment trust or a partnership where all the members are taxable Canadian corporations
- Leased in the ordinary course of carrying on a business in Canada by the taxpayer whose principal
business is any or a combination of the following:
- Selling or servicing property of that type
- Leasing property
- Lending money
- Purchasing conditional sales contracts, accounts receivable, bills of sale or chattel mortgages or hypothecary claims on movables, bills of exchange or other obligations representing all or part of the sale price of merchandise or services
Eligible CT property
The CT ITC is available for investments in the following types of CT property:
- Equipment used to generate electricity from solar, wind and water energy
- Stationary electricity storage equipment that does not use any fossil fuel in operation (such as batteries and pumped hydroelectric storage)
- Active solar heating equipment, air-source heat pumps and ground-source heat pumps
- Non-road zero-emission vehicles and related charging and refueling equipment that is used primarily for such vehicles
- Equipment used exclusively for the purpose of generating electrical energy or heat energy (or a combination of both), solely from geothermal energy, unless it is part of a system that extracts fossil fuels for sale
- Concentrated solar energy equipment
- Small modular nuclear reactors
Technical guidance for CT property
Technical guidance for CT property is available from Natural Resources Canada (NRCan).
Additional tax incentives
Additional tax incentives are available for CT property that is also described in Class 43.1 and 43.2. These tax incentives could include Accelerated capital cost allowance (ACCA).
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