Type of vehicle you own or lease

For tax purposes, there are four types of vehicles you should know about. They are motor vehicles, passenger vehicles, zero-emission passenger vehicles and zero-emission vehicles.

The kind of vehicle you use may affect the expenses you can deduct. If you own or lease a passenger vehicle, there may be a limit on the amounts you can deduct for:

Motor vehicle 

It is an automotive vehicle designed or adapted for use on highways and streets. A motor vehicle does not include a trolley bus or a vehicle designed or adapted to be operated only on rails.

Passenger vehicle

A motor vehicle that is owned by the taxpayer (other than a zero-emission vehicle) or that is leased, and is designed or adapted primarily to carry people on highways and streets. It seats a driver and no more than eight passengers. Most cars, station wagons, vans, and some pick up trucks are passenger vehicles.

Passenger vehicles and zero-emission passenger vehicles are subject to limits on the amount of CCA, interest, and leasing costs that may be deducted. They do not include:

  • an ambulance
  • a clearly marked police or fire emergency response vehicle
  • a motor vehicle you bought to use mainly (more than 50%) as a taxi, a bus used to transport passengers, or a hearse used in a funeral business
  • a motor vehicle you bought to sell, rent, or lease in a motor vehicle sales, rental, or leasing business
  • a motor vehicle (except a hearse) you bought to use in a funeral business to transport passengers
  • a van, pick-up truck, or similar vehicle that seats no more than the driver and two passengers and that, in the tax year you bought or leased it, was used more than 50% to transport goods and equipment to earn income
  • a van, pick-up truck, or similar vehicle that, in the tax year you bought or leased it, was used 90% or more to transport goods, equipment, or passengers to earn income
  • a pick-up truck that, in the tax year you bought or leased it, was used more than 50% to transport goods, equipment, or passengers to earn or produce income at a remote work location or at a special work site that is at least 30 kilometres from the nearest community with a population of at least 40,000 persons
  • a clearly marked emergency medical service vehicle used to carry paramedics and their emergency medical equipment

For more information on the type of vehicle you have, go to Vehicle definitions chart.

Zero-emission passenger vehicle (ZEPV)

An automobile that is owned by the taxpayer and is included in Class 54 (but would otherwise be included in Class 10 or 10.1). The rules that apply to the definition of passenger vehicles apply to zero-emission passenger vehicles (ZEPVs). A ZEPV does not include a leased passenger vehicle, but other vehicles that would otherwise qualify as a ZEPV if owned by the taxpayer are subject to the same leasing deduction restrictions as passenger vehicles.

Zero-emission vehicle

It is a motor vehicle that is owned by the taxpayer where all of the following conditions are met:

  • is a plug in hybrid with a battery capacity of at least 7kWh or is either fully:
    • electric
    • powered by hydrogen
  • is acquired, and becomes available for use, after March 18, 2019, and before 2028
  • has not been used or acquired for use for any purpose before it was acquired by the taxpayer
  • is a vehicle in respect of which an amount has not been deducted as CCA and a terminal loss has not been claimed by another person or partnership


Under proposed legislation, if the property was acquired after March 1, 2020, it may have been used, but a vehicle that was subject to a prior CCA or terminal loss claim cannot have been acquired by the taxpayer on a tax-deferred "rollover" basis nor previously owned or acquired by the taxpayer or a non-arm's length person or partnership.

  • is a vehicle for which:
    • an election has not been made to forgo the Class 54 or 55 treatment
    • assistance has not been provided by the Government of Canada under the new incentive announced on March 19, 2019
Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: