Type of vehicle

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The kind of vehicle you own can affect the expenses you deduct.

For income tax purposes, there are two types of vehicles:

  • motor vehicles
  • passenger vehicles

A motor vehicle 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.

A passenger vehicle is a motor vehicle 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.

A passenger vehicle does not include:

  • an ambulance
  • a clearly marked police or fire emergency response vehicle
  • a motor vehicle you bought to use more than 50% as a taxi, a bus used in the business of transporting 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
  • a clearly marked emergency medical service vehicle used to carry paramedics and their emergency medical equipment

If you own or lease a passenger vehicle, they are subject to limits for capital cost allowance (CCA), interest, and leasing costs.

Vehicle definition

Refer to the following chart for help in determining what type of vehicle you have for income tax purposes. The chart applies only to vehicle you buy or lease after June 17, 1987, and use to earn business income. The chart does not cover every type of vehicle made, but it does cover the main types of vehicle.

Vehicle definition chart
Type of vehicle Seating (includes driver) Business use in year bought or leased Vehicle definition
Coupe, sedan, station wagon, sports car, or luxury car 1 to 9 1% to 100% passenger
Pick-up truck used to transport goods or equipment 1 to 3 more than 50% motor
Pick-up truck (other than above) 1 to 3 1% to 100% passenger
Pick-up truck with extended cab used to transport goods, equipment, or passengers 4 to 9 90% or more motor
Pick-up truck with extended cab (other than above) 4 to 9 1% to 100% passenger
Sport utility vehicle used to transport goods, equipment, or passengers 4 to 9 90% or more motor
Sport utility vehicle (other than above) 4 to 9 1% to 100% passenger
Van or minivan used to transport goods or equipment 1 to 3 more than 50% motor
Van or minivan (other than above) 1 to 3 1% to 100% passenger
Van or minivan used to transport goods, equipment, or passengers 4 to 9 90% or more motor
Van or minivan (other than above) 4 to 9 1% to 100% passenger
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