Classes of depreciable property

To calculate capital cost allowance (CCA) on your depreciable properties, use the form that applies to your business:

Capital cost allowance classes

On this page, we present the more common classes of depreciable properties and their rates. We also list most of the classes and rates at CCA classes.

Class 1 (4%)

A building may belong to Class 1, 3, or 6, depending on what the building is made of and the date you acquired it. You also include in these classes the parts that make up the building, such as:

Note

Land is not depreciable property. Therefore, when you acquire property, only include the cost related to the building in Area A and Area C. Enter on line 9923 in Area F the cost of all land additions in 2022.

Class 1 includes most buildings acquired after 1987, unless they specifically belong in another class. Class 1 also includes the cost of certain additions or alterations you made to a Class 1 building or certain buildings of another class after 1987.

The CCA rate for eligible non-residential buildings acquired by a taxpayer after March 18, 2007, and used in Canada to manufacture or process goods for sale or lease includes an additional allowance of 6% for a total rate of 10%. The CCA rate for other eligible non-residential buildings includes an additional allowance of 2% for a total rate of 6%.

To be eligible for one of the additional allowances, you must elect to put a building in a separate class. To make the election, attach a letter to your return for the tax year in which you acquired the building. If you do not file an election to put it in a separate class, the 4% rate will apply.

The additional allowance applies to buildings acquired after March 18, 2007, (including a new building, if any part of it is acquired after March 18, 2007, when the building was under construction on March 19, 2007) that have not been used or acquired for use before March 19, 2007.

To be eligible for the 6% additional allowance, at least 90% of a building (measured by square footage) must be used in Canada for the designated purpose at the end of the tax year. Manufacturing and processing buildings that do not meet the 90% use test will be eligible for the additional 2% allowance if at least 90% of the building is used in Canada for non-residential purposes at the end of the tax year.

Class 3 (5%)

Most buildings acquired before 1988 are included in Class 3 or Class 6.

If you acquired a building before 1990 that does not fall into Class 6, you can include it in Class 3 with a CCA rate of 5% if one of the following applies:

Include in Class 3 the cost of any additions or alterations made after 1987 to a Class 3 building that does not exceed the lesser of the following two amounts:

Any amount that exceeds the lesser amount above is included in Class 1.

Class 6 (10%)

Include a building in Class 6 with a CCA rate of 10% if it is made of frame, log, stucco on frame, galvanized iron, or corrugated metal. In addition, one of the following conditions has to apply:

If any of the above conditions apply, you also add the full cost of all additions and alterations to the building to Class 6.

If none of the above conditions apply, include the building in Class 6 if one of the following conditions applies:

Also include in Class 6 certain greenhouses and fences.

For additions or alterations to such a building:

Class 8 (20%)

Class 8 with a CCA rate of 20% includes certain property that is not included in another class. Examples are furniture, appliances, and tools costing $500 or more per tool, some fixtures, machinery, outdoor advertising signs, refrigeration equipment, and other equipment you use in the business.

Photocopiers and electronic communications equipment, such as fax machines and electronic telephone equipment, are also included in Class 8.

Note

If this equipment costs $1,000 or more, you can elect to have it included in a separate class. The CCA rate will not change but a separate CCA deduction can now be calculated for a five-year period. When all the property in the class is disposed of, the undepreciated capital cost (UCC) is fully deductible as a terminal loss. Any UCC balance remaining in the separate class at the end of the fifth year has to be transferred back to the general class in which it would otherwise belong. To make an election, attach a letter to your income tax return for the tax year in which you acquired the property.

Include data network infrastructure equipment and systems software for that equipment acquired before March 23, 2004, in Class 8. If acquired after March 22, 2004, include it in Class 46.

Include buildings you use to store fresh fruit or vegetables at a controlled temperature, by or for the persons by whom they were grown, in Class 8 instead of Class 1, Class 3, or Class 6. Also include in Class 8 any buildings you use to store silage.

Class 10 (30%)

Class 10 with a CCA rate of 30% includes general-purpose electronic data processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data processing equipment, if you acquired them either:

Class 10 also includes motor vehicles, as well as some passenger vehicles.

Include passenger vehicles in Class 10 unless they meet the Class 10.1 conditions.

Eligible zero-emission vehicles are now included in Class 54.

We define motor vehicle, passenger vehicle, and zero-emission vehicles in Type of vehicle.

Class 10.1 (30%)

Your passenger vehicle can belong in either Class 10 or Class 10.1. To determine the class your passenger vehicle belongs in, you have to use the cost of the vehicle before you add the GST/HST, or the PST.

Include your passenger vehicle in Class 10.1 if you bought it in 2022 and it cost more than $34,000. List each Class 10.1 vehicle separately.

After 2000, we consider the capital cost of a Class 10.1 vehicle to be $30,000 before 2022 and $34,000 in 2022 plus the related GST/HST, or PST. These amounts are the capital cost limits for a passenger vehicle.

Note

Use the GST rate of 5% and the appropriate PST rate for your province or territory. If your province is a participating province, use the appropriate HST rate.

Example

Vivienne owns a business. On June 21, 2022, she bought two passenger vehicles to use in her business. The PST rate for her province is 8%. Vivienne kept the following records for 2022:

Vivienne's business vehicles
Vehicle Cost GST PST Total
Number 1 $37,000 $1,850 $2,960 $41,810
Number 2 $28,000 $1,400 $2,240 $31,640

Vivienne puts vehicle 1 in Class 10.1, since she bought it in 2022 and it cost her more than $34,000. Before Vivienne enters an amount in column 3 of Area B, she has to calculate the GST and PST on $34,000. She does this as follows:

  • GST at 5% of $34,000 = $1,700

  • PST at 8% of $34,000 = $2,720

Therefore, Vivienne's capital cost is $38,420 ($34,000 + $1,700 + $2,720). She enters this amount in column 3 of Area B.

Vivienne puts vehicle 2 into Class 10, since she bought it in 2022 and it did not cost her more than $34,000.

Vivienne's capital cost is $31,640 ($28,000 + $1,400 + $2,240). She enters this amount in column 3 of Area B.

Under the immediate expensing rules, if a passenger vehicle acquired after April 18, 2021, is disposed of to a person or partnership with whom you deal at arm's length, and its cost exceeds the prescribed amount of $30,000 for vehicles acquired after 2000 and before January 1, 2022, or $34,000 for vehicles acquired after December 31, 2021, the proceeds of disposition will be adjusted based on a factor equal to the prescribed amount as a proportion of the actual cost of the vehicle.

Eligible zero-emission vehicles are now included in Class 54.

Class 12 (100%)

Class 12 includes property such as tools, medical or dental instruments, and kitchen utensils that cost less than $500 and were acquired on or after May 2, 2006.

Class 12 includes china, cutlery, linen and uniforms. It also includes video-cassettes, video laser discs and digital video disks that you rent and do not expect to rent to any one person for more than 7 days in a 30-day period.

Most small tools in Class 12 are not subject to the half-year rule. They are fully deductible in the year of purchase. If the tool costs $500 or more, include it in Class 8 with a CCA rate of 20%.

Class 12 tools that are subject to the half-year rule include dies, jigs, patterns, moulds and lasts, as well as the cutting or shaping part of a machine.

Include in Class 12 with a CCA rate of 100% computer software that is not systems software. Software in Class 12 is subject to the half-year rule.

Class 12 specifically excludes electronic communication devices and electronic data processing equipment.

Class 14

Class 14 includes patents, franchises, concessions, or licences for a limited period. Your CCA is whichever of the following amounts is less:

Class 14.1 (5%)

Starting January 1, 2017, include in Class 14.1 property that:

Examples for farming are milk and egg quotas.

Examples for business, professions and fishing are franchises, concessions, or licences for an unlimited period.

Properties that are included in Class 14.1 and acquired after 2016 will be included in this class at a 100% inclusion rate with a 5% CCA rate on a declining-balance basis and the existing CCA rules will normally apply.

For tax years that end prior to 2027, properties included in Class 14.1 that were acquired before January 1, 2017, will be depreciable at a CCA rate of 7% instead of 5%. Transitional rules will apply.

Note

Property in Class 14.1 is excluded from the definition of capital property for GST/HST purposes.

Class 16 (40%)

Class 16 includes taxis, vehicles you use in a daily car rental business, coin-operated video games or pinball machines acquired after February 15, 1984, and freight trucks acquired after December 6, 1991, that are rated above 11,788 kg.

Eligible zero-emission vehicles are now included in Class 55.

Class 43 (30%)

Include in Class 43 with a CCA rate of 30% eligible machinery and equipment used in Canada primarily to manufacture and process goods for sale or lease that are not included in Class 29 or 53.

You can list this property in a separate class if you file an election by submitting a letter when you file your tax return for the year in which you acquired the property. For information on separate class elections, see Class 8 (20%).

Class 43.1 (30%) and Class 43.2 (50%)

Include in Class 43.1 with a CCA rate of 30% electrical vehicle charging stations (EVCSs) set up to supply more than 10 kilowatts but less than 90 kilowatts of continuous power. This is for property acquired for use after March 21, 2016, that has not been used or acquired for use before March 22, 2016.

Class 43.1 also includes geothermal heat recovery equipment acquired for use after March 21, 2017, that is used primarily for extracting heat for sale. Geothermal equipment may be eligible for accelerated CCA.

Include in Class 43.2 with a CCA rate of 50% EVCSs set up to supply 90 kilowatts and more of continuous power. This is for property acquired for use after March 21, 2016, that has not been used or acquired for use before March 22, 2016.

Note

To support investment in clean technologies, the CCA Classes 43.1 and 43.2 are expanded by:

  • including new types of property (for example, pumped hydroelectric storage equipment)
  • broadening the eligibility for certain existing property types (for example, ground source heat pump systems)

This applies to property that is acquired and that becomes available for use after April 18, 2021, where it has not been used or acquired for use for any purpose before April 19, 2021.

Also, for property that becomes available for use after 2024, access to Classes 43.1 and 43.2 for certain fossil-fuelled and low efficiency waste-fuelled electrical generation equipment is restricted by:

  • removing some property that are currently included in these classes (for example, fossil-fuelled cogeneration systems)
  • narrowing the eligibility by imposing heat rate thresholds for others (for example, producer gas generating equipment)

Classes 43.1 and 43.2 now include air-source heat pumps primarily used for space and water heating. This applies to property you acquired after April 6, 2022, and that has not been used or acquired for use before April 7, 2022.

These properties may benefit from the enhanced first-year CCA that currently provides full expensing of the property in the year of acquisition, subject to a gradual phase-out for property that becomes available for use after 2023 and before 2028.

For more information on the enhanced first-year CCA, go to Accelerated investment incentive.

Class 44 (25%)

Include in Class 44 patents or a licence to use patents for a limited or unlimited period that was acquired after April 26, 1993. However, you can elect not to include such property in Class 44 by attaching a letter to the return for the year you acquired the property. In the letter, indicate the property you do not want to include in Class 44. The property you elect not to include in Class 44 will be included in Class 14 instead, if it has a limited life. If it has an unlimited life, it may qualify as an eligible capital property (before 2017) or as a Class 14.1 property (after 2016).

Class 45 (45%)

Include general-purpose electronic data processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data processing equipment, in Class 45 with a CCA rate of 45% if you acquired them after March 22, 2004, and before March 19, 2007.

Note

If you acquired the equipment or software before 2005 and made the separate Class 8 election, as discussed in the Class 8 (20%) note, the property does not qualify for the 45% rate.

Class 46 (30%)

Include in Class 46 with a CCA rate of 30% data network infrastructure equipment and systems software for that equipment if they were acquired after March 22, 2004. If they were acquired before March 23, 2004, include them in Class 8.

Class 50 (55%)

Include in Class 50 with a CCA rate of 55% property acquired after March 18, 2007, that is general-purpose electronic data processing equipment and systems software for that equipment, including ancillary data processing equipment.

Do not include property that is included in Class 29 or Class 52 or that is mainly or is used mainly as:

  1. electronic process control or monitor equipment
  2. electronic communications control equipment
  3. systems software for equipment referred to in 1. or 2.
  4. data handling equipment (other than data handling equipment that is ancillary to general-purpose electronic data processing equipment)

Class 52 (100%)

Include in Class 52 with a CCA rate of 100% (with no half-year rule) general-purpose electronic data processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data processing equipment, if they were acquired after January 27, 2009, and before February 2011.

Do not include property that is mainly or is used mainly as:

  1. electronic process control or monitor equipment
  2. electronic communications control equipment
  3. systems software for equipment referred to in 1. or 2. or
  4. data handling equipment (other than equipment that is ancillary to general-purpose electronic data processing equipment)

To qualify for this rate, the asset must also meet the following conditions:

Class 53 (50%)

Include in Class 53 with a CCA rate of 50% eligible machinery and equipment that is acquired after 2015 and before 2026 (that would generally otherwise be included in Class 29) to be used in Canada primarily in the manufacturing or processing of goods for sale or lease.

Class 54 (30%) and Class 55 (40%)

There are two CCA classes for zero-emission vehicles acquired after March 18, 2019. Class 54 was created for zero-emission vehicles that would otherwise be included in Class 10 or 10.1, with the same CCA rate of 30%. Class 55 was created for zero-emission vehicles otherwise included in Class 16, with the same CCA rate of 40%. The CCA still applies on a declining-balance basis.

An enhanced first-year CCA deduction with the following phase-out period is available:

For the enhanced first-year allowance, the following steps should be done before calculating the CCA:

Multiply the result by the prescribed CCA rate of 30% for Class 54 and 40% for Class 55.

The CCA will be applicable on any remaining balance in these classes using the specific rate for the class.

A taxpayer may elect to not include in Class 54 or 55 a vehicle that would otherwise be a zero-emission vehicle or a zero-emission passenger vehicle. When such an election is filed, the vehicle will no longer be considered to be a zero-emission vehicle or a zero-emission passenger vehicle. As a result, the vehicle will be included in its usual CCA Class 10, 10.1, or 16, as the case may be. Such vehicles will not qualify for the enhanced first-year CCA under the zero-emission vehicle rules. However those vehicles, that will be included in Class 10, 10.1, or 16, may be eligible for the immediate expensing incentive or enhanced CCA under the accelerated investment incentive property (AIIP) rules.

The election must be filed with the minister of national revenue in your Income Tax and Benefit Return for the tax year in which the vehicle is acquired. There is no provision for late-filing or amended elections.

Class 54 (30%)

Include in Class 54 zero-emission vehicles that are not included in Class 16 or 55 and would normally be included in Class 10 or 10.1.

There is a limit of $59,000 (plus federal and provincial sales taxes) on the capital cost for each zero-emission passenger vehicle in Class 54. Class 54 may include both zero-emission passenger vehicles that do and do not exceed the prescribed threshold. However, unlike Class 10.1, Class 54 does not establish a separate class for each vehicle whose cost exceeds the threshold.

If a zero-emission passenger vehicle is disposed of to a person or partnership with whom you deal at arm's length, and its cost exceeds the prescribed amount, the proceeds of disposition will be adjusted based on a factor equal to the prescribed amount as a proportion of the actual cost of the vehicle. For dispositions made after July 29, 2019, the actual cost of the vehicle will also be adjusted for the payment or repayment of government assistance.

Example

Example – First-year enhanced allowance
First-year enhanced allowance
Acquisition cost $60,000
First-year CCA $59,000 × 100% = $59,000
UCC $59,000 $59,000 = $0
Proceeds of disposition $30,000
Part of proceeds of disposition to be deducted from the UCC $30,000 × ($59,000 ÷ $60,000) = $29,500

Class 55 (40%)

Include in Class 55 zero-emission vehicles that would normally be included in Class 16.

Class 56 (30%)

Include in Class 56 zero-emission automotive equipment and vehicles (other than motor vehicles) that do not currently benefit from the accelerated rate provided by Classes 54 and 55. To be included in this class, such property needs to be acquired after March 1, 2020, and become available for use before 2028.

The enhanced first-year CCA deduction for this class applies only for the tax year in which the equipment or vehicle first becomes available for use. The deduction is subject to the following phase-out period:

To be eligible for the enhanced first-year allowance, a vehicle or equipment must be automotive (that is, self-propelled) and fully electric or powered by hydrogen. Vehicles or equipment that are powered partially by electricity or hydrogen (which includes hybrid vehicles and vehicles that require human or animal power for propulsion) are not eligible.

Class 56 captures automotive equipment that is not designed for use on highways or streets such as zero-emission aircraft, watercraft, trolley buses and railway locomotives. Additions or alterations may qualify if they convert automotive equipment (other than a motor vehicle) into a zero-emission property.

The CCA is deductible on any remaining balance in the class on a declining-balance basis, at the CCA rate of 30%.

You may elect to not include the vehicle or equipment in Class 56. As a result, the property is then included in the class for which it would otherwise be eligible.

Class 56 excludes property in respect of which CCA or a terminal loss has previously been claimed by another person or partnership where the equipment was acquired by the taxpayer on a tax-deferred "rollover" basis or it was previously owned or acquired by the taxpayer or a non-arm's length person or partnership.

Special rates for certain fishing boats

In most cases, a fishing boat belongs to Class 7. Therefore, you can claim CCA at a maximum rate of 15%. However, there are some exceptions to this rule.

A fishing boat, or the cost to convert it, is eligible for a special rate of CCA as follows:

You can claim this special rate on the following:

An enhanced first-year CCA deduction is available for fishing boats in Class 7 that are AIIP. The first-year CCA deduction is calculated by both:

For boats that are eligible for the special rate of 33 1/3% (16 2/3% in the year of acquisition) that are AIIP, the enhanced first-year CCA rate is:

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