Type of vehicle you own

For tax purposes, there are 2 types of vehicles you should know about. They are motor vehicles and passenger vehicles.

Motor vehicle

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

Passenger vehicle

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 8 passengers. Most cars, station wagons, vans, and some pick-up trucks are passenger vehicles. They are subject to the limits for capital cost allowance (CCA), interest, and leasing costs.

A passenger vehicle does not include:

  • an ambulance
  • clearly marked police and fire emergency-response vehicles
  • clearly marked emergency medical services vehicles used to carry paramedics and their emergency medical equipment
  • a motor vehicle you bought to use mainly (more than 50%) as a taxi, a bus to transport passengers, or a hearse 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
  • certain vans, pick-up trucks, or similar vehicles (see the Vehicle definitions chart for details)

The Vehicle definitions chart should help you determine what type of vehicle you have. It does not cover every situation, but it should give you a better idea of how the CRA defines vehicles you bought or leased.

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 CCA, interest, and leasing costs.

For more information, see Classes of depreciable properties, Leasing costs, and Interest expense.

Completing your tax return

Enter on line 229, the allowable amount of your employment expenses from the total expenses line of Form T777, Statement of Employment Expenses.

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