Selling a building in 2022

If you sold a building of a prescribed class in 2022, special rules may make the selling price an amount other than the actual selling price. This happens when you meet both of the following conditions:

Calculate the building cost amount as follows:

Capital cost of the building ÷ Capital cost of all properties in the class that have not been previously disposed of × UCC of the class = Cost amount of the building


You may have to recalculate the capital cost of a property to determine its cost amount in any of the following situations:

  • You acquired a property directly or indirectly from a person or partnership with whom you did not deal at arm's length
  • You acquired the property for some other purpose and later began to use it, or increased its use, to earn rental or business income

For more information, call 1-800-959-8281.

If you sold a building under these conditions, this may restrict the terminal loss on the building and reduce the capital gain on the land. For more information, see Guide T4036, Rental Income, or Income Tax Folio S3-F4-C1, General Discussion of Capital Cost Allowance.

When you sell only part of a property, you have to divide the adjusted cost base (ACB) of the property between the part you sell and the part you keep.

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