How Much Capital Cost Allowance Can You Claim For Your Business?

Buildings

Buildings may fall into CCA Class 1, 3 or 6 depending on what the building is made of and when you acquired it.

Most buildings acquired after 1987 are in Class 1, with a CCA rate of 4%.

Buildings acquired before 1988 fall into Class 3, with a CCA rate of 5%, unless they fall into Class 6.

Class 6, with a CCA rate of 10%, is for buildings that are made of frame, log, stucco on a frame, galvanized iron, or corrugated metal. The category includes certain greenhouses and fences.

Vehicles

In addition to motor vehicle expenses, (such as insurance, repairs, fuel, etc), you may wish to claim CCA on the vehicle itself. Motor vehicles and some passenger vehicles are in Class 10, with a CCA rate of 30% unless your passenger vehicle was bought in the current tax year and costs more than $39,000, in which case it falls into the special CCA class 10.1. New are classes 54 & 55 for Zero-Emission Vehicles (ZEV) purchased after March 18^th, 2019.

If you use your vehicle for both business and personal use you can only claim the percentage of CCA that is directly related to business use. If you use the vehicle 40% of the time to earn income, then you can only claim 40% of the allowable CCA claim for that year.

Computers

Computer hardware and systems software are in Class 45, with a CCA rate of 45%, if you bought them after March 22, 2004, and before March 19, 2007.

If your computer hardware and systems software were bought after January 27, 2009, and before February 2011, they may qualify for Class 52, with a 100% CCA rate and no half-year rule. Certain conditions must be met — for instance, the asset must not have been used, or be intended for use, principally as electronic process control or monitor equipment, and it must be situated in Canada.

Otherwise, your computer hardware and systems software generally belong in Class 50, with a CCA rate of 55%.

However, if you acquired the Class 50 asset after April 15, 2024, it may qualify for a temporary 100% immediate expensing deduction — meaning you can write off the full cost in the first year, rather than following the standard 55% declining-balance rate. This measure applies to eligible property that becomes available for use before 2027 (with a phase-out for property available for use in 2027 through 2030), so it's worth confirming your asset's "available for use" date falls within the eligible window.

Machinery and Equipment

Eligible machinery and equipment, used for the manufacturing and processing in Canada of goods for sale or lease fall into Class 43, with a 30% CCA rate.

The Leftover Category

Furniture, appliances, tools costing $500 or more each, photocopiers, fax machines, some fixtures, some machinery, equipment including refrigeration equipment, outdoor advertising signs, buildings used to store fresh fruit, vegetables and silage all fall into Class 8, with a CCA rate of 20%.  So if a piece of property doesn’t seem to belong anywhere else, have a close look at the Class 8 requirements; that’s probably where it fits.

If you have purchased depreciable property to use in your business that doesn’t fit into any of these classes, please note that these are not the only CCA classes that exist. For a more complete listing of CCA classes, see this CRA link: Classes of Depreciable Property.