1.1. Important information

Use this guide to help calculate the capital cost allowance for property held by a taxpayer for a fiscal period. The information in this guide does not constitute a legal interpretation of the Taxation Act or any other legislation.

The guide must be used for a fiscal period ending on or after December 31, 2025. It does not take into account legislative amendments announced after October 31, 2025. You must ensure that the information in this guide complies with current tax legislation.

For more information, contact us.

1.2. Definitions

2.1. Additional capital cost allowance for new purpose-built rental housing

New purpose-built rental housing (building or part of a building located in Canada) may qualify for a 6% additional allowance if:

• the housing is included in class 1
• construction began after April 15, 2024, but before January 1, 2031
• the housing is considered available for use before January 1, 2036

As such, the total capital cost allowance rate for new purpose-built rental housing is 10% instead of 4% (regular rate for class 1 property).

To qualify for the additional allowance, such housing must also meet other conditions, including the following:

• It has at least four rental units (residential units that are not made available to travellers or vacationers) that are private apartments (contain a private kitchen, bathroom and living room), or at least ten rental units.
• At least 90% of the residential units are held for long-term rental.

To qualify, the building must also be included in a separate class.

For more information, see Buildings acquired after 1987 (class 1).

2.2. Accelerated capital cost allowance for property in classes 44, 46 and 50 (100% rate)

If a corporation acquires property in class 44, 46 or 50 after April 15, 2024, and the property is considered available for use before January 1, 2027, the corporation can increase the undepreciated capital cost (UCC) of that class and claim capital cost allowance (CCA) at a rate of up to 100% of the cost of net acquisitions relating to that property. The regular CCA rate for class 44, 46 and 50 property is 25%, 30% and 55%, respectively. The accelerated CCA is granted only for the fiscal period in which the property becomes available for use.

For more information, see Accelerated investment incentive.

2.3. Extension of the accelerated investment incentive

A taxpayer can claim an accelerated investment incentive if they have acquired:

• class 54, 55 or 56 property
• property in another class that constitutes accelerated investment incentive property (AIIP)

Under a previous measure, the accelerated investment incentive was to be gradually phased out between 2024 and 2028. However, the measure was fully reinstated for eligible property acquired on or after January 1, 2025, and considered available for use before 2030.

The full reinstatement is to be phased out over a four-year period between 2030 and 2033.

For more information, see Accelerated investment incentive.

A taxpayer who acquires property, such as a building, furniture or motor vehicle, during a fiscal period cannot deduct the cost as a current expenditure. The taxpayer can, however, deduct a portion of the cost each year to offset the property's diminishing value over time as it wears out or becomes obsolete. The process of spreading out the cost over several years is called capital cost allowance (CCA). Property on which a taxpayer can claim CCA is called “depreciable property.”

Depreciable property falls into different classes, each with its own rules for calculating the CCA (CCA rate, depreciation method, maximum depreciable amount, etc.).

The elements that make up the cost of a depreciable property constitute the property's capital cost. Capital cost includes the purchase price, the legal fees and other expenses related to the purchase, transportation costs, as well as GST/HST and QST minus any input tax credits (ITCs) and input tax refunds (ITRs) received by or credited to the buyer of the property. If part of the property is used for rental or business purposes, the cost of the property, prorated based on the portion of the property used for those purposes, constitutes its capital cost.

As a rule, the amount that can be claimed as CCA for a fiscal period for a given class of property equals:

• the capital cost of all the property in the class (if the calculation is being done for the first time), or
• the undepreciated capital cost (UCC) of all the property in the class

multiplied by

• the CCA rate for the class

However, an accelerated investment incentive measure was introduced to provide for an enhanced first-year allowance for certain property. For more information, see Accelerated investment incentive.

The maximum amount of CCA for a fiscal period is calculated using the declining balance method or the straight-line method. However, taxpayers do not have to claim the maximum allowable CCA. They can claim any amount up to the maximum.

The declining balance method is used for most CCA classes. Under this method, the allowable CCA for a fiscal period for a given class is determined by multiplying the CCA rate for the class by the UCC of the class at the end of the fiscal period.

The straight-line method is used to determine the CCA for specific classes, including 13 (leasehold improvements), 14 (patents and concessions), 15 (property used in timber limits) and 29 (manufacturing or processing machinery or equipment). The CCA for property in these classes is calculated, for a fiscal period, by multiplying the capital cost of the property included in the capital cost of all property in the same class at the time of acquisition by a fixed percentage.

Calculate the CCA using the work chart or table in the appropriate form, based on the type of taxpayer and activities:

Individuals must use one of the following forms:

• Employment Expenses of Salaried Employees and Employees Who Earn Commissions (TP-59-V)
• Employment Expenses of Forestry Workers (TP-78-V)
• Employment Expenses of Salaried Musicians (TP-78.4-V)
• Business or Professional Income and Expenses (TP-80-V) [for individuals carrying on a business (including individuals who practise a profession or are self-employed and earn commissions) as a sole proprietor or as a member of a partnership]
• Farming and Fishing Income and Expenses (TP-80.AP-V)
• Income and Expenses Respecting the Rental of Immovable Property (TP-128-V) [for individuals who earn rental income as the sole owner or co-owner of immovable property]

Corporations must use form CO-130.A, Déduction pour amortissement.

Partnerships must use the CCA table in Schedule B of the Partnership Information Return (TP-600-V).

Trusts must use any of the following forms:

• Income Earned by a Trust From the Rental of Immovable Property (TP-128.F-V) [for trusts that earn rental income as the sole owner or co-owner of the property or as a member of a partnership that owned the property]
• Schedule F of the Trust Income Tax Return (TP-646-V) [for a specified trust that is sole owner or co-owner of a specified immovable or is a member of a partnership that owns a specified immovable]
• Business or Professional Income and Expenses (TP-80-V) [for all other trusts]
• Farming and Fishing Income and Expenses (TP-80.AP-V)

Individual who carries on a business as a member of a partnership

An individual who is a member of a partnership must complete form TP-80-V or form TP-80.AP-V.

If the individual received an RL-15 slip, the partnership's net income shown on the slip already accounts for the CCA claimed by the partnership for the fiscal period.

If the individual did not receive an RL-15 slip, they must complete the CCA table on form TP-80-V or form TP-80.AP-V for property used by the partnership.

In both cases, if the individual acquired property to earn partnership income and the partnership did not reimburse them for the cost of the property, they must complete the CCA table on form TP-80-V or TP-80.AP-V.

The capital cost allowance (CCA) for a fiscal period is calculated using the appropriate table. Each row in the table serves to calculate the CCA of the class of property of the taxpayer, while each column represents a component of the calculation. The CCA is determined based on the undepreciated capital cost (UCC) of the property in a given class.

The instructions for completing a CCA table are given below. The reference table is from Part 5 of form TP-80-V, Business or Professional Income and Expenses, which is designed for an individual in business. The CCA tables for other taxpayer groups may differ slightly.

4.1. First information to enter in the table (columns 1 through 5)

4.1.1. Column 1 – Class number

Depreciable property must be grouped into classes. Use a separate line for each class. If same-class property was acquired for the purpose of earning income from different sources, create a separate class for each source.

A separate class must also be created for certain types of property.

For more information, see Classes of property.

4.1.2. Column 2 – Undepreciated capital cost (UCC) at the beginning of the fiscal period

If property was already included in a class at the beginning of the fiscal period, carry to column 2 the amount from column 10 of the CCA table on the form completed for the previous fiscal period.

If this is the taxpayer's first fiscal period, leave column 2 blank.

If, during the fiscal period, the taxpayer received a GST or QST rebate for property depreciation, subtract the rebate from the UCC at the beginning of the fiscal period.

4.1.3. Column 3 – Cost of acquisitions made during the fiscal period

In column 3, enter the total capital cost of all same-class property that was acquired during the fiscal period and considered available for use in that fiscal period. For more information, see Acquisition of depreciable property.

4.1.4. Column 3.1 – Cost of acquisitions in column 3 that are AIIP

In column 3.1, enter the portion of the amount in column 3, calculated for a given property class, that relates to the acquisition of accelerated investment incentive property (AIIP) and property included in classes 54 (zero-emission vehicles), 55 (trucks, tractors, taxis and zero-emission rental vehicles) and 56 (zero-emission automotive equipment) that is eligible for the accelerated investment incentive.

For property included in class 13 (leasehold improvements), 14 (patents and concessions) or 15 (property used in timber limits) [property depreciated using the straight-line method], enter 0 in columns 3.1, 5.1 and 5.2.

An enhanced CCA can be claimed for property in classes 13, 14 and 15 for the first fiscal period, but the enhancement is determined differently.

For more information, see Accelerated investment incentive.

4.1.5. Column 4 – Proceeds of dispositions made during the fiscal period

If the taxpayer disposed of depreciable property in any class, subtract the lesser of the following amounts from the UCC of that class:

• the capital cost of the property
• the proceeds of disposition of the property, minus any expenses incurred for the disposition

For more information, see Disposition of depreciable property.

You must also make some adjustments in calculating the UCC of the class by subtracting, in column 4, the amount of any assistance that:

• is related to a depreciable property of the class
• was repaid by the taxpayer, pursuant to an obligation to repay the assistance, after the taxpayer disposed of the property
• would have been included in computing the capital cost of the property under section 101 of the Taxation Act had the repayment been made before disposition of the property

Add the amount of any assistance that:

• was received in respect of a depreciable property of the class or was paid to enable the acquisition of such property
• the taxpayer received or was entitled to receive before claiming the capital cost allowance (CCA) and after disposing of the property
• would have been included, under section 101 of the Act, in the amount of assistance the taxpayer received or was entitled to receive in respect of that property had the amount been received before the property's disposition

Enter a minus sign (−) before a negative amount in column 4.

4.1.6. Column 5 – UCC after acquisitions and dispositions

For each class, add the amounts in columns 2 and 3 and then subtract the amount in column 4. If the amount in column 4 is negative, add rather than subtract it.

If the amount to enter in column 5 is negative, or if it is positive and there is no property left in the class at the end of the fiscal period, enter 0 in column 5 and follow the instructions under “Recapture of capital cost allowance” and “Terminal loss” in the section Disposition of depreciable property.

4.2. Other information to enter in the CCA table (columns 5.1 to 10)

4.2.1. Column 5.1 – Proceeds of dispositions that can reduce AIIP acquisitions

If, for a given class of property, the amount in column 3 does not include accelerated investment incentive property (AIIP), enter 0. Otherwise, for each class, subtract the amount in column 3 from the amount in column 4. Then subtract the result of that calculation from the amount in column 3.1 and enter the result in column 5.1.

Adjust the result as follows:

• subtract the total of all assistance that:
  • is related to a depreciable property of the class
  • was repaid by the taxpayer, pursuant to an obligation to repay the assistance, after the taxpayer disposed of the property
  • would have been included in computing the capital cost of the property under section 101 of the Taxation Act had the repayment been made before disposition of the property
• add the total of all assistance that:
  • is related to a depreciable property of the class or was paid to allow for the acquisition of such property
  • the taxpayer received or was entitled to receive before claiming the CCA and after disposing of the property
  • would have been included, under section 101 of the Act, in the amount of assistance the taxpayer received or was entitled to receive in respect of that property had the amount been received before the property's disposition

If the amount to enter in column 5.1 is negative, enter 0.

4.2.2. Column 5.2 – UCC adjustment based on AIIP acquired during the fiscal period

If, for a given class of property, the amount in column 3 does not include AIIP or property in class 54 (zero-emission motor vehicles), 55 (trucks, tractors, taxis and zero-emission rental vehicles) or 56 (zero-emission automotive equipment) that is eligible for the accelerated investment incentive, enter 0.

4.2.2.1 Class 44, 46 and 50 property

If all AIIP in class 44, 46 or 50 was acquired before April 16, 2024, or after April 15, 2024, perform the following calculation for each class: subtract the amount in column 5.1 from the amount in column 3.1, then multiply the result by the factor determined using the table below. If the result is negative, enter 0 in column 5.2.

If AIIP in the same class includes property acquired before April 16, 2024, and property acquired after April 15, 2024, enter the total of the following amounts in column 5.2:

• the portion of the amount in column 3.1 related to AIIP acquired before April 16, 2024, minus the amount in column 5.1 (the result cannot be negative), multiplied by the applicable factor per the table below

plus

• the portion of the amount in column 3.1 related to AIIP acquired after April 15, 2024, minus the unused portion of the amount in column 5.1 (the result cannot be negative), multiplied by the applicable factor per the table below

4.2.2.2 Property other than property in classes 44, 46 and 50

If all AIIP belonging to the same class (other than property in classes 44, 46 and 50) was acquired before January 1, 2025, or after December 31, 2024, perform the following calculation for each class: subtract the amount in column 5.1 from the amount in column 3.1, then multiply the result by the factor determined using the table below. If the result is negative, enter 0 in column 5.2.

If same-class AIIP includes property acquired before January 1, 2025, and property acquired after December 31, 2024, enter the total of the following amounts in column 5.2:

• the portion of the amount in column 3.1 related to AIIP acquired before January 1, 2025, minus the amount in column 5.1 (the result cannot be negative), multiplied by the applicable factor per the table below

plus

• the portion of the amount in column 3.1 related to AIIP acquired after December 31, 2024, minus the unused portion of the amount in column 5.1 (the result cannot be negative), multiplied by the applicable factor per the table below

4.2.3. Column 6 – Reduction

If the half-year rule does not apply to a class, enter 0 in column 6. Otherwise, for each class, subtract the amounts in columns 3.1 and 4 from the adjusted amount in column 3 and multiply the result by 50%. Enter the result in column 6. The amount in column 3 is adjusted as follows:

• take the total of all assistance that:
  • is related to a depreciable property of the class
  • was repaid by the taxpayer, pursuant to an obligation to repay the assistance, after the taxpayer disposed of the property
  • would have been included in computing the capital cost of the property under section 101 of the Taxation Act had the repayment been made before disposition of the property
• and subtract the total of all assistance that:
  • is related to a depreciable property of the class or was paid to allow for the acquisition of such property
  • the taxpayer received or was entitled to receive before claiming the CCA and after disposing of the property
  • would have been included, under section 101 of the Act, in the amount of assistance the taxpayer received or was entitled to receive in respect of that property had the amount been received before the property's disposition

If the amount to enter in column 6 is negative, enter 0.

4.2.4. Column 7 – Base amount used to calculate CCA

For each class, add the amounts in columns 5 and 5.2, then subtract the amount in column 6. Use the result to determine the CCA based on the applicable rate for the class.

If the taxpayer disposed of a class 10.1 passenger vehicle during the fiscal period and owned the vehicle at the end of the previous fiscal period, enter half of the amount from column 2 in column 7.

4.2.5. Column 8 – Rate (%)

Enter the CCA rate for each class. See Classes of property.

If the property of a class is depreciated on a straight-line basis, leave column 8 blank.

4.2.6. Column 9 – CCA

For each class, multiply the amount in column 7 by the rate in column 8. The result is the maximum allowable CCA. However, taxpayers can claim any amount up to the maximum.

Generally, if the taxpayer's fiscal period is less than 12 months, the maximum allowable CCA must be multiplied by the number of days in the fiscal period, and the result divided by 365.

Property in classes 13 (leasehold improvements), 14 (patents and concessions), 15 (property used in timber limits) and 29 (manufacturing or processing machinery or equipment) is depreciated on a straight-line basis. Enter the amount of CCA claimed in column 9.

Taxpayers can claim an enhanced CCA for their first fiscal period. For more information, see Accelerated investment incentive.

Calculate the CCA for each class and include the total amount of CCA in calculating the taxpayer's net income (or net loss).

The following table shows, by type of taxpayer, where the CCA is calculated and the forms the amount must be entered on.

4.2.7. Column 10 – UCC at the end of the fiscal period

For each class, subtract the amount in column 9 from the amount in column 5.

Depreciable property is grouped into classes and there are rules for calculating the capital cost allowance (CCA) for each class.

5.1. CCA rate by class of property

The table below shows the CCA rate for selected classes of property included in Schedule B to the Regulation respecting the Taxation Act.

Other classes of property are depreciated using the declining balance method. For more information, see Schedule B to the Regulation respecting the Taxation Act.

Property included in classes 13 (leasehold improvements), 14 (patents and concessions), 15 (property used in timber limits) and 29 (manufacturing or processing machinery or equipment) are depreciated on a straight-line basis.

Further details about certain classes of property are provided below.

5.2. Buildings acquired after 1987 (class 1)

Buildings acquired after 1987, including their component parts such as electrical wiring, lighting fixtures, plumbing, sprinkler systems, heating and air-conditioning equipment, elevators and escalators, are generally class 1 property with a CCA rate of 4%.

5.2.1. Additional CCA for non-residential builings

A non-residential building acquired after March 18, 2007, and placed in a separate class may be eligible for an additional allowance of 6% if at least 90% of the building (in surface area) is used to manufacture or process, in Canada, goods for sale or lease. Other non-residential buildings put in a separate class may be eligible for an additional allowance of 2%.

The additional allowances of 6% and 2% also apply to buildings that were under construction on March 19, 2007, provided that they had not been wholly acquired on that date, nor used or acquired for use before that date.

Therefore, the total CCA rate is 10% for buildings used for manufacturing or processing and 6% for other non-residential buildings. To be eligible for the additional allowance, the building must be put in a separate class; otherwise, the 4% rate will apply.

5.2.2. Rental property

The CCA claimed for class 1 rental property cannot result in or increase a rental loss, unless the property is held by a corporation or partnership whose primary activity consists in renting, developing or selling immovable property or a combination thereof. Rental property with a capital cost of $50,000 or more is included in a separate class.

The half-year rule applies to CCA and the additional allowance, as applicable.

5.2.2.1 Additional CCA for new purpose-built rental housing

New purpose-built rental housing (building or part of a building located in Canada) may qualify for a 6% additional allowance if:

• the housing is included in class 1
• construction began after April 15, 2024, but before January 1, 2031
• the housing is considered available for use before January 1, 2036

As such, the total capital cost allowance rate for new purpose-built rental housing is 10% instead of 4%.

To qualify for the additional allowance, such housing must also meet other conditions, including the following:

• It has at least four rental units (residential units that are not made available to travellers or vacationers) that are private apartments (contain a private kitchen, bathroom and living room), or at least ten rental units.
• At least 90% of the residential units are held for long-term rental.

Projects that convert existing non-residential building, such as an office building, into a residential complex may qualify for the additional allowance if the above conditions are met.

The additional allowance does not apply to the renovations of existing residential buildings. However, the cost of a new addition to an existing structure is eligible provided that the addition meets the above conditions.

To qualify for the additional allowance, a building must be placed in a separate class.

5.3. Buildings acquired before 1988 (class 3)

Most buildings acquired after 1978 but before 1988, except those put in another class, are class 3 property with a CCA rate of 5%. The parts that make up these buildings—wiring, lighting fixtures, plumbing, sprinkler systems, heating and air-conditioning equipment, elevators and escalators— are also included in class 3.

5.3.1. Additions or alterations to a class 3 building

You can include the cost of additions and alterations made to a class 3 building, up to the lesser of the following amounts:

• $500,000
• 25% of the building's capital cost on December 31, 1987 or, if the building was under construction on that date, 25% of the building's capital cost on the date construction was completed

The portion of the cost of additions and alterations that cannot be included in class 3 must be included in class 1.

5.3.2. Rental property

The capital cost allowance (CCA) claimed for class 3 rental property cannot result in or increase a rental loss, unless the property is held by a corporation or partnership whose primary activity consists in renting, developing or selling immovable property or a combination thereof. Rental property with a capital cost of $50,000 or more is included in a separate class.

5.4. Other buildings (class 6)

Buildings of frame, log, stucco on frame, galvanized iron or corrugated metal, and their component parts, are class 6 property with a CCA rate of 10% if the building:

• was acquired before 1979
• is used to earn income from farming or fishing
• has no footings or other base support below ground level
• was acquired by the taxpayer after 1978 and the installation of footings or any other base support begun before 1979, where:
  • the taxpayer was committed to acquiring it under a written agreement entered into before 1979
  • the taxpayer commenced construction before 1979
  • construction was commenced under a written agreement entered into by the taxpayer before 1979

Class 6 includes the cost of additions and alterations to a class 6 building that has no footings or other base support below ground level or that is used to earn income from farming or fishing.

The cost of additions and alterations to any other class 6 building, up to $100,000 for all fiscal periods combined, may also be included in this class. Any amount in excess of $100,000 may be included in class 1 or 3, as applicable.

5.4.1. Rental property

The capital cost allowance (CCA) claimed for class 6 rental property cannot result in or increase a rental loss, unless the property is held by a corporation or partnership whose primary activity consists in renting, developing or selling immovable property or a combination thereof. Rental property with a capital cost of more than $50,000 is included in a separate class.

5.5. Boats (class 7)

Canoes, rowboats and most other vessels, as well as the equipment attached to them, are class 7 property with a CCA rate of 15%.

5.6. Property not included in any other class (class 8)

Class 8 includes property not included in any other class, for example, furniture, fax machines, telephones and calculators costing $500 or more, fixtures, advertising poster panels, bulletin boards, electric advertising signs and certain types of machinery and equipment. Class 8 property has a CCA rate of 20%. Class 8 also includes an employed musician's musical instrument.

Taxpayers can elect to include certain class 8 property, such as photocopiers, fax machines and telephone equipment, in a separate class, provided the unit cost of the property is more than $400 ($1,000 for federal CCA). A separate class can be created for each eligible property or for several such properties.

The creation of a separate class does not change the CAA rate, but it provides the following advantages:

• The half-year rule does not apply to this property for the fiscal period in which the property was acquired (if the rule had otherwise applied for the fiscal period).
• If, at the end of a given fiscal period, the taxpayer no longer owns any property in the separate class, the undepreciated capital cost (UCC) of the class 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 UCC of class 8.

To make an election, the taxpayer (other than a partnership) must attach a letter to their income tax return for the period in which they acquired the property. If the taxpayer (other than a partnership) is making the election as a member of a partnership, they must enclose the letter with their income tax return for the fiscal period that includes the end of the partnership's fiscal period in which the partnership acquired the property.

5.7. Works of art (class 8.1)

Property that meets the following conditions is included in class 8.1 with a CCA rate of 33 1/3%:

• The property was acquired after April 21, 2005.
• The property consists of drawings, prints, etchings, sculptures, paintings or any other work of art of a similar nature.
• The artist was Canadian when they created the work of art.

5.8. Automotive equipment (class 10)

Automotive equipment (cars, trucks, motorcycles, snowmobiles, etc.), trailers, wagons, contractor's movable equipment and mining equipment are class 10 property with a CCA rate of 30%.

Class 10 does not include passenger vehicles included in class 10.1, zero-emission vehicles, taxis, vehicles rented on a daily basis or heavy trucks.

5.9. Passenger vehicles (class 10.1)

Passenger vehicles, other than zero-emission vehicles, must be included in class 10.1, rather than class 10, if their purchase cost before adding GST/HST and QST or any other provincial sales tax exceeds:

• $30,000, for vehicles acquired before January 1, 2022
• $34,000, for vehicles acquired in 2022
• $36,000, for vehicles acquired in 2023
• $37,000, for vehicles acquired in 2024
• $38,000, for vehicles acquired after December 31, 2024

The capital cost used to calculate the capital cost allowance (CCA) for a class 10.1 passenger vehicle must not exceed $30,000, $34,000, $36,000, $37,000 or $38,000, as applicable, plus the GST/HST and QST or any other provincial sales tax for which a refund was not refunded.

Each passenger vehicle must be put in a separate class and depreciated at a rate of 30%.

Zero-emission passenger vehicles acquired and available for use after March 18, 2019, but before 2034 must be included in class 54 unless the taxpayer that acquired the vehicle renounces its inclusion in class 54 property.

For more information, see Sale of a class 10.1 passenger vehicle.

5.10. Property with a relatively short useful life (class 12)

Tools, kitchen utensils and medical or dental instruments that cost less than $500 are included in class 12 and are fully deductible. Class 12 property also includes:

• books that are part of a lending library
• chinaware, cutlery or other tableware
• uniforms, costumes or apparel, including accessories used therewith, used to earn rental income
• metric scales used in a retail business and having a maximum load of 100 kg
• dies, jigs, patterns and moulds
• software other than systems software

However, class 12 does not include electronic communication devices and electronic data processing equipment.

Of the above property, the half-year rule applies only to dies, jigs, patterns, moulds and software other than systems software.

5.11. Leasehold improvements (class 13)

Class 13 includes the capital cost of improvements to leased property, that is, the capital expenditures that a tenant incurs in order to make improvements or alterations to leased property.

However, class 13 does not include the cost of alterations made to a leased building or structure that substantially changed the nature of the property, the cost of a building or structure built on leased land, or the cost of an addition to a leased building or structure. This type of cost constitutes property that must be included in class 1, 3 or 6 as a building or structure.

The capital cost of leasehold improvements incurred in a fiscal period for leased property is considered a unit of capital cost. The capital cost incurred in a subsequent fiscal period for the same property represents another unit of capital cost. Each unit requires a separate CCA calculation. Furthermore, costs incurred in the same fiscal period must also be calculated separately with respect to each property.

The maximum deduction for CCA in a fiscal period for each unit of capital cost is equal to the lesser of the following amounts:

• 1/5 of the unit of capital cost
• the unit of capital cost divided by the number of 12-month periods (not exceeding 40 periods) included between the start of the fiscal period in which the capital cost was incurred and the day on which the lease is to end (or, if the tenant has the right to renew the lease, the day on which the first renewal period ends)

For the fiscal period in which the property is acquired and considered available for use, the maximum amount of CCA must be reduced by half (under a rule similar to the half-year rule).

The maximum CCA amount for all leasehold interests, except AIIP, may not exceed the undepreciated capital cost (UCC) of the class.

5.12. Patents and concessions (class 14)

Class 14 includes patents, concessions or licences for a limited period, but not including:

• a concession or licence in respect of minerals, petroleum, natural gas, other related hydrocarbons or timber
• a leasehold interest in leased corporeal property
• a property in class 12, 23 or 44
• a licence to use computer software

As a rule, a patent automatically falls into class 44, but it is included in class 14 if the taxpayer makes such an election.

The maximum amount of CCA in a fiscal period for a class 14 property is equal to the lesser of the following amounts:

• the capital cost of the property spread out over the life of the property
• the undepreciated capital cost (UCC) of the property in the class at the end of the fiscal period

The half-year rule does not apply to class 14 property.

5.13. Incorporeal capital property (class 14.1)

Incorporeal capital property is included in class 14.1 with a CCA rate of 5%.

This includes:

• incorporeal capital property held on January 1, 2017
• incorporeal capital property acquired on or after January 1, 2017

In addition, 100% of the capital cost of such property must be added to the cost of class 14.1 property.

5.13.1. Goodwill

A separate class must be created for each business carried on by a taxpayer. Each separate class is deemed to include a goodwill property in addition to the other properties in the class, even if the taxpayer incurred no expense to acquire such property. Therefore, the capital cost of a business's single goodwill property is comprised of the total cost of all incorporeal capital property that is goodwill (including deemed goodwill).

If the taxpayer incurs an expense or makes a capital expenditure in carrying on their business, the amount of that expenditure is added to the cost of the business if that amount:

• does not represent the cost (or part of the cost) of a property
• cannot be deducted in computing the business's income
• does not represent an amount paid or payable to a creditor because or in settlement of a debt

A capital expenditure of this kind will also increase the undepreciated capital cost (UCC) of class 14.1 property.

A taxpayer may, in calculating their income for the fiscal period, deduct expenses incurred for the incorporation of a corporation, up to $3,000. The amount by which the expenses exceed $3,000, if applicable, must be added to the cost of the class 14.1 property.

If the taxpayer acquires (or is deemed to acquire) all or part of another business and subsequently makes it part of the first business, the cost of the goodwill acquired is added to the cost of the goodwill in respect of the taxpayer's business. That is, a taxpayer is considered to own a single goodwill property in respect of their business. The cost of the goodwill acquired will also increase the UCC of the business's class 14.1 property.

Goodwill is not a separate class and it cannot be disposed of unless the taxpayer sells all or part of their business.

5.13.2. Additional CCA with respect to the UCC of class 14.1 property on January 1, 2017

For a fiscal period ending before January 1, 2027, a taxpayer may be entitled to an additional allowance equal to 2% of the UCC of class 14.1 at the beginning of January 1, 2017, minus:

• total CCA and additional allowance respecting property in class 14.1 for previous fiscal periods
• three times all the amounts included in the UCC of class 14.1 further to the disposition of property the taxpayer acquired before January 1, 2017 (see Disposition of property acquired before January 1, 2017)

If the total of the additional 2% CCA and the amount that can be deducted as 5% CCA for the fiscal period is less than $500, you can increase the amount of the additional allowance such that the total amount of CCA the taxpayer can claim for class 14.1 is $500.

However, the additional allowance cannot exceed the result of the following calculation: the UCC of class 14.1 on January 1, 2017, minus the additional allowance of previous fiscal periods.

Moreover, if the total CCA (including the additional allowance) the taxpayer can claim for the fiscal period for class 14.1 exceeds the UCC of the class at the end of that period and before deduction of the CCA for the fiscal period, the taxpayer cannot claim the additional allowance.

Special rules apply to this class. See Disposition of class 14.1 property.

5.14. Certain property related to timber limits (class 15)

Class 15 includes property that would otherwise be included in another class and that:

• was acquired by a taxpayer for the purposes of cutting and removing merchantable timber from a timber limit
• will be of no further use to the taxpayer after all the merchantable timber that they are entitled to cut and remove from the limit has been cut and removed

The following property is excluded from class 15:

• property the taxpayer elected not to include in this class in the fiscal period or a previous fiscal period
• timber resource property

A taxpayer with class 15 property can claim CCA calculated according to a rate per cubic metre of timber cut in a fiscal period rather than on the basis of an established percentage of the undepreciated capital cost (UCC) of the class.

The maximum amount of CCA for a given fiscal period cannot exceed the UCC of the class.

The half-year rule does not apply to class 15 property.

5.15. Trucks, tractors, taxis and rental vehicles (class 16)

Taxis and vehicles for lease or rent, if the lease provided for a same lessee is not more than 30 days within a 12-month period, are class 16 property with a CCA rate of 40%.

Class 16 also includes trucks and tractors designed and used for hauling freight and whose gross vehicle weight rating is more than 11,788 kg. Such vehicles, if acquired after March 30, 2010, and if new at the time they were acquired, must be included in class 18.

A zero-emission vehicle acquired after March 18, 2019, must be included in class 55 where it would have been included in class 16 were it acquired on or before that date. However, taxpayers can elect to include the property in class 16 instead of class 55.

Coin-operated video games and pinball machines are also included in class 16.

5.16. Surface constructions (class 17)

Roads, sidewalks, runways, parking areas, storage areas and similar surface constructions are class 17 property with a CCA rate of 8%.

Class 17 does not include property that was acquired after December 31, 2021, and is included in class 57 or 58.

5.17. New trucks and tractors (class 18)

Class 18 includes trucks and tractors designed and used for hauling freight and whose gross vehicle weight rating is more than 11,788 kg, provided they were acquired after March 30, 2010, and were new at the time they were acquired. Class 18 also includes additions and modifications made to such a truck or tractor to enable it to run on liquefied natural gas (LNG). The class 18 CCA rate is 60%.

A zero-emission vehicle acquired after March 18, 2019, must be included in class 55 where it would have been included in class 18 were it acquired on or before that date. However, taxpayers can elect to include the property in class 18 instead of class 55.

5.18. Manufacturing or processing machinery or equipment (class 29)

Class 29 includes equipment and machinery acquired to be used in Canada primarily to manufacture or process goods for sale or lease.

Such property acquired after 2015 and before 2026 must instead be included in class 53.

The maximum amount of CCA for class 29 property is equal to:

• 25% of the capital cost of the property, for the fiscal period in which it was acquired
• 50% of the capital cost, for the following fiscal period
• 25% of the capital cost, for the third fiscal period

The half-year rule does not apply to class 29 property.

5.19. Other manufacturing or processing machinery or equipment (class 43)

Manufacturing or processing machinery or equipment that is not included in class 29 or class 53 is generally class 43 property with a CCA rate of 30%.

Some class 43 property that costs more than $400 ($1,000 for federal CCA) can be put in a separate class if an election is made to that effect. A separate class can be created for each eligible property or for several such properties.

The creation of a separate class does not change the CAA rate, but it provides the following advantages:

• The half-year rule does not apply to this property for the fiscal period in which the property was acquired (if the rule had otherwise applied for the fiscal period).
• If, at the end of a given fiscal period, the taxpayer no longer owns any property in the separate class, the undepreciated capital cost (UCC) of the class 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 UCC of class 43.

To make an election, the taxpayer (other than a partnership) must attach a letter to their income tax return for the period in which they acquired the property. If the taxpayer (other than a partnership) is making the election as a member of a partnership, they must enclose the letter with their income tax return for the fiscal period that includes the end of the partnership's fiscal period in which the partnership acquired the property.

5.20. Clean energy generation equipment and energy conservation equipment (classes 43.1 and 43.2)

Clean energy generation equipment and energy conservation equipment acquired after March 3, 2010, is included in class 43.1 or, under certain conditions, in class 43.2.

Class 43.1 includes electric vehicle charging stations designed to provide between 10 and 90 kilowatts of continuous power. Class 43.2 includes electric vehicle charging stations designed to provide 90 kilowatts or more of continuous power.

Classes 43.1 and 43.2 can also include the following property:

• pumped hydroelectric storage and emission equipment acquired after April 18, 2021
• active solar heating equipment and ground-source heat pump systems (equipment used to heat the water of a pool is not eligible if it was acquired before April 19, 2021)
• small-scale hydroelectric installations
• wind energy conversion systems
• geothermal electrical generation or heat production equipment
• equipment used to dispense hydrogen for use in hydrogen-powered vehicles that is acquired after April 18, 2021
• air-source heat pumps used mainly for space or water heating acquired after April 6, 2022

The class 43.1 CCA rate is 30% and the class 43.2 CCA rate is 50%.

5.21. Patents and concessions (class 44)

Patents and the right to use patented information for a limited or unlimited period, other than property included in class 12, is class 44 property with a CCA rate of 25%.

However, taxpayers can elect to include such property in class 14 if the period is limited or in class 14.1 if the period is unlimited.

5.22. Data network infrastructure equipment (class 46)

Data network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of advanced telecommunications applications, such as email, Web searching and Web hosting, instant messaging, and audio and video over Internet protocol, is included in class 46 with a CCA rate of 30%. Such property must not be included in class 8.

This equipment also includes data switches, multiplexers, routers, hubs, modems and domain name servers used to control, transfer, modulate or direct data.

Not included are telephones, cell phones, fax machines, equipment such as Web servers (which are now considered computers) as well as wires, cables and structures.

5.23. General-purpose electronic data processing equipment (computer hardware) and related systems software, including ancillary data processing equipment (class 50)

General-purpose electronic data processing equipment (computer hardware) and related systems software, including ancillary data processing equipment, are included in class 50 with a CCA rate of 55%.

5.24. Manufacturing or processing machinery or equipment (class 53)

Class 53 includes manufacturing or processing machinery or equipment acquired after 2015 but before 2026 that would otherwise be included in class 29, that is, machinery and equipment acquired to be used in Canada primarily to manufacture or process goods for sale or lease. The CCA rate for class 53 property is 50%.

However, if the property is electronic data processing equipment (such as computers) used primarily to manufacture or process items for sale or lease, it must be included in class 50.

5.25. Zero-emission motor vehicles (class 54)

Property that meets the following conditions is included in class 54 and is eligible for a CCA rate of 30%:

• It is a motor vehicle that is a zero-emission vehicle.
• It is acquired and becomes available for use before 2034.
• It would have been included in class 10 or class 10.1 had it been acquired before March 19, 2019.

The capital cost of a class 54 vehicle cannot exceed:

• $55,000, for vehicles acquired before January 1, 2022
• $59,000, for vehicles acquired after December 31, 2021, and before January 1, 2023
• $61,000, for vehicles acquired after December 31, 2022

Add to the capital cost the portion of applicable sales taxes (GST/HST and QST or any other provincial sales tax) that was not refunded to the taxpayer that acquired the vehicle.

The half-year rule does not apply to class 54 property.

A taxpayer may elect to not include a zero-emission vehicle in class 54, in which case it will be included in CCA class 10 or class 10.1, as applicable.

5.26. Trucks, tractors, taxis and zero-emission rental vehicles (class 55)

Property that meets the following conditions is included in class 55 and is eligible for a CCA rate of 40%:

• Property that is a truck, tractor, taxi or rental vehicle and is a zero-emission vehicle.
• The property is acquired and becomes available for use after March 18, 2019, but before 2034.
• The property would have been included in class 16 or class 18 had it been acquired before March 19, 2019.

The half-year rule does not apply to class 55 property.

A taxpayer can elect to not include a zero-emission vehicle in class 55 and include it in CCA class 16 or 18 instead.

5.27. Zero-emission automotive equipment (class 56)

Property that meets the following conditions is included in class 56 and is eligible for a CCA rate of 30%:

• Property that is automotive equipment other than a motor vehicle.
• The property is fully electric or powered by hydrogen.
• The property is acquired and becomes available for use after March 1, 2020, but before 2034.

The cost of additions and alterations that cause the automotive equipment (other than motor vehicles) to become fully electric or powered by hydrogen may, under certain conditions, be included in class 56.

Class 56 property must meet the same conditions as accelerated investment incentive property, even if it is not considered as accelerated investment incentive property. See Accelerated investment incentive.

A taxpayer may elect to not include zero-emission automotive equipment in class 56, in which case it will be included in the class for which it would otherwise be eligible.

5.28. Carbon capture, utilization and storage equipment (classes 57, 58, 59 and 60)

Carbon capture, utilization and storage (CCUS) are a suite of technologies that capture carbon dioxide (CO₂) emissions in the air or from the burning of fuel and industrial processes, either to store the CO₂ (usually deep underground) or use it in industrial production. Property used in a CCUS project falls under classes 57 to 60, for which CCA can be claimed at the following rates:

• 8%, if included in class 57
• 20%, if included in class 58
• 100%, if included in class 59
• 30%, if included in class 60

Classes 57 to 60 are in effect since January 1, 2022.

The capital cost of a property must be included in a given class at the time of acquisition. However, depreciation may not begin until the fiscal period in which the property becomes available for use.

6.1. Available-for-use rule

Property (other than a building) usually becomes available for use at the earliest of:

• the date the taxpayer first uses the property to earn income
• the beginning of the taxpayer's first fiscal period that starts at least 358 days after the fiscal period in which the taxpayer acquired the property
• the time just before the taxpayer disposes of the property
• the time the property is delivered or made available to the taxpayer and is capable of producing a saleable product or performing a saleable service
• for property acquired in the course of carrying on a farming or fishing business, the time the property is delivered to the taxpayer and is capable of performing the function for which it was acquired
• for property that is a motor vehicle, a trailer, a trolley bus, an aircraft or a vessel, the date all permits, certificates or licences needed by law are obtained
• for property that is a spare part intended to replace a part of another property of the taxpayer if required due to the breakdown of that other property, when that other property became available for use by the taxpayer

A building usually becomes available for use at the earliest of:

• the date the taxpayer starts using all or substantially all (90%) of the building for its intended purpose
• the beginning of the taxpayer's first fiscal period that starts at least 358 days after the fiscal period in which the taxpayer acquired the property
• the date construction of the building is completed
• the time just before the taxpayer disposes of the property

6.2. Capital cost of property

The capital cost of a property is generally the full cost of acquiring the property and includes:

• legal, accounting, engineering and other fees related to acquiring the property
• site preparation, delivery, installation, testing and other costs incurred to put the property into use
• in the case of property the taxpayer manufactures for their own use, material, labour and overhead costs reasonably attributable to the property, but not any profit which might have been earned had the property been sold

The following amounts must be deducted from a property's capital cost:

• the amount of any assistance the taxpayer received or was entitled to receive in the fiscal period
• the amount of any input tax credits (ITCs) claimed by the taxpayer in the fiscal period
• the amount of any input tax refunds (ITRs) claimed by the taxpayer in the fiscal period

The amount of any assistance, ITCs and ITRs already deducted that the taxpayer has repaid (or is deemed to have repaid) during the fiscal period must be added to the property's capital cost.

Note that other rules reduce or increase the capital cost of certain property. Rules may also apply to the change in use of property.

For more information on a change in use of property (for example, the conversion of all or part of a principal residence into rental or business income-producing property, or vice versa, see guide IN-120-V, Capital Gains and Losses).

6.3. Half-year rule

Under the half-year rule (also known as the 50% rule), taxpayers can claim capital cost allowance (CCA) only on one-half of their net acquisitions in the same CCA class. The rule applies to property that was acquired or considered available for use in the fiscal period.

If property in a given class was disposed of within the same fiscal period, the proceeds of disposition must be subtracted from the capital cost of same-class property acquired (net acquisitions).

The half-year rule does not apply to:

• property in classes 13 (leasehold improvements), 14 (patents and concessions), 15 (property used in timber limits) and 29 (manufacturing or processing machinery or equipment) or property in classes 23, 24, 27, 34, 52, 54, 55 and 56
• certain property in class 10 (automotive equipment) and class 12 (property with a relatively short useful life)
• property that the taxpayer elected to put in a separate class

Under certain conditions, the half-year rule does not apply to property acquired as a result of certain transfers made to a person not dealing at arm's length with the taxpayer or acquired in the course of certain reorganizations.

The half-year rule has been suspended until the end of 2033 for accelerated investment incentive property (AIIP). It will start applying again to such property that becomes available for use in:

• a fiscal period that begins in 2033 and ends in 2034, except if the property is available for use in 2033 or if it is excluded property under the half-year rule
• any fiscal period that begins after December 31, 2033

Adjusted cost base (ACB) is a fiscal concept used to determine the capital gain or loss resulting from the disposition of property. The ACB of depreciable property is always equal to the property's capital cost. If the proceeds of disposition of a depreciable property exceed the property's capital cost, the amount by which the proceeds exceed the capital cost constitutes a capital gain.

Following the disposition of depreciable property in a given class, the lesser of the following amounts must be deducted from the undepreciated capital cost (UCC) of property in that class:

• the capital cost of the property
• the proceeds of disposition of the property, minus any expenses incurred for the disposition

7.1. Recapture of capital cost allowance

Recapture of CCA occurs if depreciable property in a given class is disposed of and the undepreciated capital cost (UCC) of the class of property at the end of the fiscal period is negative. The total recapture amount is added to the taxpayer's net income (or net loss) for the fiscal period.

This rule does not apply to the sale of a class 10.1 automobile.

Calculate the CCA recapture for each class and carry the total recapture to the net income (or net loss) of the taxpayer on the appropriate form.

The following table shows, by type of taxpayer, where the CCA recapture is calculated and the forms the recapture amount must be entered on.

7.2. Terminal loss

If a depreciable property is the last of its class and its disposition is such that, at the end of the fiscal period, the undepreciated capital cost (UCC) of that class is positive (because the taxpayer has not claimed CCA on the remaining amount), the positive amount constitutes a terminal loss that can be deducted from the taxpayer's net income (or net loss) for the fiscal period.

This rule does not apply to the sale of a class 10.1 automobile.

Calculate the terminal loss for each class and carry the total terminal loss to the net income (or net loss) of the taxpayer on the appropriate form.

The following table shows, by type of taxpayer, where the terminal loss is calculated and the forms the amount must be entered on.

A terminal loss may result in or increase a non-capital loss that can be carried.

7.3. Sale of a class 10.1 passenger vehicle

If a taxpayer sells a class 10.1 passenger vehicle that they owned at the end of the previous fiscal period, they can deduct, for the current fiscal period, 50% of the CCA that they would have been able to deduct had they not sold the vehicle.

The taxpayer must not include a CCA recapture in their business income or deduct a terminal loss from their business income, because recapture and terminal loss rules do not apply to class 10.1 motor vehicles.

7.4. Sale of a class 54 zero-emission motor vehicle

Under a special rule that applies to the sale of a class 54 zero-emission motor vehicle with a cap on it's capital cost included in that class, the proceeds of the vehicle's disposition is multiplied by the percentage represented by the $55,000, $59,000 or $61,000 cap, as applicable, on the actual cost of the vehicle (which has to be adjusted).

Unlike for class 10.1, disposition of class 54 property is always subject to CCA recapture and terminal loss rules.

7.5. Disposition of class 14.1 property

Disposition of class 14.1 property (incorporeal capital property) is treated in the same way as the disposition of property in another CCA class. The property's capital cost or the proceeds of disposition of the property, whichever is less, must be subtracted from the undepreciated capital cost (UCC) of the property.

If, following disposition of the property, the UCC of the class at the end of the fiscal period is negative, the negative amount constitutes a CCA recapture that must be included in the taxpayer's business income.

If the proceeds of disposition are greater than the capital cost of the property, the capital gains rules apply.

A receipt that does not relate to a specific property will reduce the capital cost of the goodwill and, therefore, the UCC of class 14.1 by the lesser of the amount of the receipt and the cost of the goodwill. If the UCC of the class at the end of the fiscal period is negative, the negative amount constitutes a CCA recapture that must be included in the taxpayer's business income. If the amount of the receipt is greater than the cost of the goodwill, the excess is a capital gain.

The same rules apply if a taxpayer sells part of their business and derives income from the goodwill of the rest of the business, because the taxpayer continues to have goodwill property.

7.5.1. Disposition of property acquired before January 1, 2017

If a taxpayer disposes of class 14.1 property that was acquired before January 1, 2017, 25% of the lesser of the proceeds of disposition and the capital cost of the property must be added to the UCC of the class immediately before the disposition. The goal of this measure is to avoid excessive recapture of CCA resulting from the fact that the acquisition cost of the property was added to the eligible incorporeal capital amount at the rate of 75% instead of 100%. Like with the disposition of other property, the lesser of the proceeds of disposition and the capital cost of the property must be subtracted from the UCC of the class. Moreover, the CCA recapture and capital gains rules apply.

Other rules may reduce the UCC of the class if the taxpayer disposes of property acquired before January 1, 2017, in a non-arm's length transaction.

The accelerated investment incentive applies to property:

• in class 54 (zero-emission motor vehicles), 55 (trucks, tractors, taxis and zero-emission rental vehicles) or 56 (zero-emission automotive equipment)
• in another class that is accelerated investment incentive property (AIIP)

The following rules apply for the fiscal period in which the property is considered to become available for use (usually the fiscal period in which the property is acquired):

• The half-year rule does not apply.
• The undepreciated capital cost (UCC) of certain classes used to calculate the capital cost allowance (CCA) is increased so that an enhanced CCA may be granted.

With these rules, the total CCA that can be claimed for a property over its lifetime is deducted more quickly than before the implementation of the accelerated CCA rules.

8.1. General rule respecting the accelerated investment incentive

If a taxpayer acquires, after 2024, property in a given class that is considered both accelerated investment incentive property (AIIP) and available for use in the fiscal period and before 2030, the accelerated investment incentive allows the taxpayer to increase, by an amount equal to half the cost of net acquisitions, the undepreciated capital cost (UCC) of the class in calculating the capital cost allowance (CCA) for the fiscal period.

If the taxpayer acquires property in a given class that is considered both AIIP and available for use in the fiscal period, after 2029 but before 2034, the general rule respecting the accelerated investment incentive does not allow the taxpayer to increase the UCC of the class in calculating the CCA for the fiscal period. However, the taxpayer can still claim an enhanced CCA because the half-year rule does not apply to net acquisitions for the fiscal period.

8.2. Rule for class 13 property

If a taxpayer acquires class 13 property that is accelerated investment incentive property (AIIP) and its capital cost was incurred in the fiscal period, after 2024 but before 2030, the accelerated investment incentive allows the taxpayer to increase the capital cost allowance (CCA) by up to 150% of the CCA the taxpayer would otherwise be able to claim with respect to the property for the fiscal period. The rule whereby the CCA must be reduced by half (similar to the half-year rule) does not apply.

If a taxpayer acquires class 13 property that is AIIP and its capital cost was incurred in the fiscal period, after 2029 but before 2034, the accelerated investment incentive does not allow the taxpayer to claim an enhanced CCA for the fiscal period. However, the CCA does not have to be reduced by half.

In all cases, the CCA amount cannot exceed the undepreciated capital cost (UCC) of the class at the end of the fiscal period (before CCA is taken into account).

8.3. Rule for class 14 property

If a taxpayer acquires, after 2024, class 14 property that is considered both accelerated investment incentive property (AIIP) and available for use in the fiscal period and before 2030, the accelerated investment incentive allows the taxpayer to increase the capital cost allowance (CCA) that they would otherwise be able to claim with respect to the property by 50%.

If the taxpayer acquires AIIP that becomes available for use after 2029 but before 2034, the accelerated investment incentive allows the taxpayer to increase the CCA that they would otherwise be able to claim with respect to the property by 25% rather than 50%.

In all cases, the CCA amount cannot exceed the undepreciated capital cost (UCC) of the class at the end of the fiscal period (before CCA is taken into account).

8.4. Rule for class 14.1 property

The rule for class 14.1 property varies according to whether the property is qualified intellectual property and when it becomes available for use.

8.4.1. Property that is qualified intellectual property

If a taxpayer acquires class 14.1 property that is qualified intellectual property and accelerated investment incentive property (AIIP) and it becomes available for use in a fiscal period and in 2025, the accelerated investment incentive allows the taxpayer to increase the undepreciated capital cost (UCC) of the class for that fiscal period by an amount equal to nine times the net acquisition cost of the property and thus claim an enhanced capital cost allowance (CCA).

If the taxpayer acquires, after 2024, class 14.1 property that is considered AIIP and available for use in the fiscal period, after 2025 but before 2030, the accelerated investment incentive allows the taxpayer to increase, by an amount equal to half the net acquisition cost, the UCC of the class in calculating the CCA for that fiscal period.

If the taxpayer acquires class 14.1 property that is considered AIIP and available for use after 2029 but before 2034, the taxpayer cannot increase the UCC of the class. However, they can still claim an enhanced CCA because the half-year rule does not apply to net acquisitions for the fiscal period.

8.4.2. Property that is not qualified intellectual property

If a taxpayer acquires, after 2024, class 14.1 property that is not qualified intellectual property but that is considered accelerated investment incentive property (AIIP) and available for use in the fiscal period and before 2030, the accelerated investment incentive allows the taxpayer to increase, by an amount equal to half the net acquisition cost, the undepreciated capital cost (UCC) of the class in calculating the CCA for the fiscal period.

If the taxpayer acquires class 14.1 property that is considered AIIP and available for use after 2029 but before 2034, the taxpayer cannot increase the UCC of the class. However, they can still claim an enhanced CCA because the half-year rule does not apply to net acquisitions for the fiscal period.

8.5. Rule for class 15 property

If, in a fiscal period after 2024 but before 2030, a taxpayer acquires class 15 property that is accelerated investment incentive property (AIIP), the accelerated investment incentive allows the taxpayer to increase the CCA that they would otherwise be able to claim with respect to the property by 50%.

If, in a fiscal period after 2029, the taxpayer acquires class 15 property that is AIIP and considered available for use before 2034, the accelerated investment incentive allows the taxpayer to increase the CCA that they would otherwise be able to claim with respect to the property by 25% rather than 50%.

In all cases, the CCA amount cannot exceed the undepreciated capital cost (UCC) of the class at the end of the fiscal period (before CCA is taken into account).

8.6. Rule for class 43.1 property

If a taxpayer acquires, after 2024, class 43.1 property that is considered accelerated investment incentive property (AIIP) and available for use in the fiscal period and before 2030, the accelerated investment incentive allows the taxpayer to increase the undepreciated capital cost (UCC) of the class for that fiscal period by an amount equal to two and a third times the cost of net acquisitions and thus claim a capital cost allowance (CCA) up to the full cost of net acquisitions.

If the taxpayer acquires class 43.1 property that is considered AIIP and available for use in 2030 or 2031, the accelerated investment incentive allows the taxpayer to increase the UCC of the class for that fiscal period by an amount equal to one and a half times the cost of net acquisitions (instead of two and third times). If the acquired property becomes available for use in 2032 or 2033, the increase can reach five-sixths of the cost of net acquisitions.

8.7. Rule for class 43.2 property acquired before 2025

If a taxpayer acquires class 43.2 property that is considered accelerated investment incentive property (AIIP) and available for use in the fiscal period and before 2026, the accelerated investment incentive allows the taxpayer to increase the undepreciated capital cost (UCC) of the class for that fiscal period by an amount equal to half the cost of net acquisitions and thus claim an enhanced capital cost allowance (CCA). If the acquired property becomes available for use after 2025, the increase can reach one-tenth of the cost of net acquisitions.

8.8. Rule for class 44 property

If a taxpayer acquires, after April 15, 2024, class 44 property that is considered accelerated investment incentive property (AIIP) and available for use in the fiscal period and in 2025 or 2026, the accelerated investment incentive allows the taxpayer to increase the undepreciated capital cost (UCC) of the class for that fiscal period by an amount equal to three times the net acquisition cost of the property and thus claim a capital cost allowance (CCA) up to the full net acquisition cost.

If the taxpayer acquires class 44 property that is AIIP and it becomes available for use after 2026 and before 2034, the taxpayer cannot increase the UCC of the class. However, they can still claim an enhanced CCA because the half-year rule does not apply to net acquisitions for the fiscal period.

8.9. Rule for class 50 property

If a taxpayer acquires, after April 15, 2024, class 50 property that is considered accelerated investment incentive property (AIIP) and available for use in the fiscal period and in 2025 or 2026, the accelerated investment incentive allows the taxpayer to increase the undepreciated capital cost (UCC) of the class for that fiscal period by an amount equal to nine-elevenths of the cost of net acquisitions and thus claim a capital cost allowance (CCA) of up to 100% of the cost of net acquisitions.

If the taxpayer acquires class 50 property that is AIIP and it becomes available for use after 2026 and before 2034, the taxpayer cannot increase the UCC of the class. However, they can still claim an enhanced CCA because the half-year rule does not apply to such acquisitions.

8.10. Rule for class 53 property acquired before 2026 (or class 43 property acquired after 2025 that would have been included in class 53 if it had been acquired in 2025)

If a taxpayer acquires, after 2024 but before 2026, class 53 property that is considered accelerated investment incentive property (AIIP) and available for use in the fiscal period and before 2030, the accelerated investment incentive allows the taxpayer to increase the undepreciated capital cost (UCC) of the class for that fiscal period by an amount equal to the cost of net acquisitions and thus claim a capital cost allowance (CCA) up to the full cost of net acquisitions.

If the taxpayer acquires, after 2025, class 43 property that would have been included in class 53 if it had been acquired in 2025 and it is AIIP and becomes available for use in the fiscal period and before 2030, the accelerated investment incentive allows the taxpayer to increase the UCC of the class for that fiscal period by an amount equal to two and a third times the cost of net acquisitions.

If the taxpayer acquires such property and it is AIIP and becomes available for use in the fiscal period and in 2030 or 2031, the accelerated investment incentive allows the taxpayer to increase the UCC of the class for that fiscal period by an amount equal to one and a half times the cost of net acquisitions and thereby claim an enhanced CCA. If the acquired property becomes available for use in 2032 or 2033, the enhancement is equal to five-sixths of the cost of net acquisitions.

8.11. Rule for class 54 and 56 property

If a taxpayer acquires, after 2024, class 54 or 56 property that is considered available for use in the fiscal period and before 2029, they can increase the undepreciated capital cost (UCC) of the class for that fiscal period by an amount equal to two and a third times the cost of net acquisitions and thereby claim capital cost allowance (CCA) up to the full cost of net acquisitions.

If the taxpayer acquires class 54 or 56 property and it is considered available for use in the fiscal period and in 2030 or 2031, they can increase the UCC of the class for that fiscal period by an amount equal to one and a half times the cost of net acquisitions and thereby claim an enhanced CCA. If the acquired property becomes available for use in 2032 or 2033, the enhancement can reach five-sixths of the cost of net acquisitions.

8.12. Rule for class 55 property

If a taxpayer acquires, after 2024, class 55 property that is considered available for use in the fiscal period and before 2030, they can increase the undepreciated capital cost (UCC) of the class for that fiscal period by an amount equal to one and a half times the cost of net acquisitions and thereby claim a capital cost allowance (CCA) up to the full cost of net acquisitions.

If the taxpayer acquires class 55 property that is considered available for use in the fiscal year and in 2030 or 2031, they can increase the UCC of the class for that fiscal period by an amount equal to seven-eighths of the cost of net acquisitions and thus claim an enhanced capital cost allowance (CCA). If the acquired property becomes available for use in 2032 or 2033, the enhancement can reach three-eighths of the cost of net acquisitions.

8.13. Accelerated investment incentive summary tables

The following summary tables show the accelerated investment incentive as applied to property that is acquired after November 20, 2018, but before 2034 and becomes available for use before 2034.

8.13.1. Property not included in class 12, 13, 14, 14.1, 15, 43.1, 43.2, 44, 50, 53 or 59 (general rule)

8.13.2. Class 13 property

8.13.3. Class 14 property

8.13.4. Class 14.1 property

8.13.5. Class 15 property

8.13.6. Class 43.1 property

8.13.7. Class 43.2 property (property acquired before 2025)

8.13.8. Class 44 property

8.13.9. Class 46 property

8.13.10. Class 50 property

8.13.11. Class 53 property acquired before 2026 (or class 43 property acquired after 2025 that would have been included in class 53 if it had been acquired in 2025)

8.13.12. Class 54 and 56 property

8.13.13. Class 55 property