If you are self-employed and operate your business out of your house, you may claim capital cost allowance (CCA) on the portion of your residence you use for conducting your business. However, if you later sell the house, the portion of it that you claimed CCA on will not be eligible for the principal residence exemption and may be subject to tax. If the value of your house increased, you will also pay tax on the CCA that was deducted in previous years. Since houses generally rise in value, we do not advise that you make the annual claim for CCA on your house.
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