Capital Cost Allowance (CCA) classes

The Canada Revenue Agency says...

Business and Professional Income Guide (T4002)

The following is a list of commonly used assets in a business.

Note: Most land is not depreciable property. Therefore, when you acquire property, only include the cost that relates to the building in Area C and Area A. Enter on line 9923 of Form T2125 the cost of all land additions in 2010. For more details, see Area F - Details of land additions and dispositions in the year and "Column 3 - Cost of additions in the year" in How do you make your claim?

Table of classes and rates

Table of classes and rates

Class Rate (%) Description
1 4 Most buildings you bought after 1987 and the cost of certain additions or alterations made after 1987. The rate for eligible non-residential buildings acquired after March 18, 2007, used for the manufacturing and processing in Canada of goods for sale or lease includes an additional allowance of 6% (total 10%). For all other eligible non-residential buildings in this class, the rate includes an additional allowance of 2% (total 6%). To be eligible for the additional allowances, elections have to be filed. For more information, read "Class 1 (4%)".
3 5 Most buildings acquired before 1988 (or 1990, subject to certain conditions). Also include the cost of additions or alterations made after 1987. For more information, see Interpretation Bulletin IT-79, Capital Cost Allowance - Buildings or Other Structures.
6 10 Frame, log, stucco on frame, galvanized iron, or corrugated metal buildings that meet certain conditions. Class 6 also includes certain fences and greenhouses.
7 15 Canoes, rowboats, and most other vessels and their motors, furniture, and fittings. For more details, see Interpretation Bulletin IT-267, Capital Cost Allowance - Vessels.
8 20 Property that you use in your business that is not included in another class. Also included is data network infrastructure equipment and systems software for that equipment acquired before March 23, 2004. See also Class 46. Some examples are fixtures, furniture, machinery, photocopiers, refrigeration equipment, telephones, and tools costing $200 or more. Under proposed changes, the cost limit will increase to $500 for tools acquired after May 1, 2006. Class 8 also includes outdoor advertising signs you bought after 1987.

Also see "Electronic office equipment and Data network infrastructure equipment - class 8 (20%), class 10 (30%), class 45 (45%), class 46 (30%), and class 50 (55%)" below.

9 25 Aircraft, including furniture or equipment attached to the aircraft, and spare parts.
10 30

Motor vehicles and some passenger vehicles. Also see Class 10.1.

General-purpose electronic data-processing equipment (commonly called computer hardware) and systems software for that equipment acquired before March 23, 2004, or after March 22, 2004, and before 2005 if you made an election.

10.1 30 A passenger vehicle not included in Class 10. For more information, see Passenger vehicles - Class 10.1 (30%).
12 100 Class 12 includes china, cutlery, linen, uniforms, dies, jigs, moulds, cutting or shaping parts of a machine, tools, computer software (except systems software). Also included are video-cassettes, video-laser discs, or digital video disks that you rent and do not expect to rent to any person for more than seven days in a 30 day period.
Under proposed changes, the cost limit for access to the Class 12 (100%) treatment will increase to $500 from $200 for:
  • tools acquired on or after May 2, 2006; and
  • medical or dental instruments and kitchen utensils acquired on or after May 2, 2006.
However, if the tools, medical or dental instruments and kitchen utensils cost $200 or more ($500 or more under proposed changes), include the cost in Class 8.

Tools eligible under this class specifically exclude electronic communication devices and electronic data-processing equipment.

13   Leasehold interest - You can claim CCA on a leasehold interest, but the maximum rate depends on the type of leasehold interest and the terms of the lease.
14   Patents, franchises, concessions, or licences for a limited period. Your CCA is whichever of the following amounts is less:
  • the total of the capital cost of each property spread out over the life of the property; or
  • the undepreciated capital cost to the taxpayer as of the end of the tax year of property of that class.
16 40 Taxis, vehicles you use in a daily car-rental business, coin-operated video games or pinball machines acquired after February 15, 1984, and freight trucks acquired after December 6, 1991, that are rated above 11,788 kg.
17 8 Roads, parking lots, sidewalks, airplane runways, storage areas, or similar surface construction.
22 50 Most power-operated, movable equipment you bought before 1988 that you use for excavating, moving, placing, or compacting earth, rock, concrete, or asphalt.
38 30 Most power-operated, movable equipment you bought after 1987 and use for excavating, moving, placing, or compacting earth, rock, concrete, or asphalt.
29   Eligible machinery and equipment used for the manufacturing and processing (M&P) in Canada of goods for sale or lease, acquired after March 18, 2007, and before 2012 that would otherwise be included in Class 43. To make an election, attach a letter to your income tax return for the tax year you bought the property indicating you are electing to put the property in Class 29. General-purpose electronic data-processing equipment (commonly called computer hardware) and systems software for that equipment, including associated data processing equipment, if acquired after March 18, 2007, and before January 28, 2009, and used in qualifying M&P activities, that otherwise would be in Class 50.
43 30 Eligible machinery and equipment, used for the manufacturing and processing (M&P) in Canada of goods for sale or lease that are not included in Class 29.
45 45 General-purpose electronic data-processing equipment (commonly called computer hardware) and systems software for that equipment acquired after March 22, 2004, and before March 19, 2007. Also see classes 10, 50, and 52.
46 30 Data network infrastructure equipment and systems software for that equipment acquired after March 22, 2004, (if acquired before March 23, 2004 include in Class 8).
50 55 General-purpose electronic data-processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data-processing equipment acquired after March 18, 2007, and not included in Class 29 or Class 52.
52 100 General-purpose electronic data-processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data-processing equipment acquired after January 27, 2009, and before February 2011. For more information, see Class 52 (100%) in Classes of depreciable property. Also see Class 50.
Note: You can choose to keep an outdoor advertising sign and any property you would usually include in class 38 in a separate class. To do this, attach a letter to your income return for the year you bought the property with a list of the properties you are including in a separate class.

Electronic office equipment and Data network infrastructure equipment

Electronic office equipment and Data network infrastructure equipment

Class 8 (20%), Class 10 (30%), Class 45 (45%), Class 46 (30%), and Class 50 (55%)

Certain types of computer equipment and office equipment can become obsolete before you can fully deduct their cost for income tax purposes. For such property with a cost of $1,000 or more acquired after April 26, 1993, and before 2005 you can elect to include it in a separate class. The CCA rate will not change but a separate CCA deduction can now be calculated for a five-year period. When all the property in the class is disposed of, the undepreciated capital cost (UCC) 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 general class in which it would otherwise belong. To make this election, attach a letter to your income tax return for the tax year in which you acquired the property.

The CCA rate for computer equipment and systems software acquired after March 22, 2004, is 45% and is included in class 45. The current rule allowing a separate class election as discussed in the previous paragraph, is not available for equipment that qualifies for the 45% rate. However, you may elect to have the rule described in the previous paragraph apply for equipment acquired before 2005.

Under proposed changes, the CCA rate for certain general-purpose computer equipment and systems software acquired after March 18, 2007, will increase to 55%, under a new proposed Class 50.

Data network infrastructure equipment and systems software for that equipment acquired after March 22, 2004, (usually included in class 8 at 20%) will be included in class 46 with a 30% CCA rate.

For more information, visit the CRA's Web site at http://www.cra.gc.ca.

Related information
CCA - Business and professional
CCA - Farming
CCA - Fishing
CCA - Rental properties