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href="https://web-static.archive.org/_static/css/iconochive.css?v=3PDvdIFv" />  <meta charset="utf-8"/>  <title>Classes of depreciable property</title> <link rel="shortcut icon" href="/web/20130628131309im_/http://www.cra-arc.gc.ca/wet-boew/theme-gcwu-fegc/images/favicon.ico"/> <meta name="description" content="Information for individuals and partners claiming capital cost allowance on the depreciable property used in their businesses."/> <meta name="dcterms.creator" content="Government of Canada, Canada Revenue Agency, Taxpayer Services and Debt Management Branch, Taxpayer Services Directorate"/> <meta name="dcterms.title" content="Classes of depreciable property"/> <meta name="dcterms.issued" title="W3CDTF" content="2004-01-16"/> <meta name="dcterms.modified" title="W3CDTF" content="2013-04-25"/> <meta name="dcterms.subject" title="scheme" content="capital cost allowance, CCA, CCA classes, depreciable property."/> <meta name="dcterms.language" title="ISO639-2" content="eng"/> <meta 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T2125, Statement of Business or Professional Activities</a>, to calculate <a href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/glssry/c-gn-eng.html#CCA">capital cost allowance (CCA)</a> on your depreciable properties. Below, we present the more common classes of depreciable properties and their rates. We also list most of the classes and rates at <a class="wrap-none" href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/cptl/clsss-eng.html">CCA classes</a>.</p> <ul> <li><a href="#class1">Class 1 (4%)</a></li> <li><a href="#class3">Class 3 (5%)</a></li> <li><a href="#class6">Class 6 (10%)</a></li> <li><a href="#Class8">Class 8 (20%)</a></li> <li><a href="#class10">Class 10 (30%)</a></li> <li><a href="#Class101">Class 10.1 (30%)</a></li> <li><a href="#class12">Class 12 (100%)</a></li> <li><a href="#Class29">Class 29</a></li> <li><a href="#Class_38">Class 38 (30%)</a></li> <li><a href="#Class_43">Class 43 (30%)</a></li> <li><a href="#class45">Class 45 (45%)</a></li> <li><a href="#class46">Class 46 (30%)</a></li> <li><a href="#class50">Class 50 (55%)</a></li> <li><a href="#class52">Class 52 (100%)</a></li> </ul> <h2 id="class1">Class 1 (4%)</h2> <p>A <strong>building</strong> may belong to <span class="wrap-none">class 1</span>, 3, <span class="wrap-none">or 6</span>, depending on what the building is made of and the date you acquired it. You also include in these classes the parts that make up the building, <span class="wrap-none">such as</span>:</p> <ul> <li>electrical wiring;</li> <li>lighting fixtures;</li> <li>plumbing;</li> <li>sprinkler systems;</li> <li>heating equipment;</li> <li>air-conditioning equipment (other than window units);</li> <li>elevators; and</li> <li>escalators.</li> </ul> <div class="module-note"> <p><strong>Note</strong><br/>Most land is not depreciable property. Therefore, when you acquire property, only include the cost that relates to the building in <span class="wrap-none">Area C</span> and <span class="wrap-none">Area A</span> of <span class="wrap-none">Form T2125</span>. Enter on <span class="wrap-none">line 9923</span> in <span class="wrap-none">Area F</span> the cost of all land additions in the year. For more information, see <a href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/t2125/p36-eng.html">Area F - Details of land additions and dispositions in the year</a> and <a href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/t2125/cl3-eng.html">Column 3 - Cost of additions in the year</a>.</p> </div> <p>Class 1 includes most buildings acquired <span class="wrap-none">after 1987</span>, unless they specifically belong in another class. <span class="wrap-none">Class 1</span> also includes the cost of certain additions or alterations you made to a <span class="wrap-none">Class 1</span> building or certain buildings of another class<span class="wrap-none"> after 1987</span>.</p> <p>The <span class="wrap-none">CCA rate</span> for eligible <span class="wrap-none"><strong>non-residential</strong></span><strong> buildings</strong> acquired by a taxpayer after <span class="wrap-none">March 18, 2007</span>, and used in Canada to manufacture or process goods for sale or lease includes an additional allowance <span class="wrap-none">of 6%</span> for a total rate <span class="wrap-none">of 10%</span>. The CCA rate for other eligible <span class="wrap-none"><strong>non-residential</strong></span><strong> buildings</strong> includes an additional allowance of 2<span class="wrap-none">%</span> for a total rate of <span class="wrap-none">6%</span>.</p> <p>To be eligible for one of the additional allowances, you must elect to put the building in a separate class. To make the election, attach a letter to your return for the tax year in which you acquired the building. If you do not file an election to put it in a separate class, the 4% rate will apply.</p> <p>The additional allowance applies to buildings acquired after <span class="wrap-none">March 18, 2007,</span> (including a new building, if any part of it is acquired after <span class="wrap-none">March 18, 2007</span>, when the building was under construction on <span class="wrap-none">March 19, 2007</span>) that have not been used or acquired for use before <span class="wrap-none">March 19, 2007</span>.</p> <p>To be eligible for the 6% additional allowance, at least 90% of a building (measured by square footage) must be used in Canada for the designated purpose at the end of the tax year. Manufacturing and processing buildings that do not meet the <span class="wrap-none">90% use</span> test will be eligible for the additional 2% allowance if at least 90% of the building is used in Canada for non-residential purposes at the end of the tax year.</p> <h2 id="class3">Class 3 (5%)</h2> <p>Most buildings acquired <span class="wrap-none">before 1988</span> are included in <span class="wrap-none">Class 3</span> or <span class="wrap-none">Class 6</span>.</p> <p>If you acquired a building before 1990 that does not fall into <span class="wrap-none">Class 6</span>, you can include it in <span class="wrap-none">Class 3</span> if <strong>one</strong> of the following applies:</p> <ul> <li>you acquired the building under the terms of a written agreement entered into before <span class="wrap-none">June 18, 1987; or </span></li> <li>the building was under construction by you or for you on <span class="wrap-none">June 18, 1987</span>.</li> </ul> <p>Include in Class 3 the cost of any additions or alterations made after 1987 to a Class 3 building that does not exceed the <strong>lesser</strong> of the following two amounts:</p> <ul> <li>$500,000; and</li> <li>25% of the building's capital cost (including the cost of additions or alterations to the building included in <span class="wrap-none">classes 3</span>,<span class="wrap-none"> 6</span>,or<span class="wrap-none"> 20 </span><span class="wrap-none">before 1988)</span>.</li> </ul> <p>Any amount that exceeds the lesser amount above is included in <span class="wrap-none">Class 1</span>.</p> <h2 id="class6">Class 6 (10%)</h2> <p>Include in <span class="wrap-none">Class 6</span> with a CCA rate <span class="wrap-none">of 10%</span> a building if it is made of frame, log, stucco on frame, galvanized iron, or corrugated metal (corrugated iron before 1988). In addition, <strong>one</strong> of the following conditions has to apply:</p> <ul> <li>you acquired the building <span class="wrap-none">before 1979</span>;</li> <li>the building has no footings or other base supports below ground level; or</li> <li>the building is used to gain <a href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/glssry/i-gen-eng.html#Incm">income</a> from farming or fishing.</li> </ul> <p>If any of the above conditions apply, you also add the full cost of all additions and alterations to the building to <span class="wrap-none">Class 6</span>.</p> <p>If none of the above conditions apply, include the building in <span class="wrap-none">Class 6</span> if <strong>one</strong> of the following conditions applies:</p> <ul> <li>you entered into a written agreement <span class="wrap-none">before 1979</span> to acquire the building, and the footings or other base supports of the building were started <span class="wrap-none">before 1979; or </span></li> <li>you started construction of the building <span class="wrap-none">before 1979</span> (or it was started under the terms of a written agreement you entered into <span class="wrap-none">before 1979</span>), and footings or other base supports of the building were started <span class="wrap-none">before 1979</span>.</li> </ul> <p>Also included in <span class="wrap-none">Class 6</span> are certain greenhouses and fences.</p> <p>For additions or alterations to such a building:</p> <ul> <li>Add to <span class="wrap-none">Class 6</span>: <ul> <li>the first $100,000 of additions or alterations made after 1978.</li> </ul> </li> <li>Add to <span class="wrap-none">Class 3</span>: <ul> <li>the part of the cost of all additions or alterations over $100,000 made <span class="wrap-none">after 1978</span> and <span class="wrap-none">before 1988</span>; and</li> <li>the part of the cost of additions or alterations over $100,000 made <span class="wrap-none">after 1987</span>, but only up to $500,000 or 25% of the cost of the building, whichever is less.</li> </ul> </li> <li>Add to <span class="wrap-none">Class 1</span> any additions or alterations over these limits.</li> </ul> <h2 id="Class8">Class 8 (20%)</h2> <p>Class 8 with a CCA rate <span class="wrap-none">of 20%</span> includes certain property that is not included in another class. Examples include furniture, appliances, tools costing $500 or more per tool, some fixtures, machinery, outdoor advertising signs, refrigeration equipment, and other equipment you use in business.</p> <p>Photocopiers and electronic communications equipment, such as fax machines and electronic telephone equipment are also included in <span class="wrap-none">Class 8</span>. <span class="wrap-none">Also include in Class 8</span> data network infrastructure equipment and systems software for that equipment acquired before <span class="wrap-none">March 23, 2004</span>. If acquired after <span class="wrap-none">March 22, 2004</span>, include it in <span class="wrap-none">Class 46</span>.</p> <div class="module-note"> <p><strong>Note</strong><br/>If this equipment cost $1,000 or more, you can elect to have it included 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 UCC is fully deductible as a terminal loss. Any <a href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/glssry/u-gen-eng.html#UCC">undepreciated capital cost (UCC)</a> 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 an election, attach a letter to your income tax return for the tax year in which you acquired the property.</p> </div> <h2 id="class10">Class 10 (30%)</h2> <p>Include in <span class="wrap-none">Class 10</span> with a CCA rate <span class="wrap-none">of 30%</span> general-purpose electronic data-processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data-processing equipment, if you acquired them before <span class="wrap-none">March 23, 2004</span>, or after <span class="wrap-none">March 22, 2004</span>, and <span class="wrap-none">before 2005</span>, and you made an election.</p> <p>Also include in <span class="wrap-none">Class 10</span> motor vehicles as well as some passenger vehicles as defined in <a href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/mtr/typ-eng.html">Type of vehicle</a>.</p> <p>Include passenger vehicles in <span class="wrap-none">Class 10</span> unless they meet the <span class="wrap-none">Class 10.1</span> condition.</p> <h2 id="Class101">Class 10.1 (30%)</h2> <p>Your passenger vehicle can belong in either <span class="wrap-none">Class 10</span> or <span class="wrap-none">Class 10.1.</span> To determine the class your passenger vehicle belongs, you have to use the cost of the vehicle before you add the GST <span class="wrap-none">and the PST</span>, <span class="wrap-none">or the HST</span>.</p> <p>Include your passenger vehicle in<span class="wrap-none"> Class 10.1</span> if you bought it in your <span class="wrap-none">2012 fiscal </span>period and it cost more than $30,000. List each <span class="wrap-none">Class 10.1</span> vehicle separately.</p> <p>We consider the capital cost of a <span class="wrap-none">Class 10.1</span> vehicle to be $30,000 plus the related GST and PST, <span class="wrap-none">or HST</span>. The $30,000 amount is the capital cost limit for a passenger vehicle.</p> <div class="module-note"> <p><strong>Note</strong><br/>Use the GST rate <span class="wrap-none">of 5%</span> and the appropriate PST rate for your province or territory. If your province is a participating province, use the HST.</p> </div> <div class="module-note module-simplify"> <p><strong>Example</strong><br/>Daniel owns a sporting goods retail business. <span class="wrap-none">On July 21, 2012</span>, he bought two passenger vehicles to use in his business. The PST rate for his province <span class="wrap-none">is 8%</span>. Daniel noted these details <span class="wrap-none">for 2012</span>:</p> <table border="0" cellpadding="3" cellspacing="0" class="wet-boew-zebra"><caption><strong>Daniel's business vehicles</strong></caption> <tbody> <tr><th id="header1"> Vehicle</th><th id="header2"> <div class="align-center">Cost</div> </th><th id="header3"> <div class="align-center">GST</div> </th><th id="header4"> <div class="align-center">PST</div> </th><th id="header5"> <div class="align-center">Total</div> </th></tr> <tr> <td class="align-center" headers="header1">Number 1</td> <td class="align-center" headers="header2">$33,000</td> <td class="align-center" headers="header3">$1650</td> <td class="align-center" headers="header4">$2,640</td> <td class="align-center" headers="header5">$37,290</td> </tr> <tr> <td class="align-center" headers="header1">Number 2</td> <td class="align-center" headers="header2">$28,000</td> <td class="align-center" headers="header3">$1400</td> <td class="align-center" headers="header4">$2,240</td> <td class="align-center" headers="header5">$31,640</td> </tr> </tbody> </table> <p>Daniel puts <span class="wrap-none">Vehicle 1 </span>in <span class="wrap-none">Class 10.1</span>, since he bought it in 2012 and it cost him more than $30,000. Before Daniel enters an amount in <span class="wrap-none">column 3</span> of <span class="wrap-none">Area B</span>, he has to calculate the GST and PST <span class="wrap-none">on $30,000</span>. He does this as follows:</p> <ul> <li> <p>GST at 5% of $30,000 = $1,500; and</p> </li> <li> <p>PST at 8% of $30,000 = $2,400.</p> </li> </ul> <p>Therefore, Daniel's capital cost for <span class="wrap-none">Vehicle 1</span> is $33,900 ($30,000 + $1,500 + $2,400). He enters this amount in <span class="wrap-none">column 3</span> of <span class="wrap-none">Area B</span> of <span class="wrap-none">Form T2125</span>.</p> <p>Daniel puts <span class="wrap-none">Vehicle 2</span> in <span class="wrap-none">Class 10</span>, since he bought it i<span class="wrap-none">n 2011</span> and it did not cost him more <span class="wrap-none">than $30,000</span>.</p> <p>Daniel's capital cost for <span class="wrap-none">Vehicle 2</span> is $31,640 ($28,000 + $1,400 + $2,240). He enters this amount in <span class="wrap-none">column 3</span> of <span class="wrap-none">Area B</span> of Form T2125.</p> </div> <h2 id="class12">Class 12 (100%)</h2> <p>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 <span class="wrap-none">video-cassettes</span>, video-laser discs, and digital video disks that you rent and do not expect to rent to any person for more than 7 days in a <span class="wrap-none">30 day</span> period.</p> <p>The cost limit for access to the <span class="wrap-none">Class 12</span> (100%) treatment is $500 for:</p> <ul> <li>tools acquired on or after May 2, 2006; and</li> <li>medical or dental instruments and kitchen utensils acquired on or after May 2, 2006.</li> </ul> <p>However, if the tools, medical or dental instruments and kitchen utensils cost $500 <span class="wrap-none">or more</span>, include the cost in <span class="wrap-none">Class 8</span>.</p> <h2 id="Class29">Class 29</h2> <p>You can elect to put in <span class="wrap-none">Class 29</span> eligible machinery and equipment used in Canada for the manufacture and process of goods for sale or lease, acquired after <span class="wrap-none">March 18, 2007</span>, and before 2014, that would otherwise be included in <span class="wrap-none">Class 43</span>. 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 <span class="wrap-none">Class 29</span>. Regular Class 43 treatment will apply to these eligible assets that are acquired after 2013.</p> <p>Calculate CCA using the straight line method as follows: claim up to 25% in the first year, 50% in the second year, and the remaining 25% in the third year. Any amount not claimed in a year can be claimed in a later year.</p> <h2 id="Class_38">Class 38 (30%)</h2> <p>Include in Class 38 most power-operated and movable equipment you bought after 1987 that was used for excavating, moving, placing or compacting earth, rock, concrete or asphalt. </p> <div class="module-note"> <p><strong>Note</strong><br/>You can choose to keep in a separate class any assets, including an outdoor advertising sign, you would usually include in class 38. To make this choice, attach a list of the assets you are including in a separate class to your income tax and benefit return for the year you bought these assets.</p> </div> <h2 id="Class_43">Class 43 (30%)</h2> <p>Include in <span class="wrap-none">Class 43</span> with a CCA rate of 30% eligible machinery and equipment, used in Canada for the manufacture and process of goods for sale or lease, that are not included in <span class="wrap-none">Class 29</span>.</p> <p>You can put this property in a separate class if you file an election by attaching a letter to your income tax return for the year in which you acquired the property. For information on separate class elections, see note in <a href="#Class8">Class 8 (20%)</a>.</p> <h2 id="class45">Class 45 (45%)</h2> <p>Include general-purpose electronic data-processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data processing equipment, in <span class="wrap-none">Class 45</span> with a CCA rate <span class="wrap-none">of 45%</span> if you acquired them after <span class="wrap-none">March 22, 2004</span>, and before March 19, 2007.</p> <div class="module-note"> <p><strong>Note<br/></strong>If you acquired the equipment or software before 2005 abd made the seperate Class 8 election, as discussed in the Class 8 note, the property does not qualify for the 45% rate. </p> </div> <h2 id="class46">Class 46 (30%)</h2> <p>Include in <span class="wrap-none">Class 46</span> with a <span class="wrap-none">CCA rate</span> of <span class="wrap-none">30% data</span> network infrastructure equipment and systems software for that equipment if they were acquired after <span class="wrap-none">March 22, 2004</span>. If they were acquired before <span class="wrap-none">March 23, 2004</span>, include them in <span class="wrap-none">Class 8</span>.</p> <h2 id="class50">Class 50 (55%)</h2> <p>Include in <span class="wrap-none">Class 50</span> with a <span class="wrap-none">CCA rate </span><span class="wrap-none">of 55%</span> property acquired after <span class="wrap-none">March 18, 2007</span>, that is general-purpose electronic data processing equipment and systems software for that equipment, including ancillary data processing equipment, but not including property that is included in <span class="wrap-none">Class 29</span> or <span class="wrap-none">Class 52</span> or that is mainly or is used mainly as:</p> <ol> <li>electronic process control or monitor equipment;</li> <li>electronic communications control equipment;</li> <li>systems software for equipment referred to in 1. or 2.; or</li> <li>data handling equipment (other than data handling equipment that is ancillary to general-purpose electronic data processing equipment).</li> </ol> <h2 id="class52">Class 52 (100%)</h2> <p>Include in <span class="wrap-none">Class 52</span> with a <span class="wrap-none">CCA rate </span><span class="wrap-none">of 100% </span>(with no half year rule) general-purpose electronic data processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data processing equipment if they were acquired after <span class="wrap-none">January 27, 2009</span>, and before <span class="wrap-none">February 2011, </span>but not including property that is mainly or is used mainly as:</p> <ol> <li>electronic process control or monitor equipment;</li> <li>electronic communications control equipment;</li> <li>systems software for equipment referred to in 1. or 2.; or</li> <li>data handling equipment (other than equipment that is ancillary to general-purpose electronic data processing equipment).</li> </ol> <p>To qualify for this rate the asset must also:</p> <ul> <li>be situated in Canada;</li> <li>not have been used, or acquired for use, for any purpose before it is acquired by the taxpayer;</li> <li>be acquired by the taxpayer: <ul> <li>for use in a business carried on by the taxpayer in Canada or to earn income from property situated in Canada; or</li> <li>for lease by the taxpayer to a lessee for the lessee to use in a business the lessee carried in Canada or to earn income from property situated in Canada.</li> </ul> </li> </ul> <h2>Forms and publications</h2><ul><li><a href="/web/20130628131309/http://www.cra-arc.gc.ca/E/pub/gp/rc4022/README.html">Guide RC4022, General Information for GST/HST Registrants</a></li><li><a href="/web/20130628131309/http://www.cra-arc.gc.ca/E/pub/tg/t4002/README.html">Guide T4002, Business and Professional Income</a></li><li><a href="/web/20130628131309/http://www.cra-arc.gc.ca/E/pbg/tf/t2125/README.html">Form T2125, Statement of Business or Professional Activities</a></li><li><a href="/web/20130628131309/http://www.cra-arc.gc.ca/E/pub/tp/it79r3/README.html">Interpretation Bulletin IT-79, Capital Cost Allowance - Buildings or Other Structures</a></li></ul> <h2>Related topics</h2><ul><li><a href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/crrnt-eng.html">Current or capital expenses</a></li><li><a href="/web/20130628131309/http://www.cra-arc.gc.ca/tx/bsnss/tpcs/rntl/cca-dpa/clsss-eng.html">Rental - classes of depreciable properties</a></li></ul> <h2>Need assistance?</h2><p><img alt="promotional image" class="float-left" src="/web/20130628131309im_/http://www.cra-arc.gc.ca/tx/images/smrtlnk.jpg" width="60"/>If you are unable to find the information you were looking for about this specific topic, please select the Contact us button.</p> <form action="https://web.archive.org/web/20130628131309/https://apps.cra-arc.gc.ca/ebci/iesl/clicktotalk/ntr.action" id="CTT" method="post"> <div><input name="RefNumber" type="hidden" 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