# 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 2008. 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, including components such as wiring, plumbing, heating, and cooling systems. Under proposed changes to the Income Tax Regulations, the rate for eligible non-residential buildings acquired after March 18, 2007 used for manufacturing and processing in Canada of goods for sale or lease will increase to 10%. For all other eligible non-residential buildings, the rate will increase to 6%. For information about proposed changes for nonresidential buildings see Capital Cost Allowance Guide.
3 | 5 | Most buildings including components that you bought after 1978 and before 1988. However, you may have to include part of the cost of additions made after 1987 in class 1. For more details, 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 do not have any footings below the ground. Class 6 also includes 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 did not include in any other class. 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" below.

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

10

30

Automobiles, except those you use as a taxi or in a daily rental business, including vans, trucks, tractors, wagons, and trailers. General-purpose electronic data-processing equipment (commonly called computer hardware) and systems software.

Also see "Electronic office equipment and Data network infrastructure equipment" below.

10.1 | 30 | A passenger vehicle. See Passenger vehicles - Class 10.1 (30%) for the capital cost limits.
12 | 100 | China, cutlery, kitchen utensils that cost under $200, linen, uniforms, dies, jigs, moulds, cutting or shaping parts of a machine, tools and medical or dental instruments that cost under $200, computer software (except systems software), and video cassettes bought after February 15, 1984, that you rent and do not expect to rent to any one person for more than 7 days in a 30-day period. Under proposed changes, the cost limit will increase to $500 from $200 for tools acquired after May 1, 2006. The cost limit for medical or dental instruments and kitchen utensils under Class 12 will increase to $500 from $200 for such utensils and instruments acquired after May 1, 2006. 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 higher than 11,788 kilograms.
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.
45 | 45 | Computer equipment and systems software acquired after March 22, 2004. Under proposed changes, the rate for computer equipment and systems software acquired after March 18, 2007, will increase to 55%.
46 | 30 | Data network infrastructure equipment and systems software for that equipment acquired after March 22, 2004 (usually included in class 8).
50 | 55 | Under proposed changes, general-purpose computer equipment and systems software acquired after March 18, 2007, that is not used principally as electronic process control, communications control, or monitor equipment, and the systems software related to such equipment, and data handling equipment that is not ancillary to general-purpose computer equipment, will be included in a newly proposed category 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