Depreciation Rates Class 1, 3, and 8

Class 1

• Depreciation rates: 4%, 6%, and 10% based on the purpose of the building.
• Applicable to various structures including buildings, bridges, and tunnels.
• 4% rate for buildings acquired after 1987 until 2007.
• 5% for buildings bought before 1988 which fall under Class 3.
• Electing Class 1 after 2007 for commercial buildings.
• 6% rate for buildings used 90% for commercial purposes (excluding manufacturing).
• 10% rate for buildings used 90% for manufacturing and processing goods.
• Rental buildings costing $50,000 or more must be in a separate Class 1.
• Land itself is not depreciable.

Class 3

• Depreciation rate of 5%.
• Contains buildings acquired before 1988 and various structures like breakwaters and docks.
• Rental buildings costing $50,000 or more must be in a separate Class.

Class 8

• Depreciation rate of 20% for machinery, equipment, and furniture.
• Covers various items such as electrical equipment and outdoor advertising signs.
• Tools costing $500 or more are included.
• Office equipment exceeding $1,000 can be elected for a separate class.

Class 10

• Depreciation rate of 30% for vehicles costing $30,000 or less.
• Includes trucks, trailers, buses, and mining equipment.
• Covers portable equipment used in construction.

Class 10.1

• Depreciation rate of 30% for passenger luxury vehicles costing over $30,000.
• CCA limit set at $30,000.
• Each luxury vehicle must be assigned to a separate Class 10.1.
• No terminal loss or recapture allowed.

Class 12

• 100% depreciation for computer software and certain small asset categories.
• Excludes system software, covers books, kitchen utensils, and dental instruments.
• Includes tools costing less than $500.

Class 13

• Straight line method for leasehold improvements and renovations.
• Maximum deduction determined by the lesser of 1/5 of capital cost or capital cost divided by lease term.

Class 14

• Straight line amortization for limited-life intangible assets.
• Covers copyrights, franchises, and licenses with limited valid periods.

Class 14.1

• Intangible assets with unlimited life are assessed.
• New rules as of 2017 include 100% additions and dispositions with 5% CCA.
• 1/2 year rule applies with no terminal losses for ongoing businesses.
• Goodwill and other unlimited life intangible assets do not require separate classes.

Class 16

• Depreciation rate of 40% for taxis and coin-operated video games.

Class 44

• 25% depreciation for patents with a useful life of four years or longer.

Class 50

• 55% depreciation for computer hardware and system software acquired after January 31, 2011.
• Includes smartphones and tablets; basic cellphones fall under Class 8.