Budget 2024 proposed two changes to the calculation of capital cost allowance (CCA). First, it proposed to increase the CCA rate for "new purpose-built residential rental" properties from 4% to 10%. Second, it proposed immediate expensing for "productivity-enhancing assets". In general, additions to Classes 44, 46, and 50 would be eligible for immediate expensing for property that was acquired and became available for use by the taxpayer after April 15, 2024, and before 2027.
These proposals were included in draft legislation released for comment on August 12, 2024.
The Canada Revenue Agency has confirmed to us that neither of these proposals are being administered at this time. Both proposals were subject to consultation and are not final.
We note that the capital cost allowance calculations are contained in the Income Tax Regulations. It seems the federal government could have enacted this change without passing a budget implementation bill.
Should this change be enacted, taxpayers that acquired eligible property will need to amend their tax returns.
Originally posted on LinkedIn on February 7, 2025
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Ryan Minor
Chartered Professional Accountants of Canada
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