Rental CCA (Class 1), explained
How Class 1 CCA is calculated, its limits, and what happens when you sell.
Last verified: autumn 2026
What is CCA?
Capital cost allowance is a tax deduction for the cost of property used to earn income. For rentals, it is reported on T776, the Statement of Real Estate Rentals. The building cost is deducted over years; land is excluded. Most residential rental buildings bought after 1987 are Class 1, with a rate of 4% applied to the remaining balance each year.
The half-year rule
Under the half-year rule, the calculation generally uses half the cost of an addition in the year it is acquired. Our calculator applies this rule in the year you buy the building. It carries the full building cost forward, less any CCA claimed, as undepreciated capital cost (UCC). Later additions and accelerated deductions are outside the public calculator’s scope.
Claim limits
CCA is optional. The amount reported on line 9936 can range from zero to the allowed maximum. It cannot create or increase a rental loss. This limit uses your share of net rental income across all your rental properties, after expenses and before CCA. If that total is zero or a loss, the maximum claim is zero.
When you sell
Each CCA claim reduces the building’s remaining cost for future calculations. When you sell, some or all of the CCA previously claimed may be added back to your income. This is called recapture, and it can increase tax in the year of sale. The result depends on the sale and your past claims; the public calculator does not calculate it.
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Keep your building value and CCA figures with your rental records.
Nothing on this page is tax advice. The figures shown are worked examples, for record-keeping. Verify amounts against your records and consult a qualified tax professional.