Accounting Troubleshooters (Canada) Forum
Capital improvements on a rental house - Printable Version

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Capital improvements on a rental house - madeitbc - 05-25-2018 08:27 AM

I am looking at accounting advice for Canada. I own a rental house of which I brought last year, and I might move into in 2 years’ time. I do not know how much Capital Improvements I should put into this property. As if I do a $10,000 capital improvement, how much tax loss will I get per year from this now? How is this capital improvement treated if I move into the house in two to three years? Or any thoughts you might have. Thanks beforehand

RE: Capital improvements on a rental house - Bumblebee - 05-31-2018 07:11 AM

Capital improvements is an asset, and it is added to the cost of the building.
A rental building can claim capital cost allowance likely Class 1 at a rate of 4% per year.

In contrast, any repairs to the building can be classified as 100% expense.

Capital improvements are added to the adjusted cost base of the building, which will be used to determine the capital gains/loss when you sell the property.