Passenger vehicles (Class 10.1): likely eligible

Passenger vehicles are Class 10.1 and subject to a prescribed cost limit. The exclusion is narrower than the announcement suggested: it bites only where the vehicle is also second-hand or assembled outside Canada. The draft also changes how recapture works on disposal for vehicles that were immediate expensing property.

Draft legislation excludes a passenger vehicle only if it was also either used before you acquired it or assembled outside Canada. A new, Canadian-assembled passenger vehicle is not an excluded vehicle on the draft wording. Class 10.1 still caps the cost you may capitalise, and the draft amends the recapture rule for these vehicles. Confirm build origin and the cap with your accountant.

Examples of passenger cars and SUVs over the cost cap

company cars and SUVs above the Class 10.1 cost limit
luxury vehicles used by owners

Planning tip

Ask the dealer where the vehicle was assembled before you sign. On the draft wording that single fact can decide whether the purchase is deductible in full this year.

CCA Class 10.1 · regular rate 30% declining balance · half-year rule normally applies in year one.

Calculate the deduction on passenger cars and SUVs over the cost cap

Worked examples (Ontario)

Purchase	Old year-one deduction	New year-one deduction	Tax reduction, small business rate	Tax reduction, general rate
$25,000	$3,750	$25,000	$2,800	$6,625
$100,000	$15,000	$100,000	$11,200	$26,500
$250,000	$37,500	$250,000	$28,000	$66,250

Passenger vehicles (Class 10.1) by province

Free: the Year-End Purchase Checklist (PDF)

One page. What qualifies, what does not, the 'available for use' trap, and the seven questions to ask your accountant before you buy. No spam, unsubscribe any time.

Year-end planning kit

The Mega Deduction Year-End Playbook

Everything you need to walk into your accountant's office with a plan instead of a question. Built for owner-managed Canadian businesses that expect a profitable 2026.

Excel purchase planner with every province's rates and every CCA class pre-loaded. Model up to 12 purchases, see the year-one deduction, tax reduction and 10-year comparison for each.
The 46-page Playbook (PDF): eligibility by asset class, the exclusions, 'available for use' rules, financing vs. leasing, recapture risk, CCPC vs. sole proprietor, and worked examples for 12 industries.
Accountant brief template (Word): a one-page memo you fill in and send so your accountant can confirm the plan in one email instead of a meeting.
30-day action plan for purchases that must be delivered and installed before your fiscal year-end.

~~$97~~$47 CAD one-time, instant download

Get the Playbook

Secure checkout by Stripe. Files delivered immediately after payment. Not tax advice; every plan should be confirmed by your accountant.