Personal Finance

rental property CCA Class 3

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  • Apr 29th, 2014 1:38 pm
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[OP]
Deal Fanatic
Oct 1, 2004
5964 posts
553 upvotes
Toronto

rental property CCA Class 3

on CRA's website it says when claimng CCA class 3 building only claim the building price and not the land...

where am I suppose to find how much the building cost was? I can't find it in the purchase agreement or any documents my lawyers gave me when closing?

thanks
6 replies
Newbie
Jan 31, 2007
36 posts
2 upvotes
Toronto
Just ask a real-estate agent in your area what is the split normally between land and building. In my area, the split is 65-35% between land and building. Land cost in most cases is
much more than building.
[OP]
Deal Fanatic
Oct 1, 2004
5964 posts
553 upvotes
Toronto
so the building cost less than the land? can anyone confirm if 65-35% ratio is good for Ontario?

I know a lot of ppl are against claiming CCA, with my calculations my current net rental income is $6000, in the 40% bracket =$2400 tax owing, if I claim it now and bring my rental income to $0 and recapture it say 10 years down the road in the same tax bracket I would still owe the same $2400, so might as well in my case claim it now and invest it.
Deal Fanatic
May 9, 2007
7069 posts
1837 upvotes
Vancouver Island, BC
I suggest you look on the property tax assessment. In BC, the assessment identifies the land value and the "building" value. The ratio can vary wildly.

For our property, the building value is about one-third. A friend recently sold a property in Vancouver for $1,000,000. The house is older, but is in good repair. The renters were young professionals. (I think she is a physician.). So the house was not a dump. The building was assessed at $18,000.

I have a relative with a house in Vancouver that has an assessment of $2M. The building is under $40,000.
"It is difficult to get a man to understand something when his salary depends on his not understanding it." Upton Sinclair

“Our house is on fire.” Greta Thunberg
[OP]
Deal Fanatic
Oct 1, 2004
5964 posts
553 upvotes
Toronto
in Ontario its not on the property tax bill or the MPAC property assessment notice
Jr. Member
Jan 11, 2012
157 posts
9 upvotes
Oshawa
greg123 wrote:
Mar 16th, 2014 10:57 am
if I claim it now and bring my rental income to $0 and recapture it say 10 years down the road in the same tax bracket I would still owe the same $2400
you will never know if you will be in the same bracket until you sell. Chances are, with 10 years of $2,400/yr of recapture plus any capital gain, you will not be in the same bracket
Old accountants don't die, they just lose their balance.
Any advice provided here is worth exactly what you have paid for it.
Jr. Member
Jul 8, 2003
127 posts
6 upvotes
What value do you use if you purchased the house 10 years ago (2004) say for $150,000, started to use the house as rental in 2006, never claimed CCA from 2006 to 2014, but need to do it now.

2004 $150,000 - Purchase
2006 $257,000 - Start Rental
2014 $500,000 - Current
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